Section 3 Real Property and Bundle of Rights

Question 1

Real Property Characteristics

Answer 1

5 things
Immobility (and its value depends in great part on its location)
Uniqueness (not interchangeable); one parcel (piece of land) will not be exactly like another
Scarcity (it’s true: you can’t make more land)
Permanency and indestructibility (although this is not true for its improvements)
Illiquidity (not easy to convert to cash)

Question 2

Water Rights in California

Answer 2

California law gives property owners the right to use water (rather than owning the water), but that use must be beneficial and not wasteful. Unlike other western states, California uses a combination of riparian rights and prior appropriation.

Question 3

Riparian Rights

Answer 3

Landowners who own property with a flowing body of water have ________ rights to use that water. They don’t need permission or a license to exercise their right. They may use a share of the water that flows past their property but may not divert or store it.

Question 4

Percolating Ground Water

Answer 4

Landowners have the right to use ________________________ as long as it’s put to reasonable use. No permit is required to pump water from beneath the surface of a property owner’s land.

Question 5

Prior Appropriation

Answer 5

This includes application with a description of where the water will come from, how it will be used, and how much is needed. The state water board reviews the application for its environmental impact. If the use is approved, the board issues a permit

Question 6

Real property

Answer 6

Includes real estate (land and anything naturally or artificially attached to it), as well as the interests, benefits, and rights automatically included with real estate ownership.

Question 7

Two characteristics of Real Estate

Answer 7

Economic and Physical

Question 8

Four economic traits to Real Estate

Answer 8

1. Scarcity
2. Improvements
   3.Permanence of Investment
3. Location or area preference

Question 9

Scarcity

Answer 9

Duh, plus not all land is suitable to be built upon making it more valuable

Question 10

Improvements

Answer 10

improvements are structures, such as buildings, sheds, barns, fences, etc., that are placed on land.
1. The condition = positively or negatively affects $
2. Improvements can + /- value of surrounding properties or an entire community.
3. Proximity to commercial or industrial properties can adversely impact the value of entire neighborhoods or communities.

Question 11

Permanence of investment

Answer 11

The cost and nature of infrastructure improvements (roads, underground water, wastewater, natural gas, or electric installations) are sizeable and can’t be easily reversed, and these infrastructure investments have relatively stable returns over time. Thus, these types of improvements represent “permanence.”

Question 12

Location or area preference

Answer 12

A property’s value is in large part dependent on its situs (location). For example, land on one side of a river may be perceived to be more valuable than land directly across the same river.

Question 13

Physical traits to Real Estate

Answer 13

Immobility: The geographic location of land is fixed; it can never be changed.

Indestructibility: While improvements may deteriorate over time, the land itself cannot be destroyed.

Uniqueness: One parcel (a piece of land) will not be exactly like another. This is the concept of non-homogeneity.