Elect7- Prelim Lesson 3
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Questions and Answers

What is the primary focus of legal considerations in appraisal?

  • Market trends in real estate
  • Constitutional guarantees of ownership (correct)
  • Economic value of real property
  • Physical characteristics of land

    • What is Res Nullius in the context of property?

  • Things common to all
  • Things belonging to others
  • Things that cannot be appropriated (correct)
  • Things owned by someone

    • What is the term for things owned by someone or a group of people?

  • Res Communes
  • Res Nullius
  • Res Alienae
  • Res Alicujus (correct)

    • What is the term for things that belong to others?

    <p>Res Alienae</p> Signup and view all the answers

    What are the five unique characteristics of real estate?

    <p>Unique in location, unique in composition, durable, finite in supply, and useful</p> Signup and view all the answers

    What is real estate?

    <p>Land and all improvements permanently attached to the land</p> Signup and view all the answers

    What is real property?

    <p>The interests, benefits, and rights inherent in ownership</p> Signup and view all the answers

    What is the term used to describe professionals involved in the valuation of real estate?

    <p>Real Property Appraisers</p> Signup and view all the answers

    What is the term for the power of the government to take private property for public use?

    <p>Eminent Domain</p> Signup and view all the answers

    What happens to a person's property if they die without a will?

    <p>It is transferred to the state</p> Signup and view all the answers

    What is the primary funding basis for local operations, including schools, in many communities?

    <p>Property taxes</p> Signup and view all the answers

    What type of restriction usually applies to many parcels?

    <p>Zoning restriction</p> Signup and view all the answers

    What is a limitation on the use of real estate through a written legal document?

    <p>Deed restriction</p> Signup and view all the answers

    What is an example of a private restriction on real estate ownership?

    <p>Deed restriction</p> Signup and view all the answers

    What is the term for the transfer of property to the state if the owner dies without a will?

    <p>Escheat</p> Signup and view all the answers

    What can happen to a property if property taxes are not paid?

    <p>The government will acquire it</p> Signup and view all the answers

    What is the primary purpose of a deed restriction in a subdivision?

    <p>To regulate the minimum size and cost of a house</p> Signup and view all the answers

    What is the most unrestricted form of ownership in real estate?

    <p>Fee simple estate</p> Signup and view all the answers

    What type of easement can be conveyed from a seller to a buyer?

    <p>Easement appurtenant</p> Signup and view all the answers

    What is the interest of a landlord in a leased property?

    <p>Leased fee estate</p> Signup and view all the answers

    What is the right of reversion in a lease agreement?

    <p>The right to get the property back at the end of the lease</p> Signup and view all the answers

    What instrument is usually created when part or all of the purchase price of a property is borrowed from a lending institution?

    <p>Mortgage instrument</p> Signup and view all the answers

    What is the interest of a tenant in a leased property?

    <p>Leasehold estate</p> Signup and view all the answers

    What type of easement is typically acquired by a governmental authority to widen an existing highway?

    <p>Temporary easement</p> Signup and view all the answers

    What type of interest is important in urban areas due to height limitations?

    <p>Air rights</p> Signup and view all the answers

    What is the primary purpose of an easement?

    <p>To grant a right to use part of the land for a specific purpose</p> Signup and view all the answers

    What is a characteristic of a leasehold estate?

    <p>The tenant has the right to use and occupy the property</p> Signup and view all the answers

    What is the right to get the property back at the end of the lease?

    <p>Reversion</p> Signup and view all the answers

    What happens to a lease when a property is sold?

    <p>The lease remains in effect</p> Signup and view all the answers

    What is a positive value of a leasehold estate?

    <p>The tenant has an advantage</p> Signup and view all the answers

    What is the primary relationship between a lessor and a lessee in a lease agreement?

    <p>Property owner and tenant</p> Signup and view all the answers

    What type of interest is a subset of a fee simple estate?

    <p>Partial interest</p> Signup and view all the answers

    What limits an individual's exclusive use of their property, even if they own it in fee simple with no mortgage encumbrance?

    <p>Private restrictions placed by the previous owner or developer</p> Signup and view all the answers

    What is the primary purpose of zoning?

    <p>To promote orderly development of land</p> Signup and view all the answers

    What is the term for the process of acquiring private property for public use?

    <p>Condemnation</p> Signup and view all the answers

    What is the purpose of building codes?

    <p>To protect the consumer from inappropriate or faulty construction</p> Signup and view all the answers

    What are the four powers of government that limit the ownership of all real property?

    <p>Police power, eminent domain, taxation, and regulation</p> Signup and view all the answers

    What is the right of government to regulate land use for the public good?

    <p>Police power</p> Signup and view all the answers

    What is an example of a private restriction that may be placed on a property?

    <p>A minimum floor area</p> Signup and view all the answers

    What is the purpose of the requirement to reinforce foundation footings in residential structures?

    <p>To insure the viability of the structure for years to come</p> Signup and view all the answers

    Res nullius are things owned by someone or a group of people.

    <p>False</p> Signup and view all the answers

    Real estate and real property are interchangeable terms.

    <p>False</p> Signup and view all the answers

    The five unique characteristics of real estate include being intangible.

    <p>False</p> Signup and view all the answers

    Real property appraisers are involved in the valuation of real estate.

    <p>True</p> Signup and view all the answers

    Res communes are things that have never been owned.

    <p>False</p> Signup and view all the answers

    Real estate appraisal involves the valuation of personal property.

    <p>False</p> Signup and view all the answers

    The term 'real estate' excludes intangible rights and benefits.

    <p>False</p> Signup and view all the answers

    Res Alicujus are things that belong to others.

    <p>False</p> Signup and view all the answers

    The right to abuse is one of the rights inherent in the ownership of real estate.

    <p>True</p> Signup and view all the answers

    A portable microwave oven is considered real property.

    <p>False</p> Signup and view all the answers

    A fixture is an item that was once real property that has become personal property.

    <p>False</p> Signup and view all the answers

    The right to receive rent is retained by the lessee in a lease arrangement.

    <p>False</p> Signup and view all the answers

    Fee simple is the most restricted form of real estate ownership.

    <p>False</p> Signup and view all the answers

    Easements are a type of personal property.

    <p>False</p> Signup and view all the answers

    A dishwasher is considered a fixture when it is delivered to a construction site.

    <p>False</p> Signup and view all the answers

    The right to occupy a property is retained by the lessor in a lease arrangement.

    <p>False</p> Signup and view all the answers

    The right of government to acquire private property for public use is known as police power.

    <p>False</p> Signup and view all the answers

    Building codes are intended to promote orderly development of land.

    <p>False</p> Signup and view all the answers

    Zoning is a type of private restriction on real estate ownership.

    <p>False</p> Signup and view all the answers

    The four powers of government that limit the ownership of all real property are police power, eminent domain, and two others.

    <p>True</p> Signup and view all the answers

    Eminent domain is the process of acquiring private property for public use.

    <p>False</p> Signup and view all the answers

    The requirement to reinforce foundation footings in residential structures is intended to promote orderly development of land.

    <p>False</p> Signup and view all the answers

    Private restrictions on real estate ownership can require a minimum floor area and architectural controls.

    <p>True</p> Signup and view all the answers

    Police power is the right of government to regulate land use for the private good.

    <p>False</p> Signup and view all the answers

    A deed restriction in a subdivision may state that the minimum size of a house must be larger than the minimum size required by zoning.

    <p>True</p> Signup and view all the answers

    An easement conveys ownership of the majority of the rights in the bundle of rights.

    <p>False</p> Signup and view all the answers

    A lease is a contractual agreement between a property owner and a tenant that specifies the use of a property for an unlimited period of time.

    <p>False</p> Signup and view all the answers

    A mortgage instrument is usually created when part or all of the purchase price of a property is borrowed from a lending institution.

    <p>True</p> Signup and view all the answers

    An easement appurtenant can be conveyed from a seller to a buyer, while an easement in gross cannot.

    <p>True</p> Signup and view all the answers

    The right of reversion is the right of the tenant to get the property back at the end of the lease.

    <p>False</p> Signup and view all the answers

    A temporary easement is typically acquired by a governmental authority to widen an existing highway.

    <p>True</p> Signup and view all the answers

    Sales of property usually nullify leases.

    <p>False</p> Signup and view all the answers

    A lien is a type of mortgage.

    <p>False</p> Signup and view all the answers

    An encroachment is a type of trespass on another's land.

    <p>True</p> Signup and view all the answers

    Adverse possession can only be claimed through a court of law.

    <p>False</p> Signup and view all the answers

    A fee simple estate is the most complete form of ownership.

    <p>True</p> Signup and view all the answers

    All mortgages are liens, but all liens are not mortgages.

    <p>True</p> Signup and view all the answers

    Adverse possession can be claimed without the original owner's knowledge.

    <p>True</p> Signup and view all the answers

    An encroachment is a type of lien.

    <p>False</p> Signup and view all the answers

    A fee simple estate is a type of restricted ownership.

    <p>False</p> Signup and view all the answers

    An individual may own a parcel of real estate in ______ simple with no mortgage encumbrance.

    <p>fee</p> Signup and view all the answers

    Police power is the right of government to regulate land use for the public ______.

    <p>good</p> Signup and view all the answers

    Zoning is intended to promote orderly ______ of land.

    <p>development</p> Signup and view all the answers

    Building codes are intended to protect the ______ from inappropriate or faulty construction.

    <p>consumer</p> Signup and view all the answers

    Eminent domain is the right of governments to acquire private property for public ______.

    <p>use</p> Signup and view all the answers

    The process of acquiring private property for public use is called ______.

    <p>condemnation</p> Signup and view all the answers

    The right of government to acquire private property for public use is called ______ domain.

    <p>eminent</p> Signup and view all the answers

    The requirement to reinforce foundation footings may insure the ______ of a residential structure for years to come.

    <p>viability</p> Signup and view all the answers

    The bundle of rights concept suggests that the rights inherent in the ownership of a parcel of real ______ include but are not limited to the following:

    <p>property</p> Signup and view all the answers

    The right to use is also known as ______.

    <p>Jus Utendi</p> Signup and view all the answers

    A fixture is an item that was once ______ property that has become part of the real estate.

    <p>personal</p> Signup and view all the answers

    The purest and most complete form of real estate ownership is ______.

    <p>fee simple</p> Signup and view all the answers

    Personal property is an item that is not ______.

    <p>real property</p> Signup and view all the answers

    The power of _______________ is employed in the construction of highways and airports.

    <p>eminent domain</p> Signup and view all the answers

    The owner of the property retains the right to receive ______ for giving up the use of the property.

    <p>rent</p> Signup and view all the answers

    If a person dies without a will, their property _______________ to the state.

    <p>escheats</p> Signup and view all the answers

    The right to dispose is also known as ______.

    <p>Jus Disponendi</p> Signup and view all the answers

    Governments are granted the right of ___________________, that is, they are allowed to levy taxes on properties.

    <p>taxation</p> Signup and view all the answers

    The bundle of rights can be divided through various instruments including ______, easements, and mortgages.

    <p>leases</p> Signup and view all the answers

    In addition to governmental restrictions, individuals may place private limitations on property, and these restrictions may or may not transfer with the property when it _______________.

    <p>sells</p> Signup and view all the answers

    A ___________________ restriction is a limitation on the use of real estate through a written legal document that is usually recorded.

    <p>deed</p> Signup and view all the answers

    One of the most common ___________________ restrictions is a subdivision restrictive covenant.

    <p>deed</p> Signup and view all the answers

    Governments have the right to acquire properties if ___________________ taxes are not paid.

    <p>property</p> Signup and view all the answers

    _____________________ recognizes the power of eminent domain.

    <p>The Constitution</p> Signup and view all the answers

    A _______________________ is a loan or promissory note that is secured by the real estate.

    <p>mortgage</p> Signup and view all the answers

    A charge against a property in which the property is security for payment of a debt is called a _______________________.

    <p>lien</p> Signup and view all the answers

    If a person utilizes another person’s property openly for an extended period of time, that property may be transferred as to _______________________ through adverse possession.

    <p>ownership</p> Signup and view all the answers

    A subdivision deed restriction may state that the minimum size of a ______ must be 200 square meters.

    <p>house</p> Signup and view all the answers

    Several forms of _______________________ of real property exist, varying from state to state.

    <p>ownership</p> Signup and view all the answers

    An ______ conveys the right to use part of the land for a specific purpose.

    <p>easement</p> Signup and view all the answers

    The most complete form of ownership is a _______________________ estate.

    <p>fee simple</p> Signup and view all the answers

    An _______________________ is a trespass on another’s land.

    <p>encroachment</p> Signup and view all the answers

    A ______ is a contractual agreement between a property owner and a tenant.

    <p>lease</p> Signup and view all the answers

    Adverse possession is a method of acquiring _______________________ through possession.

    <p>ownership</p> Signup and view all the answers

    When real estate is purchased, a ______ instrument is usually created when part or all of the purchase price is borrowed from a lending institution.

    <p>mortgage</p> Signup and view all the answers

    Possession must involve being apparent (open and visible), continuous and uninterrupted for a certain period of time, exclusive, and _______________________ to acquire title through adverse possession.

    <p>claimed</p> Signup and view all the answers

    An ______ that runs with the land and can be conveyed from a seller to a buyer is called an easement appurtenant.

    <p>easement</p> Signup and view all the answers

    A ______ typically does not convey ownership of the majority of the rights in the bundle of rights.

    <p>easement</p> Signup and view all the answers

    The owner usually receives the right to collect ______ from the tenant and also has the right of reversion.

    <p>rent</p> Signup and view all the answers

    An ______ is usually acquired by a governmental authority to widen an existing highway for construction purposes.

    <p>easement</p> Signup and view all the answers

    Match the following types of interests with their definitions:

    <p>Leased Fee Estate = The landlord's interest in a property when there is a lease encumbering the property Leasehold Estate = The tenant's interest in a leased property Air Rights = The right to use the air space above a property Surface/Subsurface Rights = Rights to use the surface or subsurface of a property</p> Signup and view all the answers

    Match the following concepts with their descriptions:

    <p>Fee Simple Estate = The most unrestricted form of ownership in real estate Partial Interest = An interest less than a fee simple interest Leased Fee Estate = A landlord's interest in a property when there is a lease encumbering the property Air Rights = Rights to use the air space above a property</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Reversion = The right to get the property back at the end of the lease Leasehold Estate = The tenant's interest in a leased property Air Rights = Rights to use the air space above a property Surface/Subsurface Rights = Rights to use the surface or subsurface of a property</p> Signup and view all the answers

    Match the following concepts with their characteristics:

    <p>Leased Fee Estate = The landlord retains the right to receive rent in exchange for giving up use of the property Leasehold Estate = The tenant assumes the obligation to pay rent Air Rights = Rights to use the air space above a property are limited by height restrictions Surface/Subsurface Rights = Rights to use the surface or subsurface of a property are important in urban areas</p> Signup and view all the answers

    Match the following types of interests with their importance:

    <p>Air Rights = Important in urban areas due to height limitations Surface/Subsurface Rights = Important in urban areas due to space constraints Leased Fee Estate = Important for landlords who want to receive rent Leasehold Estate = Important for tenants who want to use and occupy the property</p> Signup and view all the answers

    Match the following concepts with their limitations:

    <p>Fee Simple Estate = Limited by the four powers of government Leased Fee Estate = Limited by the lease agreement Leasehold Estate = Limited by the contract rent Air Rights = Limited by height restrictions</p> Signup and view all the answers

    Match the following terms with their relationships:

    <p>Lessor = The landlord who gives up use of the property Lessee = The tenant who assumes the obligation to pay rent Leased Fee Estate = The landlord's interest in a property when there is a lease encumbering the property Leasehold Estate = The tenant's interest in a leased property</p> Signup and view all the answers

    Match the following concepts with their values:

    <p>Leasehold Estate = Can have a positive value if the contract rent is less than the economic rent Leased Fee Estate = Has a value based on the expected rent Air Rights = Has a value based on the use of the air space Surface/Subsurface Rights = Has a value based on the use of the surface or subsurface</p> Signup and view all the answers

    Match the following types of interests with their associated rights:

    <p>Leased Fee Estate = The right to receive rent Leasehold Estate = The right to use and occupy the property Air Rights = The right to use the air space above a property Surface/Subsurface Rights = The right to use the surface or subsurface of a property</p> Signup and view all the answers

    Match the following concepts with their implications:

    <p>Leased Fee Estate = The landlord retains the right to get the property back at the end of the lease Leasehold Estate = The tenant assumes the obligation to pay rent Air Rights = The use of the air space is limited by height restrictions Surface/Subsurface Rights = The use of the surface or subsurface is limited by space constraints</p> Signup and view all the answers

    Study Notes

    • Ownership of real estate is a direct function of constitutional guarantees, and a professional appraiser must understand various legal considerations involved in real property ownership.
    • Property refers to all things which are or may be the object of appropriation.
    • Res nullius refers to physical things that have not been reduced to property because they are not or cannot be appropriated.
    • Res Alicujus refers to things owned by someone, a particular person or group of persons.
    • Res Alienae refers to things belonging to others.
    • Res Communes refers to the property status of a thing while it remains in a wild, unappropriated state.

    Real Estate and Real Property

    • Real estate relates to the land and all improvements permanently attached to the land, either by nature or by people.
    • Real estate has five unique characteristics: unique in location, composition, durable, finite in supply, and useful.
    • Real property relates to the interests, benefits, and rights inherent in the ownership of real estate.

    Public (Government) Restrictions on Real Estate Ownership

    • Governments have four powers that limit the ownership of all real property:
      • Police power: the right to regulate land use for the public good, including zoning and building codes.
      • Eminent domain: the right to acquire private property for public use, such as road widening.
      • Escheat: the right to acquire property if a person dies without a will.
      • Taxation: the right to levy taxes on properties.

    Private Restrictions on Real Estate Ownership

    • Private limitations on property may or may not transfer with the property when it sells.
    • Examples of private restrictions include:
      • Deed restrictions: limitations on the use of real estate through a written legal document.
      • Easements: the right to use part of the land for a specific purpose, such as utility lines or highway construction.
      • Leases: a contractual agreement between a property owner and a tenant, specifying the use of a property for an identified period of time.
      • Mortgages: a debt instrument used to finance the purchase of real estate.

    Partial Interests

    • Any interest less than a fee simple interest is known as a partial interest.
    • Examples of partial interests include:
      • Leased fee estate: a landlord's interest in a property when there is a lease encumbering the property.
      • Leasehold estate: a tenant's interest in a leased property.
      • Air rights: the right to use air space above a property, subject to height limitations.
      • Surface/subsurface rights: the right to use the surface or subsurface of a property, often important in urban areas.
    • Ownership of real estate is a direct function of constitutional guarantees.
    • Six legal considerations:
      • Fundamental definitions of legal interests
      • Limitations on ownership of real estate
      • Forms of legal interests
      • Property ownership forms
      • Four types of legal descriptions
    • Property: All things which are, or may be, the object of appropriation.
    • Res nullius: Things that have not, or have never had, an owner.
    • Res Alicujus: Things owned by someone - a particular person or group of persons.
    • Res Alienae: Things belonging to others.
    • Res Communes: Property status of a thing while it remains in a wild, unappropriated state.

    Real Estate and Real Property

    • Real estate: Land and all improvements permanently attached to the land.
    • Real estate has five unique characteristics:
      • Unique in location
      • Unique in composition
      • Durable
      • Finite in supply
      • Useful
    • Real property: Interests, benefits, and rights inherent in the ownership of real estate.

    Bundle of Rights

    • Rights generally inherent in the ownership of real estate include:
      • The right to use (Jus Utendi)
      • The right to its fruits (Jus Fruendi)
      • The right to dispose (Jus Disponendi)
      • The right to recover (Jus Vindicandi)
      • The right to abuse (Jus Abutendi)
    • The bundle of rights can be divided through various instruments, including leases, easements, and mortgages.

    Limitations on Ownership of Real Estate

    • Even with fee simple, there are limitations on ownership of real estate:
      • Private restrictions
      • Governmental controls
      • Zoning and building codes

    Public (Government) Restrictions on Real Estate Ownership

    • Four public or governmental restrictions:
      • Police power
      • Eminent domain
      • Zoning
      • Building codes

    Easements

    • An easement conveys the right to use part of the land for a specific purpose.
    • Types of easements:
      • Easement appurtenant: Runs with the land and can be conveyed.
      • Easement in gross: Serves only one person and cannot be conveyed.

    Leases

    • A lease is a contractual agreement between a property owner (lessor) and a tenant (lessee).
    • Specifies the use of a property for an identified period of time.
    • The tenant acquires the right to occupy and use a property.

    Mortgages

    • A mortgage is a loan or promissory note secured by the real estate.
    • If the loan is not paid back according to the agreed-upon terms and conditions, the lender can foreclose on the property.

    Liens

    • A charge against a property in which the property is security for payment of a debt.
    • Types of liens:
      • Mortgage
      • Mechanic's lien
      • Condominium association lien

    Encroachments

    • An encroachment is a trespass on another's land.
    • Examples:
      • Fences installed over the property line
      • A house that extends over a property line

    Adverse Possession

    • A method of acquiring ownership through possession.
    • Requirements:
      • Possession must be apparent (open and visible)
      • Possession must be continuous and uninterrupted for a certain period of time
      • Possession must be exclusive
      • Possession must be hostile, with denial or opposition to the original owner

    Real Property Ownership

    • The concept of real property ownership is closely tied to the bundle of rights concept, which suggests that ownership of a parcel of real property includes a set of rights.
    • The bundle of rights can be divided through various instruments, including leases, easements, and mortgages.

    Bundle of Rights

    • The bundle of rights includes the right to use (Jus Utendi), the right to its fruits (Jus Fruendi), the right to dispose (Jus Disponendi), the right to recover (Jus Vindicandi), and the right to abuse (Jus Abutendi).
    • These rights can be divided and transferred to others through various instruments.

    Lease

    • A lease is a contractual agreement between a property owner (lessor) and a tenant (lessee) that specifies the use of a property for an identified period of time.
    • The tenant acquires the right to occupy and use a property, while the owner usually receives the right to collect rent from the tenant and also has the right of reversion.

    Fixture

    • A fixture is an item that was once personal property that has become part of the real estate.
    • Examples of fixtures include light fixtures, stoves, and dishwashers.

    Limitations on Ownership of Real Estate

    • Even with fee simple ownership, there are limitations on the use of real estate, including private restrictions and governmental controls.
    • Private restrictions may include deed restrictions, easements, and leases.
    • Governmental controls may include zoning, building codes, and eminent domain.

    Public (Government) Restrictions on Real Estate Ownership

    • There are four public or governmental restrictions known as the four powers of government: police power, eminent domain, escheat, and taxation.
    • Police power is the right of government to regulate land use for the public good.
    • Eminent domain is the right of government to acquire private property for public use.

    Eminent Domain

    • Eminent domain is the right of government to acquire private property for public use, such as road widening.
    • The process of acquiring private property for public use is called condemnation.
    • Examples of eminent domain include highway construction, parks, governmental building sites, and airport expansion.

    Escheat

    • Escheat means going to the state, and occurs when a person dies without a will and their property transfers to the state.
    • Escheat also refers to the power of government to take possession of property for non-payment of taxes.

    Taxation

    • Governments have the right to levy taxes on properties.
    • Property taxes are the primary funding basis for local operations, including schools.
    • If property taxes are not paid, governments have the right to acquire the properties.

    Private Restrictions on Real Estate Ownership

    • Private restrictions may include deed restrictions, easements, and leases.
    • Deed restrictions are limitations on the use of real estate through a written legal document that is usually recorded.
    • Easements convey the right to use part of the land for a specific purpose, and may be granted to utility companies or governmental authorities.

    Liens

    • A lien is a charge against a property that is security for payment of a debt.
    • There are many forms of liens, including mortgages, mechanic's liens, and condominium association liens.

    Encroachment

    • An encroachment is a trespass on another's land, such as a fence or a house that extends over the property line.
    • The person doing the encroaching can be forced to remove the encroachment or pay damages.

    Adverse Possession

    • Adverse possession is a method of acquiring ownership through possession.
    • To acquire title through adverse possession, possession must be apparent, continuous, exclusive, and hostile, and must be claimed for a certain period of time.
    • There are several forms of ownership of real property, including fee simple estate, which is the most complete form of ownership.
    • Appraisers must have a clear understanding of the ownership interest being appraised.
    • Ownership of real estate is a direct function of constitutional guarantees.
    • Property: all things which are, or may be the object of appropriation.
    • Res nullius: things that have not been reduced to "property" because they are not, or cannot be, appropriated.
    • Res Alicujus: things owned by someone - a particular person or group of persons.
    • Res Alienae: things belonging to others.
    • Res Communes: the property status of a thing while it remains in a wild, unappropriated state, or a "thing common to all".

    Real Estate and Real Property

    • Real estate: relates to the land and all improvements permanently attached to the land, either by nature or by people.
    • Real estate has five unique characteristics that distinguish it from other asset types:
      • Unique in location
      • Unique in composition
      • Durable
      • Finite in supply
      • Useful
    • Real property: relates to the interests, benefits, and rights inherent in the ownership of real estate.
    • Those involved in the valuation of real estate are technically real property appraisers as opposed to real estate appraisers.

    Bundle of Rights

    • Rights generally inherent in the ownership of real estate include but are not limited to:
      • The right to use (Jus Utendi)
      • The right to its fruits (Jus Fruendi)
      • The right to dispose (Jus Disponendi)
      • The right to recover (Jus Vindicandi)
      • The right to abuse (Jus Abutendi)
    • The bundle of rights can be divided through various instruments, including leases, easements, and mortgages.

    Personal Property and Fixtures

    • Personal property: an item that is not real property.
    • Examples of personal property that may appear to be related to real estate:
      • A portable microwave oven
      • A window air-conditioning unit
      • Furniture
    • Fixture: an item that was once personal property that has become part of the real estate.

    Limitations on Ownership of Real Estate

    • Even though an individual may own a parcel of real estate in fee simple with no mortgage encumbrance, they do not have exclusive use of that property.
    • Private restrictions placed on the property by the previous owner or the developer.
    • Governmental controls.

    Public (Government) Restrictions on Real Estate Ownership

    • Four public or governmental restrictions known as the four powers of government:
      1. Police power: the right of government to regulate land use for the public good.
      2. Eminent domain: the right of governments to acquire private property for public use.
      3. Escheat: the power of the state to take ownership of property if a person dies without a will.
      4. Taxation: the right of governments to levy taxes on properties.

    Private Restrictions on Real Estate Ownership

    • Deed restrictions: limitations on the use of real estate through a written legal document that is usually recorded.
    • Easements: private restrictions that allow others to use one's property.

    Partial Interests

    • Any interest less than a fee simple interest is known as a partial interest.
    • Forms of partial interests:
      • Leased fee estate: a landlord's (lessor's) interest in a property when there is a lease encumbering the property.
      • Leasehold estate: a tenant's (lessee's) interest in a leased property.
      • Air rights: the right to use the space above a property.
      • Surface/subsurface rights: the right to use the surface or subsurface of a property.

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    Description

    This quiz covers the legal aspects of real estate ownership that professional appraisers need to understand, including fundamental definitions, limitations, forms of ownership, and legal descriptions.

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