Unit 2: Real Property and the Law

Question 1

Land

Answer 1

Earth’s surface extending downward to the center of the earth and the airspace above the land, including the trees and water

Question 2

Real Estate

Answer 2

Land plus permanent human-made additions

Question 3

Real Property

Answer 3

Real Estate plus bundle of legal rights, benefits, and interests

Question 4

Land has 3 physical characteristics:

Answer 4

immobility, indestructibility, and uniqueness

Question 5

Bundle of legal rights

Answer 5

1. Right of possession
2. Right to control the property within the framework of the law
3. Right of enjoyment
4. Right of exclusion (keep others from entering/using the property)
5. Right of disposition (to sell, will, transfer)

Question 6

The concept of bundle of rights comes from old English Law. In the Middle Ages, a seller transferred property by giving the purchaser a handful of earth or a bundle of bound sticks from a tree on the property.

Answer 6

True.

Question 7

What are the two meanings to the work ‘Title’

Answer 7

1. the right to or ownership of the property, including bundle of rights; and
2. evidence of that ownership by a deed

Question 8

The document by which the owner transfers title to the property

Answer 8

Deed

Question 9

a right or privilage associated with the property, although not necessarily a physical part of it

Answer 9

Appurtenance

Question 10

Examples of an appurtenance

Answer 10

parking spaces, water rights, easements, and other improvements

Question 11

The rights to the natural resources below the earth’s surface. The owner may also transfer subsurface rights without trading surface rights.

Answer 11

Subsurface Rights

Question 12

The rights to use the space above the earth may be sold or leased independently, provided it was not limited by law

Answer 12

Air rights

Question 13

Government and airport authorities often purchase adjacent air rights to provide approach patterns for air traffic

Answer 13

True

Question 14

Air and solar rights are regulated by state and local laws and regulations

Answer 14

True

Question 15

common-law or statutory rights held by the owners of land adjacent to rivers, lakes, or oceans and are restrictions on the rights of land ownership

Answer 15

Water rights

Question 16

Common law rights granted to owners of land along the course of a river, stream, or similar flowing body of water

Answer 16

Riparian rights

Question 17

The only limitation on the owner’s use is that such cannot interrupt or alter the flow of water or contaminate it in any way

Answer 17

True

Question 18

Navigable waters are considered public highways in which the public has an easement or right to travel

Answer 18

True

Question 19

Owners whose land borders commercially navigable lakes, seas, and oceans. Owners with these rights can enjoy unrestricted use of available water but own the land adjacent to the water only up to the avg. high-water mark

Answer 19

Littoral Rights

Question 20

In some states, riparian and littoral rights are appurtenant to (run with) the land and cannot be retained when the property is sold.

Answer 20

True

Question 21

An owner is entitled to all land created through accretion:

Answer 21

increases in the land resulting from the deposit of soil by the water’s action

Question 22

The gradual and sometimes imperceptible wearing away of the land by natural forces, such as wind, rain, and flowing water

Answer 22

Erosion

Question 23

the sudden removal of soil by an act of nature. Ex: Earthquake or mudslide

Answer 23

Avulsion

Question 24

Under this doctrine, 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.

used where water is scarce

Answer 24

Doctrine of Prior Appropriation

Question 25

How to secure water rights in prior appropriation states?

Answer 25

A landowner must demonstrate to the state’s agency that the plans are for beneficial use, such as crop irrigation. If requirements are met, the landowner received a permit to use a specified amount of water for the beneficial use

Question 26

What law identifies territorial waters as those extending up to 12 nautical miles (13.8 land miles) from a base line that is the mean low-water line of a coastal country

Answer 26

The Law of the Sea (1982)

Question 27

What are the 4 economic characteristics of real estate?

Answer 27

1. Scarcity
2. Improvements
3. Permanence of investment
4. Area preference

Question 28

this economic characteristic refers not only to geography but also to the preference for a specific area

Answer 28

Area preference (location)

Question 29

Area preference is based on?

Answer 29

Convenience, reputation, and history

Question 30

All property that can be owned and that does not fit the definition of real property

Answer 30

Personal Property

Question 31

Personal property is movable?

Answer 31

Yes.

Question 32

Personal property is transferred by a bill of sale.

Answer 32

True

Question 33

Items of personal property, include such tangibles as chairs, tables, clothing, money, bonds, and bank accounts

Answer 33

Chattels

Question 34

_____ is that which is built specifically to the standards of the Department of Housing and Development (HUD)

Answer 34

Manufactured Housing

Question 35

Any type of factory-built or manufactured housing may be considered real property IF it becomes permanently affixed to the land

Answer 35

True

Question 36

Trees and crops fall into 2 classes

Answer 36

1. Trees, perennial shrubbery, and grasses that do not require annual cultivation (fructus naturales) < Considered Real Estate
2. Annually cultivated crops such as fruits, veggies, and grain are knows as emblements (fructus industrales) < considered personal property

Question 37

An item of real property can become personal property by

Answer 37

Severance: the act of separating it from the land

Question 38

It is possible to change personal property into real property through…

Answer 38

annexation

Question 39

Personal property that has been so attached to land or a building that, by law, it becomes part of the real property

Answer 39

Fixture

Question 40

What are the 5 legal tests of a fixture (MARIA)

Answer 40

1. Method of Annexation
2. Adaptability of the item for the land’s ordinary use
3. Relationship of the parties
4. Intention of the person in placing the item on the land
5. Agreement of the parties

Question 41

Method of annexation

Answer 41

How permanent is the method of attachment? Can it be removed without causing damages?

Question 44

Adaptibility of the item for the land’s ordinary use

Answer 44

Is the item being used as real or personal property?

Question 44

Relationship of the parties

Answer 44

a court will favor a tenant over a landlord, and a buyer over a seller

Question 44

Intention of the person in placing the item on the land

Answer 44

The actions of the tenant may not be consistent with the tenant’s earlier intention

Question 45

Agreement of the parties

Answer 45

Have the parties agreed on whether the item is real or personal property in the provisions of an offer to purchase or lease?

Question 46

An article owned by a tenant, attached to a rented space or building, and used in conducting a business

Answer 46

Trade Fixture

Question 47

Examples of trade fixtures

Answer 47

Hydraulics in an auto shop, pin-setting equip in a bowling alley, and dining booths in a restaurant

Question 48

Trade fixtures that are not removed become the real property of the landlord

Answer 48

Accession

Question 49

Trade fixtures differ from other fixtures in the following ways:

Answer 49

1. Fixtures belong to the owner of the real estate, but trade fixtures are usally owned and installed by tenant for the tenant’s use
2. Fixtures are considered a permanent part of a building, but trade fixtures are removable. May be attached to a building so they appear to be fixtures.