Real Estate Rights and Property Quiz

Chapter 2: Legal Foundations To Value

• Real Property Bundle of Rights: Questions include defining rights, property rights, real property, personal property, and ambiguous cases.

What Are Rights?

• Governmental Enforcement: Rights are claims enforced by the government, stemming from the constitution, and distinct from arbitrary power.
• Non-revocable (but modifiable): Rights are not revocable but can be reduced for public health, safety, and welfare.
• Enduring: Rights are not limited by owners' or government's terms.

Personal Rights vs. Property Rights

• Personal Rights: Basic freedoms guaranteed by the constitution, and interpreted by the supreme court.
• Property Rights: Exclusive possession; use and deriving benefit (rent, harvest); and freedom of disposal (within legal safety limits).

Real vs. Personal Property

• Real Property: Rights in land and permanent structures (surface, air [up to legal limits], subsurface [minerals, oil, gas, water]).
• Personal Property: All other property, including personal and household goods, intellectual property (like music)

Rights in Our Society

• This section illustrates a visual representation of various personal and property rights.

Real Property: Rights in Three Dimensions

• A diagram illustrates the concept of property rights extending in three dimensions (airspace, surface, subsurface).

Fixtures

• Definition: Real property formerly considered personal property.
• Identification Rules: Factors like attachment, adaptation (custom features), and the parties' intentions determine if something is a fixture.
• Specific Examples: Custom features (screens, windows, pews, designed furniture) can convert personal to real property.
• Intentions: The parties' intention plays a significant role—customary practices and relative roles (tenant, homeowner) impact classification.

Which Are Fixtures?

• This section includes visual examples to apply the fixture concepts.

Importance of Fixtures

• Automatic Transfer: Fixtures automatically transfer ownership with the property.
• Identification Crucial: Accurate identification of potential fixtures is essential.
• Explicit Statement Needed: Fixtures' inclusion or exclusion should be explicitly stated in transactions.

Real Property Interests

• Interest: Any rights bundle in real property.
• Estate: Includes possession rights.
• Non-possessory Interests: Examples include easements, restrictive covenants, and liens.

Estates

• Different types of ownership, including their inheritance and duration characteristics, like fee simple absolute, fee simple conditional, life estate, legal life estate, and different leasehold estates.

Estates of Indefinite Length

• Types of ownership (fee simple absolute, fee conditional, life, legal) are defined, with emphasis on how they're defined and their importance in real ownership concerns.
• Emphasis is on how homestead rules differ in states and impact the survivorship of the property's right.

Modern Leasehold Interests

• Characteristics and types of leasehold arrangements, including tenancy for years, periodic tenancy, and laws governing terminations.
• Provides context and relevance for contemporary housing circumstances.

Model Residential Landlord-Tenant Act

• This act aims for fairness between landlords and tenants.

Nonpossessory Interests in Land

• Overview of easements, liens, and restrictive covenants.

Easements

• Definition: The right to use land for a specific purpose.
• Appurtenant: Rights tied to adjoining properties (affirmative examples: access, utilities; negative: light, air).
• In Gross: Rights not tied to a particular parcel (commercial easements, e.g., utility lines, easements for billboard placement).

More Easement Concepts

• Exclusive/Nonexclusive: Whether access can be shared; the distinction is important for property rights.
• License: Similar to easement but is revocable.

How Many Easements in This Scene?

• Illustrates an example map of property rights and easements.

Rights Included in Various Real Property Interests

• A table summarizes which rights apply to different property interests (freehold, leasehold, easement).

Restrictive Covenants (Deed Restrictions)

• Definition: Covenants restricting land use in deeds.
• Creation: Can be in a deed conveying the land, or by restrictions in the subdivision.
• Enforcement: Methods enforced by courts, owners, or others (with potential difficulties in enforcement due to abandonment or changing circumstances).

Restrictive Covenants: Enforcement

• Methods: Injunctions and other legal means of enforcement.
• Parties Involved: The grantor, successors, etc.
• Enforcement Challenges: Abandonment, changes in neighborhood or policy, potentially impacting the conditions enforced.

Liens

• Definition: An interest in property as security for an obligation, usually a debt in a transaction that didn't involve ownership.
• General vs. Specific: Liens (like tax liens) or (like mortgages).
• Examples: Specific liens like mortgages, mechanics', property tax, and assessment liens.

Three Levels of Liens on a Personal Residence

• Illustration of the prioritized order of liens.

Forms of Co-Ownership

• Direct: Common forms include tenancy in common, joint tenancy (with survivorship), and tenancy by the entirety. Direct ownership is usually preferred in most housing concerns.
• Indirect: Ownership is through an entity (co-op, corporation) which holds the property.

Forms of Direct Co-Ownership

• Descriptions of characteristics and different scenarios to understand the various ownership rights and how the ownership structures work.

Forms of Direct Co-Ownership (2)

• Detailed explanation regarding ownership forms with inheritance implications.

Direct Co-Ownership: Condominiums

• Characteristics and types of co-owned housing, which combines elements of single ownership and common ownership.

Why Would You Want a Condo?

• Positives of condo ownership, like price, amenities, security, and maintenance.

What Special Risks Do You Buy Into?

• Potential risks associated with condo living (e.g., design, rules, management, reputation).

Condo Documents You Want to Examine

• Important documents for evaluating condo living.

Cooperative

• Detailed descriptions and characteristics of cooperative ownership.

Automatic Ownership from Marriage: Early Forms

• Characteristics of dower and curtesy (historical forms of automatic property transmission in marriages).

Automatic Ownership from Marriage: Modern Forms

• Explanations regarding elective share as a modern substitute for the dower system.
• Explanations regarding community property as another model that works differently.

Automatic Ownership from Marriage: Modern Forms (2)

• Detailed information on community property- another way property is managed between spouses in various situations.

Exhibit 2-10 Two Main Forms of Marital Property Rights

• A table comparing elective share and community property systems' characteristics in various states.

Timeshare

• Characteristics and potential concerns of timeshare ownership.

Issues in Rights to Water

• Overview of questions about water rights and property ownership.

Rights to Oil, Gas, and Minerals

• Overview of ownership of substances— oil, gas and minerals— that are in the ground and their management between parties.

Summing Up

• Review of the concepts of real and personal property, the bundle of rights, and the various ownership structures.

More Summing Up

• Review of various concepts; different types of co-ownership, and concepts of how property interests are passed between married partners.