Unit 1: Real Property and the Law Flashcards
Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.
accession
The right to use the open space above a property, generally allowing the surface to be used for another purpose.
air rights
The process of converting personal property into real property.
annexation
A right, privilege, or improvement belonging to, and passing with, the land.
appurtenance
People’s desire for one area over another, based on a number of factors such as history, reputation, convenience, scenic beauty, and location.
area preference
The concept of land ownership that includes ownership of all legal rights to the land—for example, possession, control within the law, and enjoyment.
bundle of legal rights
See personal property. that do not fit into the definition of real property; movable objects.
chattel
Growing crops, such as grapes and corn, which are produced annually through labor and industry; also called fructus industriales.
emblements
Dwellings that are built off site and trucked to a building lot where they are installed or assembled.
factory-built housing
An item of personal property that has been converted to real property by being permanently affixed to the realty.
fixture
(1) Any structure, usually privately owned, erected on a site to enhance the value of the property—for example, building a fence or a driveway. (2) A publicly owned structure added to or benefiting land, such as a curb, sidewalk, street, or sewer.
improvement
The earth’s surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water.
land
Dwellings built to HUD specifications that are at least 320 square feet and on a permanent chassis.
manufactured housing
The process of downward land shifts due to the collapse of underground mine shafts and groundwater flows, usually resulting in sinkholes and troughs. The damage to structures may be functional, cosmetic, or structural.
mine subsidence
A lack of uniformity; dissimilarity. Because no two parcels of land are exactly alike, real estate is said to be nonhomogeneous.
nonhomogeneity
Items, called chattels, that do not fit into the definition of real property; movable objects.
personal property
Land; a portion of the earth’s surface extending downward to the center of the earth and upward infinitely into space, including all things permanently attached to it, whether naturally or artificially.
real estate
The interests, benefits, and rights inherent in real estate ownership.
real property
Changing an item of real estate to personal property by detaching it from the land; for example, cutting down a tree.
severance
The personal preference of people for one area over another, not necessarily based on objective facts and knowledge.
situs
Ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property.
subsurface rights
Ownership rights in a parcel of real estate that are limited to the surface of the property and do not include the air above it (air rights) or the minerals below the surface (subsurface rights).
surface rights
An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires.
trade fixture
Common law rights held by owners of land adjacent to rivers, lakes, or oceans; includes restrictions on those rights and land ownership.
water rights
Land is defined as the earth’s surface extending downward to the center of the earth and upward into space, excluding permanent natural objects such as trees and water. True or False
FALSE- Land is defined as the earth’s surface extending downward to the center of the earth and upward into space, including permanent natural objects such as trees and water.
Real estate is defined as land at, above, and below the earth’s surface, and all things attached to it, whether permanent or chattel. TRUE or FALSE
FALSE- Real estate is defined as land at, above, and below the earth’s surface, and all things permanently attached to it, whether natural or artificial.
Personalty is considered to be all property that does not fit the definition of real property. TRUE or FALSE
TRUE- Personal property, sometimes called personalty, is considered to be all property that does not fit the definition of real property. An important distinction between the two is that personal property is movable. Items of personal property are also called chattels.
A tenant’s personal property that is attached to a rented space and is used in conducting a business is a trade fixture. TRUE or FALSE
TRUE- An article attached to a rented space or building for use in conducting a business, but which is the personal property of the tenant, is a trade fixture.
Real estate possesses two basic characteristics that define its nature and affect its use: economic and developmental. TRUE or FALSE
FALSE- Real estate possesses seven basic characteristics that define its nature and affect its use. These characteristics fall into two general categories: economic and physical.
Location is often considered the most important economic characteristic of land. TRUE or FALSE
TRUE- Location, also known as area preference or situs, refers not only to a geographic area of land but also to people’s preferences. Several factors including convenience, reputation, and history result in different price points.
Real estate licensees are permitted to give advice on matters of law, as long as the question pertains to real estate transfers. TRUE or FALSE
FALSE- Only attorneys are trained and licensed to prepare documents defining or transferring rights in property and to give advice on matters of law.
Each state enacts the laws that determine how one acquires a real estate license. TRUE or FALSE
TRUE- All 50 states, the District of Columbia, and all Canadian provinces have passed laws that require brokers and salespersons to be licensed. Although such laws are similar, they do differ from state to state.
Which phrase BEST defines real estate?
- Land and the mineral rights in the land
- Land and the air above it
- Land and all things permanently attached by nature
- Land and all things permanently affixed to it
The answer is land and all things permanently affixed to it. Real estate includes in its definition all things permanently attached to the land either by nature or by man.
The term nonhomogeneity refers to scarcity immobility indestructibility uniqueness
The answer is uniqueness. Nonhomogeneity is another way of stating one of the physical characteristics of land, the characteristic that recognizes that land is unique.
The bundle of legal rights is included in the definition of land real estate. real property. trade fixtures.
The answer is real property. The definition of real property includes more than the physical nature of either “land” or “real estate.” Real property includes interests, rights, and benefits associated with ownership.
The bundle of legal rights includes all of the following rights EXCEPT
- possess the property.
- enjoy the property within the framework of the law.
- sell or otherwise convey the property.
- use the property for any purpose, legal or otherwise.
The answer is use the property for any purpose, legal or otherwise. The bundle of legal rights recognizes the right of an owner to use the property for a legal purpose. There is no legal right to use property for an illegal purpose.
Which of the following is a physical characteristic of real estate?
- Location or area preference
- Permanence of investment
- Indestructibility
- Scarcity
The answer is indestructibility. Indestructibility refers to a physical characteristic of real estate, not an economic characteristic.
Which of the following would NOT be a consideration when determining whether an item is real property?
- Manner in which the item is actually used with other real property
- Method of its attachment to other real property
- Cost of the item when purchased
- Intended use of the item by its owner
The answer is cost of the item when purchased. Tests used to determine whether an article is a fixture include intention, manner of annexation, adaptation to the real estate, and the existence of an agreement. The cost of an article is not a relevant issue.
Which of the following is NOT an economic characteristic of real estate?
- Scarcity
- Permanence of investment
- Indestructibility
- Location or area preference
The answer is indestructibility. Indestructibility refers to a physical characteristic of real estate, not an economic characteristic.
Real property can be converted into personal property through
- severance
- accession
- conversion
- inference
The answer is severance. It is possible to change an item of real estate to personal property by severance. A growing tree is real estate until the owner cuts it down, at which point the lumber becomes personal property.
The tenant of a single-family home installs an awning over the building’s front windows to keep the sun away from some delicate hanging plants. Which of the following is TRUE?
- The tenant must remove the awning before the rental period is over.
- Because of its nature, the awning is considered personal property.
- The awning is considered a fixture.
- Because of the nature of the property, the awning is considered a trade fixture.
The answer is the awning is considered a fixture. Once attached to the real estate, the awning becomes a fixture and is therefore classified as real estate. The fact that it was attached by a tenant rather than the owner is not relevant.
Which entity is generally responsible for creating the requirements for a real estate license?
- County legislation
- Individual state law
- Federal legislation
- Local association of REALTORS®
The answer is individual state law. All 50 states, the District of Columbia, and all Canadian provinces have pass laws that require brokers and salespersons to be licensed. Although state laws are similar, they do vary in some details.
The buyers have asked their real estate agent to help them determine the correct way to take title to their new home. In this situation, the real estate agent should
- tell the buyers that it does not really matter how they take title.
- refer the buyers to their accountant.
- do the research and offer alternatives.
- suggest that the buyers consult an attorney.
The answer is suggest that the buyers consult an attorney. Only attorneys are trained and licensed to prepare documents defining or transferring rights in property and to give advice on matters of law. Licensees should suggest that the buyers consult legal counsel.
What is the purpose of real estate license laws?
- To ensure that there are agents to meet the needs of the public
- To prevent any one company from monopolizing the marketplace
- To protect the public from fraud, dishonesty and incompetence
- To limit the number of real estate licensees
The answer is to protect the public from fraud, dishonesty and incompetence. Because real estate licensees are involved with other people’s real estate and money, states require a certain amount of education before granting a real estate license.
