Unit 3: Interests in Real Estate Flashcards
Estate in Land
the degree, quantity, nature, and extent of an owner’s interest in real property
To be an Estate in Land
an interest must allow possession, meaning the holding and enjoyment of the property either now or in the future, and be measured over time
Freehold estate
lasts for an inderterminable length of time, such as for lifetime or forever
Fee simple (absolute)
the highest interest in real estate recognized by law
Upon the death of the owner of a fee simple estate, the property interest passes to…
- the decedent’s co-owner, if there is one and the co-ownership was accompanied by a right of surviorship
- the person or persons specified in the decendent’s will (the devisees)
- If the decendent has left no will, to the persos(s) designated by the state’s law of interstate sucession
Fee simple defeasible
qualified fee estate that is subject to the occurence or nonoccurence of some specified event
fee simple determinable
a fee simple defeasible estate that may be inherited
possibility of reverter
an interest that can be transferred to somone else
If the possibility of reverter limitation is violated, the holder receives the title automatically
True
The language used to distinguish a special limitation______ is the key to create a special limitation
words such as ‘so long as’ or ‘while’ or ‘during’
When an owner gives land to a church, ‘so long as’ the land is used for only religious purposes, is known as?
fee simple determinable
Fee simple subject to a condition subsequent
an owner gives real estate ‘on condition of’ ownership, which means there is a difference in the way the estate will terminate if there is a violation of the condition.
The owner has the right to reentry but must bring legal action in court to assert this right.
Land given ‘on the condition’ that there be no alcohol consumption on the premise is..
A fee simple subject to a condition subsequent
The possibility of reverter (fee simple determinable) or right of entry (fee simple subject to a condition subsequent) is a right considered a ______ .
future interest
Life estate
a freehold estate limited in duration to either the life of the holder of the estate or the life of some other designated person or persons. Not inheritable and passes on accorinding to provisions
life tenant
entitled to the rights of ownership and can benefit from both possession and ordinary use, and profits arising from ownership
A life estate pur autre vie (for a life of another)
provides for inheritance of the property right by the life tenent’s heirs, but the right exists only unitl the death of the identified person(s)
A life estate could be granted to a surviving brother by a deceased property owner for the life of the surviving brother’s children
As long as one of the children survives, the life estate is in control of the life tenant or successor
When the life estate ends it is replaced by a
fee simple estate
Remainder interest
The creator of the life estate may name a remainderman as the person to whom the property will pass when the life estate ends
Reversionary Interest
The creator of the life estate may choose not to name a remainderman. Ownership returns to the original owner upon the end of the life estate
Legal life estate
established by state law and becomes effective whencertain events such as a Dower, curtesy, and homestead that are used here in the U.S.
Dower and curtesy provide
a nonowning spouse with a means of support after the death of the owning spouse
Uniform Probate Code (UPC)
gives a surviving spouse the right to an elective share on the death of the other spouse, if the surviving is not satisfied with the decendent’s disposition of the property by will
homestead
legal life estate occupied as the family home
Homestead are
except from certain judgements for debts, such as charge accounts and personal loans, but not a mortgage for the purchase or improvement of the property
- not protected against real estate taxes billed against the property
How does Homestead excemption work?
- after a sale occurs, debts (mortgageg, unpaid taxes, and liens) will be paid
- then the family will receive the amount reserved by excemption
- Last the rest is applied to unsecured debts
Encumbrance
type of interest in real estate that does not rise to the level of the ownership or possession, yet it still gets some degreee of use or control
Liens
a charge against property that provides security for a debt or an obliagation of the property owner.
If the obligation is not repaid, the lien holder is entitled to have the debt satisfied from the proceeds of a forced sale of the debtor’s property
True
Examples of liens against an owner’s real estate
Taxes, mortgages, judgments, and mechanics’ liens
Deed restriction
will run with the land and limits the use of the property by the current owner, as well as future owners to whom the property is subsequently transferred
Covenants, conditions, and restrictions (CC&Rs)
used by a subdivision developer to maintain specific standards in a subdivision, such as by requiring adherence to certain architectural or design specifications for improvements
Easement
the right to use the land of another for a particular purpose
Easement appurtenant
is attached to the ownership of real estate and allows the owner of that property the use of a neighbor’s land
The parcel that benefits from the easement is known as the ______; the parcel over which the easement runs is known as the _____.
dominanttenement; service tenement
If the dominant tenement is conveyed to another party, the easement transfers witht the title
True
party wall
exterior wall that borders the line between two lots, it can also be a partition wall between two properties
cross easement
the reciprocal interest of each owner in the property of the other
Easement in gross
an individual or company interest in or right to use someone else’s land
What are examples of easement in gross?
- A railroad’s right-of-way,
- Right-of-way for utitlities (pipelines and powerlines)
Personal easement in gross terminates on the death of the esement owner
True
Creating an easement
- created by a written agreement between the parties that establishes the easement right
- Easement by Necessity
- Easement by Prescription
Easement by necessity
created when an owner sells a parcel of land that has no legal access to a street or public way except over the seller’s remaining land
Easement by prescription (prescriptive easement)
If the claimant has made use of another’s land for a certain period of time
The use must be visible, open, and notorious, and the owner must be able to learn of it.
(prescription lasts 10-21 years)
Tacking
successive periods of continous occupation by different parties may be combined (tacked) to reach the required total number of years necessary to establish a claim for a prescriptive easement
To tack on person’s posession to that of another, the parties must have successors in interest
true
Easement terminates:
- when the need no longer exists
- when the owner of either the dominant or the servient tenement becomes sole owner of both properties
- by the release of the right of the easement to the owner of the servient tenement
- by the abandonment of the easement (intention)
- by the nonuse of a prescriptive easement
license
a personal privilege to enter the land of another for a specific purpose
ends with the death of either party or sale
A license can be terminated by the property owner
True
Encroachment
when a building, fence, or driveway illegally extend beyond the boundaries of the land of its owner or legal building
An enroachment that exceeds the state’s perscriptive period may give rise to an…
easement by prescription
Lis pendens (Litigation pending)
a notice filed in the public records of a pending legal action affecting the title to or possession of property
Lis pendens create “cloud on the tile” to the property which may…
prevent the property from being solde or further encumbered
If the lis pendens have been recorded w/out adequate evidence a bona fide dispute, the property owner can have the lis pendens_____.
expunged
Government powers include:
Police power, eminent domain, taxation, and escheat (PETE)
Police power
States have the power to enact legislation to preserve order, protect the public health and safety, and promote the general welfare of its citizens.
The police power of gov is used to enact environmental protection laws, zoning ordinances, and building codes
ex: use, max occupacy, size, location, and construction
True
Eminent Domain
the right of the government to acquire privately owned real estate for public use
Condemnation
the process by which the gov exercises the eminent domain right, by either judicial or admin proceedings
Eminent domain examples
a public housing authority might take privately owned land to build low-income housing, or the state’s land-clearance commission or redevelopment authority could allow parcels to be acquired for construction of a new sports arena
Taking of property for public use is found in the 5th Amendment, it reads,
“[N]or shall private property be taken for public use, without just compensation,”
SO MUST COMPENSATE
Due process of law protects the rights of the owner of the property
Found in the 5th and 14th Amendments
Kelo vs. City of New London (June 2005)
The court held that local govs can condemn homes and businesses for economic development purposes, even when a private developer is a beneficary
“public good” > “beneficial public use”
Murr v. Wisconsin (2017)
a property owner could be denied the right to build a second structue on a property that had at one time been two separate parcels, each of which would have been entitled to a building permit, but under same ownership .
Inverse condemnation
an action brought by a property owner seeking just compensation for land adjacent to land used for a public purpose when the property’s use and value have been diminished
A property owner may bring inverse condemnation action to be compensated for the loss in value. EX: new high construction near property
True
Before-after method
The value of the owner’s remaining property after the taking is subtracted (-) from the value of the whole parcel before the taking
Taxation
a charge on real estate to raise funds to finance the operation of governement
Taxes on real estate include:
- annual real property taxes assesed by local and area governmental entities to support school districts, transportation districts, and utility disctricts
- taxes on profit realized by individuals and corporations on the sale of real property
- special fees that may be levied to finance special projects, such as road or utilitity installation
Nonpayment of any of these common real estate taxes may allow the taxing body to enforce its lien rights in the property
True
Escheat
a process by which the state may acquire privately owned real or personal property
State laws provide for ownership to transfer to the state when an owner dies and leaves no heirs and there is no will or living trust instrument that directs how the real esate is distributed
True
