Unit 2: Real Property and Law Flashcards
Land
Earth’s surface extends downward to the center of the earth and upward to infinity.
RE
Land plus all human-made improvements to the land that are permanently attached.
Improvement
Land can be any artificial thing attached to or below the ground, such as a building, fence, water line, or sewer pipe, as well as growing things that are made part of the landscape.
Real Property
The interests, benefits, and rights that are automatically included in ownership of real estate. In some states, real estate and real property are synonymous.
Bundle of Legal Rights
- Right of possession
- Right to control the property within the framework of the law
- Right of enjoyment (to use property lawfully)
- Right of exclusion (to keep others from entering or using the property)
- Right of disposition (to sell, will, transfer, or otherwise dispose of or encumber the property)
Surface Rights
Ownership rights in a parcel of real estate that are limited to the surface of the earth.
Subsurface Rights
The rights to the natural resources below the earth’s surface.
Air Rights
The right to use the space above the earth may be leased or sold independently, provided the rights have not been limited by law. Air rights can be important, particularly in large cities, where air rights over railroads can be purchased for building purposes.
Water Rights
Common-law or statutory rights held by owners of land adjacent to rivers, lakes, or oceans and are restrictions on the rights of land ownership.
Riparian Rights
Common-law rights granted to owners of land along the course of a river, stream, or similar flowing body of water. Gives the owner full access to the body of water except to alter the flow or contaminate it. This type of right comes with a non-navigable waterway and ownership is granted to the center of the waterway, up until the next lot of land starts.
Littoral Rights
Rights go to owners whose land borders commercially navigable lakes, seas, and oceans. Usually means that they own land up until the water starts and the rest is owned by the public.
Accretion
An owner is entitled to any land created through accretion.
Erosion
Owners may lose land due to erosion, Fortunately, erosion is a slow process that takes up hundreds of years.
Avulsion
Losing land by a sudden natural event. Owners can lose land due to earthquakes or mudslides. Most unfortunate.
Prior Appropriation
The right to use any water, except for limited domestic use, is controlled by the state rather than by the landowner adjacent to the water.
Personal Property
All property that can be owned and that does not fit the definition of real property.
Manufactured Housing
Housing is built specifically to the standards of the Department of Housing and Urban Development. (HUD)
Emblements
Considered personal property, annually cultivated agriculture.
Severance
Act of separating from land
Annexation
Act of changing personal property into real property. Ex. Sand, Water, and Rocks into Cement for a sidewalk which turns it into real property.
Fixture
Personal property that has been attached to land or a building that, by law, becomes part of the real property. Ex. Cabinets, light fixtures, and plumbing.
Legal Tests of a Fixture (M.A.R.I.A)
M.A.R.I.A
Method of annexation: How permanent is the method of attachment? Can the item be removed without causing damage to the surrounding property or if damage can be easily repaired?
Adaptability of the item for the land’s ordinary use: Is the item being used for real or personal property? Ex. A fridge is considered personal but if used to match cabinetry then it can be a fixture.
Relationship of the parties: In general, a court will favor a tenant over a landlord, a buyer, or a seller.
Intention of the person in placing the item on the land: A most important consideration, but the actions of the tenant may not be consistent with the tenant’s earlier intention. If an item looks to be for temporary use then it shouldn’t be made to try and look permanent.
Agreement of parties: Have the parties agreed on whether the item is real or personal property?
Trade Fixture
An article owned by a tenant, attached to a rented space or building and used in conducting a business. Ex. Barbers chair in barber shop.
Accession
Trade fixtures that are installed and not removed by date of sale.
Four Economic Characteristics of Real Estate
Scarcity - Land is rare in that there’s a limited supply and location adds value.
Improvements - Building an improvement on one parcel of land can affect the land’s value.
Permanence of Investment - The capital and labor used to build an improvement represents a large fixed investment.
Area Preference - Also known as situs is commonly known as location, location, location. Preference to a specific location.
Three Physical Characteristics of Land
Immobility - The geographical location of any given parcel of land can never be changed. It is fixed and therefore immobile.
Indestructibility - Land is considered indestructible, even though it is subject to both natural and human forces. No matter what changes it can occur, it will still be there.
Uniqueness - Also known as nonhomogeneity, is the concept that no two parcels of land are the same or in the same location.
Laws Affecting RE
Contract law
General Property law
Agency law
RE license law
Federal, State, and Local laws and regulations
