Real Property and Forms of Ownership Flashcards
Personal Property
Property that is moveable, may be owned by a person, and is not real property; also called “chattel” or “personalty”
Trade Fixture
A piece of equipment or other item that is on or attached to the real estate and is used in a trade or business
Emblements
Growing crops and crops produced
through cultivation that belong to the tenant during cultivation and after harvest
Severance
Altering the characteristics of an item from real property to personal property by removing it from land
M.A.R.I.A.
M-method of annexation
A-adaptability of item to land’s use
R-relationship of the parties
I-intention of placing item on land
A-agreement of parties
Economic Characteristic of Real Property
Scarcity; Improvements; Permanence of Investments; Location or Area Preference
Physical Characteristic of Real Property
Immobility; Indestructibility; Uniqueness
Legal Description
A method of identifying a property in written words that allows for an unambiguous interpretation of a property’s boundaries and location
Survey
A blueprint or map showing measurements, boundaries, and area of a property; sometimes required by lenders to ensure that no encroachments exist
Metes and Bounds
A survey system using points of reference and directional indicators to identify and locate a property for legal purposes
Lot and Block “Plat Reference System”
A legal description that refers to a lot and block number within a subdivision as indicated on a recorded subdivision plat
Rectangular Survey System/Rectangular Government Survey System (RGSS)
A governmental survey system that describes land in reference to principal meridians and baselines
Monument
A permanent landmark sometimes used in metes and bounds legal descriptions to describe very large pieces of property
D.E.E.P. C.
D-disposition (gives the owner the right to sell or convey the property)
E-exclusion (provides the owners with the right to decide who may or may not access the property-owners can exclude others from their property)
E-enjoyment (gives the owner the ability to use the property in any legal manner)
P-possession (property is owned by the title holder)
C-control (allows the owner to control the use of the property, including how others may use the property)
Surface Rights
Include both land and water rights
Subsurface Rights
Rights pertain to the right to use underground resources, such as natural gas and minerals, which is why subsurface rights are often called mineral rights
Air Rights
Rights to use the airspace above the land may be sold or leased independently of the land itself
Right of Profit
Example) the right to harvest timber and sell it.
Land
Includes the surface of the land, as well as the earth below the surface, any attached natural items, and the airspace above the land
Real Estate
Includes the land itself, as well as any attached items—such as buildings, pools, and monuments
Real Property
Includes real estate, as well as the rights that are included in property ownership.
Bundle of Rights
The tangible and intangible rights of ownership that come with owning real property; includes the right to sell individual “sticks” in the bundle separately from the land itself
Categories of Water Rights (2)
Riparian rights; Littoral rights
Riparian Rights
Granted to landowners whose land abuts a river or stream. (To remember this, keep in mind that riparian and river both start with R.)
Littoral Rights
Granted to landowners whose land borders closed bodies of water, such as lakes and oceans. (An easy way to remember this is that both littoral and lake begin with L.)
Natural Processes Associated with Water Rights
Accretion; Alluvion; Accession; Erosion; Avulsion; Reliction
Accretion
The process in which water carries rocks, sand, and soil and causes land build-up
Alluvion
New deposits of land that are the result of accretion (common at the mouth of large rivers)
Accession
The increase of land or property due to natural or man-made causes
Erosion
Gradual loss of land due to natural force
Avulsion
Rapid loss of land
Reliction
Gradual receding of water, which uncovers new land
Doctrine of Prior Appropriation
A legal doctrine that grants water rights to the first individual or entity to take water from a source for beneficial use, such as agriculture or municipal water supplies
Estate
Interest in land; alternatively, assets owned by a deceased person
Possession
The right to live or work on a property
Interest (Property)
The right or claim a person has to property
Fee Simple Absolute
An inheritable estate with absolute ownership; provides the most complete form of ownership and bundle of rights in real property
Title
Evidence of ownership of a property
Tenancy
Possession of property
Two Types of Estates
Freehold - Ownership for an undetermined length of time, ex) homeownership; Leasehold - An estate for a limited time, ex) renting/leasing
Fee Simple Estate (Freehold)
Conveys all of the rights of ownership, including use, disposition, and inheritability; Can be passed down to heirs
Life Estate (Freehold)
Doesn’t convey the entire bundle of rights because the owners hold the estate for only their lifetime; May be based on another named individual’s lifetime
Conventional Life Estate (Life Estate)
Grants possession and limited ownership of an asset to someone for as long as they live
Estate in Reversion (Life Estate)
When the holder of a particular estate conveys that estate to someone else for a specified period of time, but with the understanding that at the end of that period, the estate will revert back to the grantor
Remainderman (Life Estate)
The person receiving title upon the death of the life tenant; goes to a third party
Estate for Years (Leasehold)
A lease that ends on a specific date, survives the death of either party, and is inheritable.
Tenancy at Will (Leasehold)
An estate for an unknown period of time; either party may terminate the lease by giving notice to the other.
Tenancy at Sufferance (Leasehold)
Created when a tenant wrongfully holds over past the end of the duration period of the tenancy
Commercial Leases (Name 3 Types)
Gross; Net; Percentage
Gross Lease
All expenses related to the property, such as taxes, insurance, and maintenance, are part of the lease payment and are paid by the landlord
Net Lease
The tenant pays some or all property expenses (taxes, insurance, maintenance, etc…) separately. Triple net means tenant pays all three, double net pays two, etc…
Percentage Lease
The tenant pays a base rent plus an additional charge that’s a percentage of the tenant’s gross sales
Loft Lease
Provided for rental of floor space for open spaces; Generally preclude tenant from making structural changes or any changes that could impact utility services
Lien
A claim against property made by someone in order to secure payment of a debt
Collateral
An asset that has been pledged by the recipient of a loan as security on the value of the loan
Lien Priorities
Highest priority-senior loans, real property tax liens and special assessments; Second priority-mechanic’s liens and materialmen’s liens; Third and subsequent priority-all others, usually in the order of filing
