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Real Estate 101 > Topic 4 > Flashcards

Topic 4 Flashcards

Ownership of Real Property

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1
Q

Rights that apply to land adjacent to running water. Allow an owner to use and enjoy, within reasonable limits, the water that borders or runs through his property (fish, swim, build a pier/boat house, divert water for irrigation). Only apply when more than one property adjoins the same body of water.

A

riparian rights

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2
Q

Accessible to commercial boat traffic, are publicly owned. Can’t become private property of anyone. Ownership stops at water’s edge. Same usage rights as public.

A

navigable waters

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3
Q

Ownership doesn’t stop at water’s edge. Owner will often hold title to the waterway up to it’s midpoint, or from bank to bank if the waterway runs through the owner’s property.

A

non-navigable waters

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4
Q

A body of water completely enclosed by a single property (pond or small lake) is considered…

A

A natural part of that property

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5
Q

In states where water’s scarce, the ownership and use of the water’s often determined by the ________.

Right to use water’s controlled by the state.

A

doctrine of prior appropriation

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6
Q

Apply to ocean front property or property on some large lakes. Ownership usually extends to the point of high tide. Owners may not stop or alter the free movement of the water or infringe upon public rights of use.

A

littoral rights

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7
Q

Include underground water resources (springs, geysers, and streams). An owner may tap such waters by drilling a well (for ex.) and may use them for his owner purposes.

A

percolating waters

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8
Q

In states where water’s scarce, ownership and use of water are often determined by this doctrine. States that the right to use any water, with the exception of limited domestic use, is controlled by the state rather than by the landowner adjacent to the water.

A

doctrine of prior appropriation

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9
Q

The state or condition of holding legal claim or title to something.

A

ownership

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10
Q

The indefinite “something” to which claim or title is held

A

property

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11
Q

Real property consists of…

A
  1. Land, including everything above and below it.
  2. Improvements
  3. Plants, tress, and crops

*Each of these aren’t necessarily present in all real property

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12
Q

The surface of the earth, soil, anything permanently attached to the earth’s suface (trees and water), air space above, and substances below.

A

land

*Includes both corporeal (tangible) and incorporeal (intangible) things

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13
Q

Physical characteristics of land…

A

Permanence
Immobility
Complexity
Uniqueness

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14
Q

Categories of real property…

A 
Residential
Commercial
Agricultural
Special purpose
Industrial
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15
Q

Economic characteristics of land…

A

scarcity (dependent upon human demand and uses of the land)

modification (affect property and surrounding properties)

fixity of investment (improvements on the land represents capital invested)

situs (location as a determinant of the land’s economic value)

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16
Q

Positive situs factors…

A 
Safety
Low traffic volume
Accessibility
Schools
Stores
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17
Q

An owner’s right to things below the surface of his property

A

mineral rights

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18
Q

___ years is max time you may retain mineral rights in LA if there has been no activity

A

10

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19
Q

Rights that attach to the space above the surface of an owner’s property.

Protect owner against unreasonable obstruction of his property from above.

Can’t, in most cases, prevent planes from flying over one’s property.

A

air rights

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20
Q

Any permanent, man made attachments or additions to the land. Immovable. Can be owned by someone other than the owner of the land.

A

improvements

factories, houses, offices, libraries, schools, driveways, fences, sidewalks, etc

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21
Q

In LA, improvements which aren’t owned by the owner of the land are known as…

A

Separate immovable or movables

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22
Q

An item of personal property which has been permanently attached to real property such that it is considered a part of the real property.

A

Fixture

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23
Q

In LA, the term for a fixture…

A

Component by attachment

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24
Q

Commonly used for deciding disagreements over fixture status…

A
  1. Agreement between parties
  2. Method of attachment
  3. Intention of the party doing the attaching
  4. Adaptability of the attached object to the property
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25
Q

If the buyer and seller agree on the status of any object, no other factors need to be taken into account. Supersedes all other considerations as to what does or doesn’t constitute a fixture. To be binding, must be written into the contract of sale.

A

Agreement between parties

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26
Q

The more permanently an item is attached to the property, the more likely it will be considered a fixture. Objects whose removal would cause structural damage (cement, water pipes, etc) must be considered a fixture.

A

Method of attachment

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27
Q

Did the owner intend to make the object a permanent addition to his property (split rail fence), or did he regard its installation as only temporary (oil painting)?

A

Intention of the party doing the attaching

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28
Q

Things which by their nature have been designed to suit one property will usually be considered fixtures. (Window screens)

A

Adaptability of the attached object

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29
Q

A tree is considered real property until it is cut down by the owner, at which time it becomes personal property

A

severance

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30
Q

The owner buys a plant at a nursery it is personal property until such time as it is planted on the property.

A

annexation

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31
Q

Exception to the rule. Things attached to real property for the purpose of carrying on a business. Considered personal rather than real property. Business owner is generally held responsible for any damages to the property resulting from their removal.

A

Trade fixtures

barber chairs, dentist chairs, bowling lanes, etc.

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32
Q

Naturally growing things on the land that don’t need annual cultivation. Considered real property

A

Fructus Naturales

Fruits of nature

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33
Q

Essentially farm crops, things that are grown and harvested every year. Considered personal property. If land is sold during the growing season, and before harvest time, the unharvested crops may be considered as real property.

A

Fructus Industriales or emblements

Fruits of industry

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34
Q

In LA, the crop will be considered either…

A

a movable or immovable

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35
Q

The area of land granted by the king or lord was known as a fief or feud, hence the name…

A

Feudal System

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36
Q

Every parcel, has a title which legally confers ownership. Whoever holds title to the land, owns the land itself, and this is the system we use today.

A

Allodial System

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37
Q

The rights of the real property owner can be represented as a bound together collection of sticks known as the…

A

“Bundle of Rights”

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38
Q

Each stick in the bundle of rights represents a specific right…

A

Right to build, sell, lease, mine for minerals, plant and harvest crops, etc.

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39
Q

Rights in the bundle are both…

A

separable and divisible

Can be separated or divided among several owners

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40
Q

In Common Law, the 4 main groups of rights that comprise the bundle of rights are:

A
  1. ) Rights of Possession-allow an owner to occupy the property he owns.
  2. ) Rights of Control-allow the owner to control the way in which his property is used.
  3. ) Rights of Quiet Enjoyment-Insure that an owner will be able to use and enjoy his property w/out interference of other parties
  4. ) Rights of Disposition-Allow the owner to dispose of his property as he chooses (sell, will, or give away)
  5. ) Exclusion-Keeps others from entering or using the property
41
Q

In LA, the bundle of rights may be compared to…

A

the rights of usus, fructus, and abusus

42
Q

An ownership interest in real property extending for an indeterminable length of time. A freeholder owns the property indefinitely, until he dies, sells, or wills it to someone else.

A

Freehold Estate

43
Q

An interest in real property that does NOT last indefinitely. Limited to a specific period of time. They are interests of a tenant rather than an owner.

A

Non-freehold or leasehold estate

44
Q

The most complete form of ownership recognized by law. Grants ownership in an absolute sense. No restrictions or conditions. Owner may own land and all its rights together, or just the rights by themselves. Lasts forever and may be passed from heir to heir.

A

Fee Simple Estate or Fee Simple Absolute

45
Q

In LA, free simple estate is known as…

A

full or perfect ownership

46
Q

When a fee simple estate has special conditions or limitations attached to the ownership

A

Fee simple defeasable estate

47
Q

Two types of defeasable estates…

A
  1. ) Qualified or Determinable Fee Estate

2. ) Estate Fee Simple on Condition Subsequent

48
Q

Ownership with conditions. Uses the wording “so long as” or “during”. Estate is held as long as the conditions are met. If the restriction is violated, ownership reverts to the former owner.

A

Qualified or Determinable Fee Estate

49
Q

The new owner is prevented from performing some action or activity. If the conditions aren’t met, the grantor has the right to reclaim ownership, however it isn’t automatic and he must go to court to assert his right.

A

Estate Fee Simple on Condition subsequent

50
Q

Both types of ownership with conditions are…

A

future interests

51
Q

a legal right to property ownership that does not include the right to present possession or enjoyment of the property

A

future interests

52
Q

Provisions for reversion are contained in a

A

reverter clause

53
Q

Once the property reverts to the original owner it becomes a…

A

fee simple estate again

54
Q

Two types of freehold estates…

A
  1. ) Fee Simple Estate

2. ) Life Estates

55
Q

Owner holds title as long as he or some other specified person is alive. When the owner dies, title passes to a designated 3rd party or reverts back to the original owner or his heirs.

A

life estate

56
Q

the life estate owner retains title until the death of a third party

A

Pour Autre Vie “for the life of another”

57
Q

Upon creation of a life estate, the owner designates who will own the property upon the death of the life estate owner. This person is called…

A

the remainderman

58
Q

The interest the remainderman acquires is called…

A

a future of remainder interest

59
Q

The remainderman acquires…

A

a fee simple interest with no limitations

60
Q

If no remainderman is named, title reverts to the original owner or his heirs.

A

life estate in reversion

61
Q

Two types of life estates…

A
  1. ) Conventional life estates

2. ) Legal life estates

62
Q

Created by the deed or will of the owner

A

Conventional life estates

63
Q

Created by state law

A

Legal life estates

64
Q

Three types of legal life estates…

A
  1. ) Dower-the interest a widow holds in her deceased husband’s estate
  2. ) Curtesy-the widower’s interest in the estate of his deceased wife
  3. ) Homestead-exemption of the family’s primary residence from forced sale for the satisfaction of personal debts.
65
Q

Ways in which real estate may be owned…

A
  1. ) Ownership in severalty

2. ) Co-ownership

66
Q

A person owning property by himself

A

Ownership in Severalty

*LA, sole ownership

67
Q

Ownership by two or more people. Rights of the ownership are shared.

A

Co-ownership

*LA, ownership in indivision

68
Q

5 types of co-ownership…

A
  1. ) Tenancy in Common
  2. ) Joint Tenancy
  3. ) Tenancy by the Entirety
  4. ) Community Property
  5. ) Special Forms of Co-Ownership
69
Q

Simplest type of co-ownership. Each tenant, or owner, holds the title to a specific share of the property. As many titles to the property as there are tenants. Each tenant may sell, will, or dispose of his share as he chooses. His interest is said to be undivided. He has the right of use and access for all of it. The tenant may will his share, and upon his death, his share passes to his heirs if there’s no will.

A

Tenancy in Common

70
Q

In LA, the only form of co-ownership for unmarried persons.

A

Ownership in indivision

Tenancy in Common

71
Q

Characterized by four unities. All members must acquire their interest at the same time, each tenant holds an equal share, and it has the right of survivorship. He can’t will his share. He can sell his share, but the new owner would be a tenant in common.

A

Joint Tenancy

Has been called “Poor Man’s Will”

72
Q

Why is joint tenancy illegal in LA?

A

Because of the forced heirship laws. In LA, there can be no right of survivorship.

73
Q

A legal division of joint tenancies and tenancies in common is done through this legal action

A

partition suit

74
Q

The court first seeks a _____, in which the property is divided up according to each owner’s percentage share

A

partition in kind

75
Q

If no division of the property is practical, or the owners can’t agree to a division, then the court will seek a ______. The court will order the property to be sold and the proceeds distributed to the owners according to their percentage share.

A

partition in licitation

76
Q

Based on the common law principle that the husband and wife constitute a single legal entity. Entire estate owned by both spouses as a single person. Both spouses must sign to transfer property. Neither spouse can acquire or dispose of property w/out other’s consent.

Four unities apply.

Has the right of survivorship.

Lasts as long as the marriage lasts. Can only be dissolved by divorce or death. Only legally married persons my form this.

A

Tenancy by entirety

*Don’t have in LA

77
Q

Four unities…

A

PITT

possession, interest, time and title

78
Q

Emphasizes NOT the unity of spouses, but their equality as married partners. All property, both real and personal, that is acquired by the marriage is owned by both spouses as equal partners, each having a half interest. Each spouse may buy real property w/out the other’s consent, however, neither may sell or transfer property w/out the other’s agreement.

A

Community property

79
Q

Any property acquired outside the marriage. Property which is inherited, received as a gift, or acquired before or after the marriage

A

Separate Property

80
Q

Members own shares of stock rather than real property. Really a corporation owning real estate for the sole purpose of providing housing for its members. Stock each member holds entitles him to exclusive use of one of the cooperative’s housing units.

A

co-operatives

81
Q

Confers rights that are more than an ordinary renter’s, but less than a full owner’s

A

proprietary lease

82
Q

Occupants of the housing unit they lease and owners of the stock in the co-operative

A

occupant-owners

83
Q

A form of ownership that involves several owners holding fee simple title to individual units in a property and proportional shares in the whole property’s common elements (land, walls, structural supports, stairwells, swimming pools, etc). Owner owns property in severalty, as sole owner of his unit, AND as a co-owner of the common element.

A

Condominiums

84
Q

Condominium laws are called…

A

“horizontal property acts”

85
Q

In LA, only by checking the condo declaration can you tell if the land beneath the condo is…

A

co-ownership sole ownership

86
Q

Multiple purchasers can buy interest in real estate. Each purchaser has the right to use the property for a fixed period of time. Owner has fee simple ownership for a specific period of time.

A

Timeshare ownership

87
Q

Ownership arrangement in which property is held by one party for the benefit of another.

A

trusts

88
Q

Three parties involved in a trust….

A

The trustor conveys title to the property to the trustee, who will own the property for one or more people, the beneficiary. The trustee is bound to act always in the beneficiary’s interest in administering the trust.

89
Q

Combine different land uses such as housing, recreation, and business in one development. They require special zoning ordinances. Owners don’t have direct ownership interest in the common areas.

A

Planned Unit Developments (PUD’s)

90
Q

Highrise developments which combine offices, stores, theaters, and apartments in a single building. They may also offer laundry facilities, restaurants, groceries, hair salons, etc.

A

Mixed Use Developments (MUD’s)

91
Q

Title to the business is held by one person

A

sole proprietorship

92
Q

an association of two or more persons joined together for business purposes as co-owners.

A

Tenancy in Partnership

93
Q

Each partner is responsible for the partnership’s debts up to the limits of his own private resources, and is held individually liable for any business losses and obligations.

A

General partnership

94
Q

type of partnership includes one or more general partners as well as its silent, or limited partners. The limited partners put up most of the investment capital, but do not have much to say in the management of the business. They incur less personal financial risk than general partners, but do not have the organizational control that the general partners have.

A

Limited partnership

LA, “partnership in commendam”

95
Q

Considered a legal entity in the eyes of the law. Management is controlled by the board of directors. Individuals invest by purchasing stock. Stock is considered personal property, therefore, stockholders don’t have a direct ownership interest in any real estate the corporation owns

A

Corporations

96
Q

Disadvantage of corporate ownership

A

the profits are subject to double taxation. The corporation must pay a corporate tax, and the profits that are distributed to the shareholders are taxed again as dividends or individual income.

97
Q

two or more people or firms who join together to operate a real estate investment. It is not a legal entity. It may be organized under several types of co-ownership ownership including tenancy in common and joint tenancy.

A

Syndicates

98
Q

a form of partnership in which two or more people or firms carry out a single business project. It exists only for the duration of the project. Most states have adopted the Uniform Partnership Act (UPA) which allows real estate to be held in the name of the partnership.

A

Joint Venture

Real Estate 101 (11 decks)

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