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Real Estate > UNIT 5: Interests in Real Estate > Flashcards

UNIT 5: Interests in Real Estate Flashcards

identify the kinds of limitations on ownership rights that are imposed by governmental action and the form of conveyance of the property, describe the various estates in land and the rights and limitations they convey, explain concepts related to encumbrances and water rights, and distinguish between the various types of governmental powers and how they are exercised.

1
Q

Police Power

A

The government’s right to impose laws, statutes, and ordinances, including zoning ordinances and building codes, to protect the public health, safety, and welfare.

The right of the government to make reasonable rules for the use of land.

  • provides the authority for such things as zoning restrictions, building codes, and safety and health codes
  • NOTE: “police power” does not refer to the authority of the Police Department to enforce laws
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2
Q

Eminent Domain

A

the right of the government to acquire privately owned real estate for public use

The right of the GOVERNMENT to take private property for public use.

Four main features:

  1. Land which is taken must be for public use only or for a use that is in the best interest of the public
  2. Government must first attempt to purchase the property from the owner
  3. If property cannot be purchased, it is then taken through a process called CONDEMNATION.
  4. The government must provide compensation to the owner for the property taken
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3
Q

Condemnation

A

the process by which the government exercises this right, by either judicial or administrative proceedings. When property is taken in this manner, just compensation is to be paid to the owner, and the rights of the property owner are to be protected by due process of law

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4
Q

Taxation

A

Taxation is a charge on real estate to raise funds to meet the needs of a government.

Taxes on real estate include:

  1. annual real estate taxes assessed by local and area governmental entities, including school districts,
  2. taxes on income realized by individuals and corporations on the sale of property, and
  3. special fees that may be levied for special projects.

Nonpayment of taxes may give government the power to claim an interest in the property.

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5
Q

Escheat

A

The reversion of property to the state or county, as provided by state law, in cases where a decedent dies intestate without heirs capable of inheriting, or when the property is abandoned.

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6
Q

Estate in Land

A

The degree, quantity, nature, and extent of interest that a person has 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 must be measured according to time.

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7
Q

Freehold Estate

A

An estate in land in which:

  • An “ownership” interest in land which is held for a lifetime or longer.
  • It entitles the holder to both OWNERSHIP and POSSESSION.
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8
Q

Fee Simple

A

The maximum possible estate or right of ownership of real property, continuing forever; also known as fee simple absolute.

  • FREEHOLD ESTATE
    • FEE ESTATE
      • FEE SIMPLE ESTATE

The highest interest in real estate recognized by law with the largest, most complete bundle of rights one can hold in property.

  • (Most common typ of estate in real property)

Three primary characteristics of FEE SIMPLE ESTATES:

  1. least restricted form of ownership
  2. limited on by the government’s rights of (eminent domain, taxation, police power, and escheat)
  3. It is an INDEFEASIBLE ESTATE–cannot be defeated (overcome) by another individual against the owner’s will under any circumstances
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9
Q

Defeasible Fee Estate

A

An estate in which the holder has a fee simple title that may be divested upon the occurrence or nonoccurrence of a specified event. There are two categories of defeasible fee estates:

  1. fee simple on condition precedent (fee simple determinable) and
  2. fee simple on condition subsequent.
  • FREEHOLD ESTATE
    • FEE ESTATE
      • QUALIFIED FEE ESTATE

Three primary characteristics of a QUALIFIED FEE ESTATE:

  1. More restricted form of ownership than fee simple
  2. Restricted by limitations imposed by created of QFE, in addition to the governments rights
  3. It is DEFEASIBLE, can be defeated (overcome) if some condition is not met or maintained

Sometimes referred to as DEFEASIBLE FEE ESTATES.

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10
Q

Fee Simple Determinable

A

A fee simple estate qualified by a special limitation; language used to describe limitation includes the words so long as, while, or during.

A type of FEE ESTATE in land that will terminate if a condition stated in the deed comes into being or is terminated:

  • It is essentialy a FEE SIMPLE ESTATE qualified by a special limitation or the happening of a certain event
  • Language used to describe lmitation includes the words “so long as” or “while” or “during”

Ex: Mrs. Smith donates a parcel of land to the city for “so long as” it is used as a public park.

  • If the city uses the land as a park, it retains all the rights of ownership, subject to the four rights of government
  • If the city uses it for something other than a park, ownership reverts back to Mrs. Smith
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11
Q

Fee Simple Estate Subject to a Subsequent Condition

A

If an estate is no longer used for the purpose conveyed, it reverts to the original grantor by the right of reentry, but the grantor must go through the court to assert this right.

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12
Q

Future Interest

A

A person’s present right to an interest in real property that will not result in possession or enjoyment until sometime in the future, such as a reversion or right of reentry.

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13
Q

Life Estate

A

An interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons.

A type of FREEHOLD ESTATE that:

  • is held for a LIFETIME (but not longer)
  • Is NOT inheritable (cannot be will to heirs)

A LIFE ESTATE originates from a FEE ESTATE and returns to “fee status” upon termination.

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14
Q

Encumbrance

A

Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.

An encumbrance is a:

  1. claim,
  2. charge, or
  3. liability

that attaches to real estate.

An encumbrance may decrease the value or obstruct the use of the property.

In essence, an encumbrance is a right or an interest held by someone other than the property owner that affects title to the real estate but does not necessarily prevent a transfer of title.

Encumbrances may be divided into two general classifications:

  • Liens—usually monetary charges
  • Encumbrances—restrictions, easements, and encroachments that affect the physical condition of the property
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15
Q

Pur Autre Vie

A

French for “for the life of another.” A life estate pur autre vie is a life estate that is measured by the life of a person other than the grantee.

A special type of LIFE ESTATE that is based on the lifetime of a third party.

  • “pur autre vie” means “for another’s life”

It is the only type of LIFE ESTATE that is INHERITABLE

  • It is INHERITABLE only if the the “life tenant” dies before the third party on whose life the estate is based.
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16
Q

Lien

A

A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale.

A lien is a charge against property that provides security for a debt or obligation of the property owner.

If the obligation is not repaid, the lienholder is entitled to have the debt satisfied from the proceeds of a court-ordered or forced sale of the debtor’s property.

Real estate taxes, mortgages and trust deeds, judgments, and mechanics’ liens all represent possible liens against an owner’s real estate.

17
Q

Deed Restrictions

A

A clause in a deed limiting the future use of the property.

Deed restrictions may impose a vast variety of limitations and conditions—for example, they may limit the density of buildings, dictate the types of structures that can be erected, or prevent buildings from being used for specific purposes or even from being used at all.

18
Q

Easement

A
  • A right to use the land of another for a specific purpose*, such as for a right-of-way or utilities; an incorpo­real interest in land.
  • Holder of an easement does not have any “ownership” in the property, or even “possession” of the property, only the “use” of the property for a specific purpose.
19
Q

Easement Appurtenance

A

An EASEMENT that burdens one parcel of land (servient estate) for the benefit of another parcel (dominant estate):

  • the easment is the legal right of the owner of the dominant estate to use the property of the servient estate
  • Typically granted by owner of the servient estate
  • Remains PERMANENTLY ATTACHED to the dominant estate for use by whoever owns the dominant estate.
20
Q

Party Wall

A

A wall that is located on or at a boundary line between two adjoining parcels of land and is used or is intended to be used by the owners of both properties.

21
Q

Easement in Gross

A

A type of EASEMENT that involves only 1 property, the SERVIENT ESTATE, there is no dominant estate.

  • The holder of the EIG has the right to use part of the SERVIENT ESTATE for a specific purpose

For example:

  • telephone lines, sewer lines, gas lines, power lines, and ditch easements for storm runoff
    • These are all examples of COMMERCIAL EASEMENT
22
Q

Easement by Necessity

A

An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over a grantor’s land.

23
Q

Easement by Prescription

A

An easement acquired by continuous, open, and hostile use of the property for the period of time prescribed by state law.

24
Q

Easement by Condemnation

A

An easement created by the government or governmental agency that has exercised its right under eminent domain.

25
Q

Terminating an Easement

A
  • when the need no longer exists;
  • when the owner of either the dominant or the servient tenement becomes the owner of both and the properties are merged under one legal description (also known as termination by merger);
  • by release of the right of easement to the owner of the servient tenement;
  • by abandonment of the easement (the intention of the parties is the determining factor);
  • by nonuse of a prescriptive easement;
  • by adverse possession by the owner of the servient tenement;
  • by destruction of the servient tenement (for instance, the demolition of a party wall);
  • by lawsuit (an action to quiet title) against someone claiming an easement; or
  • by excessive use, as when a residential use is converted to commercial purposes.
26
Q

Encroachment

A

When all or part of an improvement—a wall or a fence, for instance— illegally extends beyond the land of its owner or beyond the legal building lines.

27
Q

Riparian Rights

A
  • occur when land adjoins a river, stream or other flowing body of water.
    • The owner has the unrestricted right to use the water, provided they do not interrupt or alter the flow of the water or contaminate it in any way
    • The boundary of the property carrying riparian rights depends on whether the river or stream is navigable or not.
      • If it is navigable, the landowner’s property ends at the waters edge.
      • If it is NOT navigable, the land owner’s property ends at the middle of the watercourse.
    • DOCTRINE OF PRIOR APPROPRIATION limits the riparian rights of an owner in some states.
      • It states that the first owner to divert water for his/her own use may continue to do so, even if it is not fair to other owners along the watercourse.
28
Q

Littoral Rights

A
  • occur when land borders commerically navigable lakes, seas, or oceans
    • unrestricted use of the available waters
    • own land adjacent to the water only up to mean high water mark
    • Littoral rights are attached to the land and cannot be retained when property is sold
      • right to use the water belongs to whoever owns the bordering land
29
Q

Accretion

A

The increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake, or sea.

30
Q

Erosion

A

The gradual wearing away of land by water, wind, and general weather conditions; the diminishing of property caused by the elements.

31
Q

Doctrine of Prior Appropriation

A

Occurs in states where water is scarce

The STATE, rather than the adjacent landowner, controls the right to use any water with the exception of limited domestic use.

To secure water rights, a landowner must demonstrate to a state agency that the owner’s plans are for beneficial use, such as crop irrigation.

If the states requirements are met, the landowner receives permit to use a specified amount of water for the limited purpose of the beneficial use.

Priority of the water right is usually determined by the oldest recorded permit date.

These rights attach to the land of the permit holder. These rights can be sold to another but all rights of way over the land of another must be attained by easement from property owner

Real Estate (12 decks)

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