Real Property Rights and Ownership

• Real estate/real property consists of land and anything permanently attached to it.

Bundle of Rights

• Ownership of real estate entails various rights.
• Rights include usage, selling (in whole or part), leasing, bequeathing, and the option to abstain from these.

Fee Simple Estate

• Represents absolute ownership of real property.
• Grants the person unconditional power to dispose of the property during their life.
• The property descends to the person’s heirs or distributees.

Air Rights

• Pertain to the right to use the space above the land's surface.

Riparian Rights

• Apply to property owners whose land borders a natural watercourse (e.g., river).
• Grants the right to reasonable use and enjoyment of the water flowing past.
• Riparian literally means “riverbank”.

Littoral Rights

• Apply to property owners with land bordering a body of water (e.g., lake, ocean).
• Grants the right to reasonable use and enjoyment of the shore and water the property borders.

Chattel

• Encompasses personal property, such as household goods.

Fee Simple Owner Rights

• Pledge the property as security for debt (mortgage).
• Convey the property to another.
• Convey the leasehold to another party.
• Grant an easement.
• Grant a license/permission to conduct activity on the land.

Fee Simple Inclusions

• Includes the land, everything affixed to the land, and items within the house.
• Encompasses fixtures, lights, appliances, and kitchen installations.

Subsurface Rights

• Include minerals, oil/natural gas, and aquifers.
• Ownership of these resources beneath the land.
• The right to sell or lease access to these resources increases property value.

Fixture/Trade Fixture

• Personal property attached to the land or improvements.
• Attachment makes it part of the real property.

Illiquidity

• Property is considered an illiquid asset.
• Cannot be easily sold or exchanged for cash.

Special Purpose Real Estate

• Suitable for one type of use or limited uses.
• Unique design, layout, or special construction materials limit utility.
• Examples: churches, theaters, or schools.

Life Estate

• Conveys title to property for the duration of the grantee's life.

Remainder Interests/Remainderman

• The person receives the property after the prior estate terminates.
• Gains fee simple after the life estate concludes.

Fee Simple Defeasible

• Ownership contingent upon certain conditions.

Leasehold Estate

• Temporary right to hold land or property.
• A lessee or tenant holds rights via a title from a lessor or landlord.

Periodic Estate

• Refers to periodic tenancy, often month-to-month.
• Notice required usually corresponds to the period (e.g., 30 days for a month-to-month tenancy)

Estate at Will

• Lacks a fixed period or term (e.g., a year).
• Continues until parties agree to terminate or one gives notice.

Tenant Protection

• Governments protect tenants from excessive rent increases.
• Laws limit how much landlords can raise rent.

Tenancy in Common

• Ownership by two or more persons with undivided interests.
• No "right of survivorship".

Joint Tenancy

• Equal ownership (e.g., 50/50%).
• Each owner has complete ownership rights.
• Upon death, the deceased's share goes to the other owner, not to their estate.

Tenancy by the Entirety

• Specifically for married couples.
• Upon one partner's death, the property goes to the surviving partner.

Termination of a Joint Tenancy

• Requires a deed change.
• Can occur through partition, a division of real property decided by a judge.

Property Rights

• The 'bundle of rights' (fee simple) is stronger than 'contract rights'.

Trustee

• Holds property, authority, or a position of trust for another's benefit.

Trustor

• Conveys title to a trustee.

Trust

• An arrangement where a trustee holds property for beneficiaries.

Irrevocable Trust

• Banks typically do not lend money to an “irrevocable trust”.
• Involves transferring full title and rights to the trustee.

Revocable Trust

• Banks are more favorable towards a “revocable trust”.
• The owner retains all rights to the property

LLC (Limited Liability Company)

• Primarily used to protect a company’s assets from liability.
• Can be a pass-through tax entity, with profits taxed at the personal level.

C Corp

• Always taxed at 35%.
• Involves double taxation.

Cooperative

• A corporation, not real property.
• Residents receive a stock certificate.
• Banks typically don't grant mortgages on cooperatives since it is not “real property”.
• Comes with limited rights.
• Generally sells for less per square foot.

Condominiums

• Generally sell at a higher price per square foot.
• Comes with full bundle of sticks/rights.

This lesson covers fundamental real property concepts. It explains ownership, usage rights, and transfer of real estate. Topics include fee simple estate, air rights, riparian and littoral rights.