Rights

Question 1

Allodial system

Answer 1

system of ownership where any individual who has the means can acquire rights of ownership and our govt protects these rights; right of individual to own land independently of political superiors, but allows the gov’t to retain the rights of eminent domain, police power, taxation and escheat

Question 2

Bundle of Rights

Answer 2

all the rights a person can have in real property; rights that go with private ownership—control, possession, disposition and enjoyment; individual rights may be separated from the “bundle”; owned independently of each other. Rights are not unlimited

Question 3

Possession

Answer 3

the right to occupy your property and to have ingress and egress (a way to get in/a way to get out)

Question 4

Use/control

Answer 4

right to make a profit from the land, remove objects from it, build on it, farm it, drill/mine on it, lease it to others,exclude others from it, mortgage it, grant an easement or license to others

Question 5

Enjoyment

Answer 5

right that assures against interference from others or nuisances from neighbors. Includes some rights over adjoining land such as the right to light, air, water and lateral support

Question 6

Disposition

Answer 6

allows the owner to sell the land, give it away or pass it on to heirs.

Question 7

Encumbrances

Answer 7

limitations or restrictions; anything which affects the fee simple title or the use of land such as liens, easements, restrictions and encroachments

Question 8

Estate in land

Answer 8

refers to the quality, quantity, nature, and extent of the ownership interest that a person holds in real property, not to the physical qty of land one may own.– either possessory or non-possessory

Question 9

Possessory Estate

Answer 9

the present right to occupy the estate

Question 10

Non-possessory estate

Answer 10

the future right to occupy the estate; will become possessory when a preceding possessory estate (such as a life estate) is terminated. One estate may exist simultaneously with another estate

Question 11

Freehold Estates

Answer 11

estates that will last for an indefinite period of time. Include fee estates that have the potential of lasting indefinitely (inheritable) and life estates that will last a lifetime: fee simple absolute, conditional fee (fee simple determinable & fee simple on condition subsequent), life estates (ordinary life estate & life estate pur autre vie), remainder estate, reversionary estate, legal life estate (dower, curtesy, homestead protection)

Question 12

Fee Simple Absolute

Answer 12

Fee Simple, Fee: estate in which the owner possesses the entire bundle of rights. The most complete ownership of right in the land that one can hold. Rights are only limited by gov’t and by rights of other individuals who might have a legal interest in the land. This estate is freely inheritable. Can be passed on to the heirs named in a will, or if no will, passed on by state of law of descent. “Best estate, no strings attached”

Question 13

Conditional Fee

Answer 13

type of fee estates that do not represent complete rights of ownership b/c they have “strings attached” Ownership is conditioned on the occurrence or on the non-occurrence of a certain event. Also called qualified or defeasible fees. Classified as either fee simple determinable or fee simple on condition subsequent.

Question 14

Fee Simple Determinable

Answer 14

ownership is subject to a certain limitation based on time. Conditional words and phrases such as “for so long as”, “during”, or “until” are used. Ex: “Johnson (the grantor) conveys ten acres of land to the city of Atlanta “so long as’ the land is used as a park. Should the city use the land for anything else, its ownership is terminated.” The estate would automatically go back (revert) to Johnson or Johnson’s heirs or would go to someone else (the remainderman) if one has been named.

Question 15

Revert

Answer 15

when an estate automatically go back to a person, a person’s heirs, or someone else.

Question 16

Remainderman

Answer 16

the person named in the “reverter clause” that ownership reverts back to in a fee simple determinable if the conditions of ownership are not met. The person who has a “future right” /”reversionary interest”

Question 17

Fee Simple on condition subsequent

Answer 17

ownership that is also subject to a condition–but there is no automatic reversion when the condition is no longer met. The estate can only be recovered through legal action. Deed may contain phrases like “provided that”, “on the express condition that.” The only way to get ownership back is by going to court and suing for possession within a reasonable time after the condition is violated or the right might be lost.

Question 18

Life Estates

Answer 18

Freehold estates b/c the duration of a life estate is going to be measured by a person’s lifetime and no one knows exactly how long that will be. Ends when the life ends. Life estate cannot be passed to heirs.

• ordinary life estate (conventional life estate):
• life estate pur autre vie

Question 19

Ordinary Life Estate/Conventional Life Estate

Answer 19

one created by a conveyance, usually through deed, will or trust. The person receiving the estate is called the life tenant. Life tenant (owner of the estate) is entitled to possess and use the land for the duration of the lifetime. Entitled to all profits, rent and other income that might be derived from the property and may sell, mortgage, lease or give away the estate. Cannot dispose of a fee estate. Anyone acquiring an interest from a life tenant should understand that their interest ends when that life ends.

When a life estate is granted– a future (non possessory) estate is created at the same time. It must be specified whether at the end of the lifetime, the estate will go back (revert) to the original grantor or whether it will go to someone else (a remainderman).

Question 20

Life estate pur auture vie

Answer 20

when the lifetime of a life estate is measured by the life of an individual other than the grantee.

Question 21

Remainder Estate

Answer 21

created when the owner of a fee simple estate grants a lesser estate to someone and at the same time names a person other than himself (the remainderman) who will receive the fee simple estate when the lesser estate ends. Lesser estates include life estates, fee simple determinable, fee simple on condition subsequent, and leaseholds. **the grantor divides the fee simple estate into two parts: the lesser estate (possessory) and the remainder estate(future right).

Question 22

Contingent remainder

Answer 22

created when the grantor makes the future rights dependent on both the termination of a lesser estate and on the fulfillment of a condition. inheritable
example: jack (grantor) conveys a property to his sister Samantha, for her life. the remainder estate is to go to Samantha’s children. if Samantha has no children, the estate reverts back to jack or his heirs

Question 23

Reversionary Estate

Answer 23

created when a lesser estate is conveyed but the future rights are reserved for the grantor or heirs of the grantor. ** example: a landlord or his/her heirs will typically regain possession of a leased property when the lease term ends**

All leasehold estates and any freehold estate, except for a fee simple absolute may be created with either a remainder or a reversionary interest. if no remainderman is named when creating a lesser estate, the estate is assumed to be reversionary.

Question 24

Waste

Answer 24

a life tenant is obligated to pay property taxes, mortgage payments, and not substantially alter the property from its intended use or allow it to deteriorate in value by failing to make reasonable repairs…

Question 25

Legal Life Estate

Answer 25

created by state law. Non possessory, future rights that only become possessory upon the death of a spouse.

• dower
• curtesy
• homestead protection

Question 26

Dower

Answer 26

a wife’s right to 1/3 to 1/2 interest in any property her husband owns, transferable at the time of his death, assuming she doesnt pre-decease him. While the husband lives, this is a future right called inchoate dower. Once he dies it becomes consumate dower. If a husband owns property in his own name, he has to have his wife’s signature to sell it to a buyer so her dower interest will be released. Cannot be defeated by will and intended to provide a means of support for surviving spouse. **not recognized in GA

Question 27

Curtesy

Answer 27

Husband’s right to 1/3 life estate in his wife’s property that she owns at the time of her death. In some states, curtesy exists only if there are children and is defeated if the husband deserts his wife.

• cannot be defeated by will and are intended to provide a means of support for the surviving spouse.
• not recognized in GA

Question 28

Homestead Protection

Answer 28

a right that protects a primary residence from a forced sale to satisfy debts and judgments. Mortgage, taxes, alimony, child support, criminal fines, awards for fraud, libel and slander would be exempt. May also protect a family residence from a sale to satisfy the debts of a deceased breadwinner.

Question 29

Leasehold Estates

Answer 29

“possessory estate”, “less-than-freehold/lease”
unlike freehold estates,not an estate of ownership
consists of a tenants (lessees) rights, granted by a lease. in a lease, the landlord (lessor) conveys the exclusive right of possession to the tenant for a specified period of time in exchange for a payment called rent. During the term of the lease, the landlord is still the fee simple owner and retains a leased fee estate which is also reversionary. Allows owners to recover possession when the lease period ends. Classified as either estate for years, an estate for period to period, an estate at will, estate at sufferance.

Question 30

Estate for years

Answer 30

exists when there is a lease agreement that gives the tenant exclusive possession of a property for a specified period of time. has a definite end. when the lease period expires, the landlord automatically recovers possession without the need for notice from either party unless the lease requires notice. Obligations created in an estate for years do not end with the death of the landlord (unless the landlord was a life tenant) or the death of the tenant. Most leases, rentals are “estates for years”

Question 31

Estate from period to period

Answer 31

the tenants right to occupy the property is for the term covered by the 1st rent payment and each time another payment is made, the right is automatically renewed for another period of equal length. Often called a month to month tenancy but can be for any period of time.

In most states, notice is required when the tenant wants to end this lease of by the landlord when the landlord seeks to regain possession. The lease will continue for an uncertain time until proper notice is given.

Question 32

Estate at will

Answer 32

Tenancy at will; usually a temporary arrangement in which the tenant can occupy the property for an unspecified period of time as long as the landlord gives permission. Estate is not assignable. It does require necessary notice by either party to terminate the possession. This estate ends with the death of either party or with the sale of the property.

Question 33

Estate at sufferance

Answer 33

tenancy at sufferance; arises when a tenant who is legally renting the property continues to remain in possession after the term of the lease expires. This tenant (HOLDOVER TENANT) can become a period to period tenant if the landlord accepts another rent check. Otherwise, the landlord can take steps to regain possession. The holdover tenant only differs from a trespasser in that the right to occupy was legal at one time.

Question 34

Encumbrances

Answer 34

external limitations/restrictions on an owners rights, use of the property or diminish its value. Can be public (imposed by the gov’t) or private

Question 35

Government Rights (PUBLIC ENCUMBRANCES)

Answer 35

Police Power
Eminent Domain
Taxation
Escheat
(PETE)

Question 36

Police Power

Answer 36

right of local, state or national govts to enact and enforce laws that regulate the use of private property in order to provide for the safety, health, morals and general well being of the community. Ex: planning restrictions, zoning, building codes, and environmental laws (EPA)

an owner who suffers loss of value due to an exercise of policy power is not guaranteed compensation, as would be the case of eminent domain. Ex: if zoning change causes land to lose value, the owner cannot expect to be paid the difference. Police power cannot be delegated to anyone else. It can be exercised only by govt authority. zoning can increase or decrease value of property

Question 37

Eminent Domain

Answer 37

govt’s power to take property with or without the owners consent, when it is needed for a public purpose such as a park, a road or a public school. This process is called CONDEMNATION. All levels of govt possess this power as do some quasi-public companies that serve the public (railroads, public utilities). Against the Constitution to take privately owned land unless for a public purpose that is proven and just compensated.– usually established by an appraisal. Just compensation may include more than fair market value – add’tl damages such as moving expenses.

• must be private property
• recently some local jurisdictions have used this power to condemn residential property for the benefit of commercial users (private entities) and have considered this to be a public benefit b/c the commercial owner pays higher property taxes.

INVERSE CONDEMNATION: a suit in court, where the property owner seeks to force govt to take property and pay for it. EX: if the owners use and enjoyment of the property is severely restricted when the highway dept. announces that this land will be part of a future right of way.

Question 38

Taxation

Answer 38

right that gives local gov’t and in some cases–state govt– the right to levy taxes on real property according to its value (ad valorem). These taxes generate revenue needed for services such as schools, parks, hospitals, and police/fire. Unpaid property taxes create a lien against the property and the govt has the right to foreclose on this lien to recover the money owned.

Property taxation– takes property over all other liens– doesn’t have to be filed.

Question 39

Escheat

Answer 39

exists b/c property ownership is both a privilege and an obligation so all property must have an identifiable owner. If property has been abandoned, or owner dies w/out will and heirs– state govt has right to take over property.

Question 40

Private Encumbrances that create lien

Answer 40

another persons rights which either grant that person an interest in the property as security for a debt (lien) or affect the use of the property. ** while private encumbrance may grant someone else a claim or right in owners property.. it should be noted that it does not usually prevent transfer of ownership.

1) Specific Liens
a) property tax liens
b) mortgage liens
c) mechanics liens
d) vendees liens
e) attachment liens

2) General Liens
a) Judgement Liens
b) Federal and state income taxes
c) Federal and state inheritance taxes
d) decedents debts

Question 41

Lien

Answer 41

a monetary claim a creditor has on a property of a debtor and the debtors property is security for a payment of the debt. This legal right may allow the creditor to force the sale of the property to satisfy the debt if it is not repaid. However, the instrument that creates the lien must be properly recorded in the county records in order for this to be enforceable. **priority is established by date of recording. Exceptions are property taxes that ALWAYS have 1st priority, mechanics liens are prioritized by date of performance and inclusion of subordination clause.

can be categorized in several ways:

1) Voluntary or involuntary:
- voluntary: recorded with the owners consent (mortgage lien)
- involuntary: without owners consent (tax lien)
2) statutory or equitable
- statutory: rights exists b/c of an act of the legislature (mechanics liens)/involuntary
- equitable: arises out of justice and fair play (vendees lien)/voluntary
3) specific or general:
- specific: attached to just on parcel of property (property tax lien)
- general: attached to any property the debtor has, real or personal (judgement lien)

Question 42

Specific Lien

Answer 42

enforceable against only 1 parcel of property, regardless of how many other parcels a debtor might own.

1. property tax liens
2. mortgage liens
3. mechanics liens
4. attachment liens

Question 43

Property Tax Liens

Answer 43

Comprised of 2 types of taxes on real property: AD VALOREM TAX and SPECIAL ASSESSMENT TAX.

• ad valorem tax: levied against each property owners according to the value of the property
• special assessment: tax for a local improvement such as a new sidewalk or street lighting. Only property owners who benefit from improvement are expected to pay the cost.

**RECORDED TAX LIENS HAVE PRIORITY OVER ALL OTHER LIENS

**involuntary/specific liens

Question 44

Impounds

Answer 44

monthly payments of property taxes that go into an escrow acct…

mortgage lender often requires an owner to establish escrow acct… b/c recorded tax liens have priority over all other liens.

Question 45

Mortgage Liens

Answer 45

exists when an owner pledges one specific property to the lender as security for a loan. If loan is not repaid according to the terms, the lender can force the sale of the property.

In a purchase money mortgage, the seller is the lender. The loan can be either a first or second mortgage loan, with the property pledged as security for repayment. In this case, the seller has a vendor’s lien.

VENDORS LIEN: purchase money mortgage or sellers’s lien…the seller holds a vendor’s lien against the property.

**voluntary, specific liens

Question 46

Mechanics Liens

Answer 46

statutory in nature, a law allows contractors, subcontractors, workmen and suppliers of building material to place a lien against a property, if they are not paid in full for improving it. This applies to both new construction and remodeling.

Priority is given to date in which material was delivered or when the work began… whichever occurred first.

*this lien has a degree of priority over other liens,

creditor must sue for $ owed of the lien will expire in 1 -2 year or whatever the stated time is.

A LIS PENDENS: a creditor might file and record a lis pendens…giving notice a suit is pending. Anyone searching this title on behalf of a prospective buyer would be aware of this legal action.

a subcontractor can file a suit if he was not paid by general contractor–even if the owner paid the general contactor. one way to avoid this risk is to deal only with contactors who provide a performance bond– insurance that the job will be completed according to contract.

Mechanics liens can only be filed for labor and construction materials.

**involuntary/specific liens

Question 47

Vendees Liens

Answer 47

The purchaser of property can file a vendee lien at the courthouse once the contract has been accepted in order for protection in the event the seller refuses or is unable to complete the transaction.

• in the amount of the deposit and related expenses in the event of a default.
• voluntary/specific lien

Question 48

Attachment Lien

Answer 48

grants the court custody of a specific property to prevent the owner from transferring ownership while a suit for damages is being decided. Before filing for the attachment, however, the plantiff (person taking the legal action) must post a bond to cover any loss suffered by the property owner in case no judgement is awarded.

This is the only lien that absolutely prevents a sale or any other conveyance of a property.

**involuntary, specific lien

Question 49

General Liens

Answer 49

encumber all real and personal property owned by a debtor, including properties owned before the lien was recorded or properties acquired after. To be effective the lien must be recorded in all counties where the debtor owns property. Result from judgments, federal or state income taxes, and a decendents debts.

All involuntary

Question 50

Judgment Lien

Answer 50

arises out of lawsuit. When one person sues another person for damages and the plaintiff wins the suit, the court awards a judgment in a specific dollar amount to establish the indebtedness. The judgment, when recorded in the county records, becomes a general lien against any real or personal property owned by the defendant in that county.

Once the judgment is rendered, if the debtor does not pay the amount due, the creditor may ask the court for a writ of execution authorizing the sheriff to seize and sell enough property to pay the debt and costs of the sale. When the debt is satisfied, the debtor should receive and record a satisfaction piece as evidence. Recording this will clear the title.

Question 51

Federal & State Income Taxes

Answer 51

any unpaid federal or state income taxes become general liens against the taxpayers real or personal property. The lien will be filed against the taxpayer in the county where the taxpayer resides without court intervention.

Question 52

Federal & State Inheritance Taxes

Answer 52

Property owned by a decedent is subject to federal estate taxes after certain exemptions are allowed. If this tax is not paid, all property in the estate is encumbered by a general lien. Some states also assess inheritance taxes and the same rule applies.

Question 53

Decedent’s Debts

Answer 53

When someone dies, existing liens on the decedents property must be satisfied before the property passes to heirs. Outstanding debts that heirs cant pay create a lien against real property and the real property can be sold to satisfy the remaining debts.

Question 54

Private Encumbrances which affect the use of the property

Answer 54

easements, deed restrictions, or encroachments

Question 55

easements

Answer 55

non possessory, intangible right one person has to use another persons land in a specified manner and for a specified purpose. The holder of the easement does not own or possess the land but has only an interest, a right of use. Because an easement is an actual interest in the land, the statue of fraud applies and an easement which is freely given must be in writing. The easement is irrevocable and an encumbrance on the grantor of that right. Easements are either appurtenant or in gross.

Question 56

Easements appurtenant

Answer 56

“important to, 2 properties”…
2 separate properties usually, but not necessarily, adjacent to one another. They must have different owners. The owner granting the easement, and therefore burdened by it, known as the servient estate. The owner that benefits from receiving this right is the dominant estate.

“runs with the land”… not just a contact btw 2 owners…but a relationship btw 2 parcels of land. When ownership of either parcel is transferred–the easement automatically goes with it, whether or not its mentioned in the deed.

Examples: common driveways, right to use anothers land for ingress/egress, right to use water from another landowners well, or a party wall (wall that straddles the boundary line btw 2 adjoining properties and is part of the improvement on both lots. Typically, each owner owns the half of the wall that is on his side