Real Property vs. Personal Property

Study Notes

Real Property vs. Personal Property

Real property is immovable (land and anything permanently attached to it)
Personal property is movable and includes all property that is not real property.

Ownership Rights

Bundle of Rights: These rights are associated with real property, specifically:
- Possession: The right to occupy and use the property
- Control: The right to manage and make decisions about the property
- Enjoyment: The right to use the property for any legal purpose
- Exclusion: The right to prevent others from using or accessing the property
- Improvement: The right to make changes or improvements to the property
- Encumbrances: The right to place restrictions or limitations on the property (like liens, easements, etc.)
- Sell, lease, and transfer ownership: The right to sell, lease, or transfer ownership of the property to others

Estates in Property

Freehold Estates: Indicate ownership and are generally long-term
- Fee simple absolute: The highest form of ownership, with complete control and unlimited duration.
- Fee simple defeasible: Ownership with conditions, where the ownership can be lost if a specific event occurs.
- Life estate: Ownership is limited to the lifetime of a specific individual.
Less than Freehold (Leases): Indicate temporary possession
- Estate for years: A lease for a specific period of time.
- Periodic tenancy: A lease that automatically renews for a set period (e.g., week to week, month to month).
- Estate at will: A lease that can be terminated by either party at any time.
- Estate at sufferance: A lease where the tenant remains on the property without permission after the lease has expired.

Government Powers

Police Power: The government's authority to regulate property use to protect public health, safety, and welfare.
Eminent Domain: The government's right to take private property for public use. The process of acquiring the property is called condemnation.
Taxation: The government's power to levy taxes on property, typically based on the assessed value.
Escheat: The government's right to claim ownership of property when a person dies without a will or heirs.

Types of Ownership

Concurrent Estates (Ownership with Others):
- Joint tenancy (TTIP): All owners have equal rights, with the right of survivorship (if one joint tenant dies, their share automatically goes to the surviving joint tenant).
- Tenancy by the entirety: A form of joint tenancy specific to married couples, with right of survivorship.
- Tenancy in common: Owners share possession of the property but do not have right of survivorship (ownership passes to the deceased's heirs).
Severalty (Sole Ownership): Single ownership of the property.

Types of Hazards/Hazardous Substances

Lead-based paint: Lead-based paint can be found in houses built before 1978. Sellers must disclose known lead-based paint hazards to buyers and renters (Lead-Based Paint Hazard Reduction Act of 1992).
Asbestos: A mineral used in building materials that can cause respiratory disease.
Radon: A colorless, odorless radioactive gas found naturally in the ground.
Carbon monoxide (CO): A colorless, odorless gas produced by combustion.
Mold: Toxic mold requires moisture to grow and can cause health problems.
Brownfields: Polluted industrial sites due to hazardous substances or contaminants.

Essential Elements of Value (S-T-U-D)

Scarcity: The limited supply of real estate.
Transferability: The ability to sell or transfer ownership of the property.
Utility: The usefulness or function of the property.
Demand: The number of potential buyers or renters interested in the property.

Determine a Fixture (MARIA)

Method: How the item is attached to the property.
Adaptability: Whether the item is an integral part of the house.
Relationship: The relationship between the parties involved (buyer/seller vs. landlord/tenant).
Intention: The intent of the party who attached the item.
Agreement: An agreement between the parties can override the other MARIA rules.

Types of Depreciation

Physical Deterioration: Wear and tear on a property over time.
Functional Obsolescence: Loss of value due to outdated features or design.
Economic Obsolescence: Loss of value due to external factors, such as changes in zoning or neighborhood decline.

Appraisal Methods

Market Data Approach (Sales Comparison Approach): Compares the subject property to similar properties that have recently sold.
Cost Approach: estimates the cost to replace the property, considering depreciation.
Income Approach: estimates the value based on the property's potential income.

Description

Explore the differences between real and personal property, focusing on the various ownership rights associated with real property. This quiz will cover concepts such as the bundle of rights and types of estates in property ownership. Test your understanding of property law fundamentals.