BLaw Chapter 48

Marketable Title to Real Property

A grantor has the obligation to transfer marketable title, or good title, to the grantee. Marketable title means that the title is free from any encumbrances, defects of title, or other defects that are not disclosed but would affect the value of the property. The three common ways of best ensuring marketable title and protecting against losses caused by defects in title are (1) by purchasing title insurance, (2) by obtaining an attorney's opinion, and (3) by obtaining a certificate of title pursuant to a Torrens system. These three methods are discussed in the following paragraphs. Title Insurance The most effective and most often used way for a purchaser of real property to best be assured that they are acquiring marketable title to the property is to purchase title insurance from an insurance company. The title insurer does a thorough investigation of the property's title before issuing a title insurance policy. Lenders can buy title insurance for real property that is used as collateral for a loan that the bank makes. If the insured property increases in value, it is advisable to increase the amount of title insurance on the property. Each time a property is transferred or refinanced, a new title insurance policy should be obtained by the new buyer or collateral lender. Prior title insurance policies do not carry over to new buyers or lenders. The title insurer must reimburse the insured for any losses caused by discovered defects in title that occurred prior to the purchase of the title insurance. Title insurance is the most common method for best ensuring marketable title and protecting against claims that cause a defect in the title to real property. Title insurance is available in most states. Example Kofi sells a piece of real estate to Nadia. Five years later, Nadia sells the real property to Louis, using a general warranty deed to transfer ownership. Louis purchases title insurance. Subsequently, a legitimate claim is asserted against the property that arose during the period when Kofi possessed the property, which causes a defect in the title of the property. Louis losses the property in a quiet title action brought by the claimant. The title insurance company must pay Louis for his monetary loss. Attorney's Opinion An attorney examines an abstract of title, which is a chronological history of the chain of title affecting the property, including recorded documents and public records relating prior ownership of the property, encumbrances, recorded easements, public claims of adverse possession, and other information affecting title to the property in the past. An attorney's opinion discloses only defects that are apparent from public records. If the attorney determines that clear title exists, he or she will render an attorney's opinion stating that the title to the property is clear as of the date of the opinion. If the opinion states that there are no defects to the title that appear in the public, but a defect later arises that could have been discovered in the public records, the attorney is liable for negligence and must pay for any losses incurred by the party who employed the attorney to render an opinion. Although an attorney's opinion discloses only defects that are apparent from public records, title insurance provides protection from defects that may occur in public records and also defects that do not appear in public records. Generally, title insurance provides greater title protection title defects than an attorney's opinion. Certificate of Title Several states recognize the Torrens system as a method of determining title to real property. Under this system, a person claiming ownership of land goes to a land court to register ownership. A judicial proceeding is held, at which others claiming an interest in the property can appear. After the evidence is heard, the court issues a certificate of title to the person who is determined to be the rightful owner. Mortgages, liens, or other interests in the land are listed on the certificate of title. The cost of registering the land funds an insurance pool that compensates parties whose interests in the land are omitted from certificates of title in error. Quiet Title Action A party who is concerned about his or her ownership rights in a parcel of real property can bring a quiet title action, which is a lawsuit to have a court determine the extent of those rights. Public notice of the hearing must be given so that anyone claiming an interest in the property can appear and be heard. After the hearing, the judge declares who has title to the property; that is, the court "quiets title" by its decision.

Easements

A person can own a nonpossessory interest in another's real estate. Three nonpossessory interests—easement, license, and profit—are discussed in the following paragraphs. The most prominent nonpossessory interest is an easement. An easement is an interest in land that gives the holder the right to make limited use of another's property without owning or leasing it. Express Easements Many easements are purposely granted by a landowner to another party. These are called express easements. Express easements are created by words and must be in writing. Express easements include: (1) easement appurtenant, (2) easement in gross, (3) easement by reservation, and (4) negative easement. These four express easements are discussed in the following paragraphs. --> Easement Appurtenant. An easement appurtenant is an easement by grant that is expressly created when the owner of one piece of real property purposefully grants an easement to the owner of an adjacent piece of real property to use the first piece of property in some specified way. The land over which the easement is granted is called the servient estate. The land that benefits from the easement is called the dominant estate. An appurtenant easement runs with the land. If an owner sells the servient estate, the buyer who purchases the property cannot terminate the easement. If an owner sells the dominant estate, the new owner acquires the benefit of the easement. Example Two owners own adjacent pieces of real property. One owner grants the other owner the right to use a road that runs across her piece of property so that the owner of the other piece of property can more easily access his property. This is an easement appurtenant. The property upon which the easement runs is the servient estate, and the property that benefits from the easement is the dominant estate. --> Easement in Gross. An easement in gross is an easement by grant that expressly authorizes a person who does not own adjacent real property the right to use the other party's nonadjacent real property in some specified way. An easement in gross is personal to the party who receives the benefit of the easement. There is no benefitted parcel of land. An easement in gross does not go with the land if the land is transferred. An easement in gross terminates if the owner of the land over which the easement is located or the holder of the easement transfers their property by sale, inheritance, or other means, or if either party to the easement dies. Commercial easements in gross, such as those held by utilities to run power, telephone, and cable television lines across a property, do transfer with the property. Example Ru Shi owns a piece of lakefront real estate that has a very nice beach. Edsel owns a piece of non-lakefront property several blocks from Ru Shi's property. Ru Shi grants Edsel the right to walk on a long path on her property to reach the beach. This is an easement in gross. If Ru Shi sells the property, Edsel's easement terminates. ---> Easement by Reservation. An easement by reservation is an express easement that is created when an owner sells real property that he or she owns to another party but expressly reserves an easement on the sold property. Example A landowner owns a large parcel of land and decides to sell half of the land to another party. In the land transfer, the selling landowner expressly reserves the right to use a road that runs across the property that he is selling. This is an easement by reservation. ---> Negative Easement. A negative easement is an express easement whereby the owner of real property makes a promise to another owner of real property that he or she will not do something with or on his or her real property. The party who is granted a benefit by a negative easement usually pays the owner of the real property that is impacted by the easement. Example The owner of a piece of property promises not to build a structure that would block his neighbor's view. Implied Easements Some easements are not expressly provided for but are implied from the situation and circumstances. These are called implied easements. Implied easements include: (1) easement by necessity, (2) easement by implication, and (3) easement by prescription. These three implied easements are discussed in the following paragraphs. ---> Easement by Necessity. An easement by necessity is an implied easement that is created if two parcels of real property are so situated that an easement over one parcel is strictly necessary for the use and enjoyment of the other parcel. An easement by necessity is granted if there is no possible alternative way for a party to access their real property except by the creation of the easement. Example A parcel of land is "landlocked" and does not have ingress or egress to a public road. The courts will grant an implied easement by necessity across the adjoining piece of property to allow the owner of the landlocked property to reach and make use of his property. ---> Easement by Implication. An easement by implication is an implied easement that is created when an owner subdivides a parcel of real property that has a beneficial appurtenant (e.g., a road or path) on it that serves the entire parcel, and the purchasers of the subdivided pieces of property automatically acquire an easement to use the beneficial appurtenant. Example A landowner subdivides a large piece of property into four pieces of property and sells them to different purchasers. A water well, which is the only source of water for the properties, is located on one of the subdivided parcels. An easement by implication will be granted to the owners of the other three subdivided lots so that they will have access to the water of the well. ---> Easement by Prescription. An easement by prescription is an implied easement whereby one party obtains the right to use a portion of another party's real property when the requirements for adverse possession are met. Thus, the use of another person's real property upon which an easement by prescription is created must have been open, visible, and notorious; must have been hostile and adverse; must have been actual and exclusive; must have been continuous and peaceful; and must have occurred for the statutory prescribed period of time. Example There are two large parcels of property located in a rural area. The owner of one parcel, on which there is a farm and farm house, has been using a long dirt road that runs across the other parcel, which is vacant undeveloped land, without that owner's knowledge or permission for longer than the statutory prescribed period of time for adverse possession. The farm owner has obtained an easement by prescription to continue using the dirt road even after his use is discovered by the owner of the vacant land. License A license of real property grants a person the right to enter another's property for a specified and usually short period of time. The person granting the license is called the licensor; the person receiving the license is called the licensee. Examples A ticket to a movie theater or sporting event that grants the holder the right to enter the premises for the performance is a common license. A license does not transfer any interest in the property. A license is a personal privilege that may be revoked by the licensor at any time. Profit-à-Prendre A profit-à-prendre (or profit) gives the holder the right to remove something from another's real property. Examples The holder may remove gravel, minerals, grain, or timber from another person's property.

Future Interests

A person may be given the right to possess property in the future rather than in the present. This right is called a future interest. The two forms of future interests are reversion and remainder. Reversion A reversion is a right of possession that returns to the grantor after the expiration of a limited or contingent estate. Reversions do not have to be expressly stated because they arise automatically by law. Example Gautam, an owner of real property, conveys his property "to Harriet Lawson for life." The grantor, Gautam, has retained a reversion in the property. That is, when Harriet dies, the property reverts to Gautam or, if he is not living, to his estate. Remainder If the right of possession returns to a third party on the expiration of a limited or contingent estate, it is called a remainder. The person who is entitled to the future interest is called a remainder beneficiary. Example Janice, an owner of real property, conveys her property "to Joe Jackson for life, remainder to Meredith Smith." This creates a vested remainder, with Meredith being the remainder beneficiary. The only contingency to Meredith's possessory interest is Joe's death. When Joe dies, Meredith obtains ownership of the property, or if she is not living, it goes to her estate.

Freehold Estates in Land

A person's ownership right in real property is called an estate in land (or estate). An estate is defined as the bundle of legal rights that the owner has to possess, use, and enjoy the property. The type of estate that an owner possesses is determined from the deed, will, or other document that transferred the ownership rights to him or her. A freehold estate is an estate in which the owner has a present possessory interest in the real property; that is, the owner may use and enjoy the property as he or she sees fit, subject to applicable government regulation or private restraint. There are three types of freehold estates: fee simple absolute (or fee simple), fee simple defeasible (or qualified fee), and life estate. These are discussed in the following paragraphs. Fee Simple Absolute (or Fee Simple) A fee simple absolute (or fee simple) is an estate in fee that is the highest form of ownership of real property because it grants the owner the fullest bundle of legal rights that a person can hold in real property. It is the type of ownership most people connect with "owning" real property. A fee simple owner has the right to possess and use the property exclusively, to the extent that the owner has not transferred any interest in the property (e.g., by lease). If a person owns real property in fee simple, that ownership is characterized as follows: - It is infinite in duration (fee) - It has no limitation on inheritability (simple) - It does not end on the occurrence of any event (absolute) Example Malai owns a fee simple absolute (or fee simple) in a piece of real property. This means that there are no limitations on her ownership rights. Malai owns this property while she is alive, with no conditions on her ownership rights, and she can transfer the property by will to a named beneficiary or beneficiaries when she dies. Fee Simple Defeasible (or Qualified Fee) A fee simple defeasible (or qualified fee) grants the owner all the rights of a fee simple absolute except that ownership may be taken away if a specified condition occurs or does not occur. Example A conveyance of property to a church "as long as the land is used as a church or for church purposes" creates a qualified fee. The church has all the rights of a fee simple absolute owner except that its ownership rights are terminated if the property is no longer used for church purposes. Life Estate A life estate is an interest in real property that lasts for the life of a specified person, usually the grantee. The person who is given a life estate is called the life tenant. For example, an owner of real estate who makes a conveyance of real property "to Anna for her life" creates a life estate. Anna is the life tenant. A life estate may also be measured by the life of a third party, which is called estate pur autre vie (e.g., "To Anna for the life of Benjamin"). A life estate may be defeasible (e.g., "To Jalil for his life but only if he continues to occupy this residence"). On the death of the named person, the life estate terminates, and the property reverts to the grantor or the grantor's estate or to another designated person. A life tenant is treated as the owner of the property during the duration of the life estate. The life tenant has the right to possess and use the property except to the extent that it would cause permanent waste of the property.

Adverse Possession

In most states, a person who wrongfully possesses someone else's real property obtains title to that property if certain statutory requirements are met. This is called adverse possession. Property owned by federal, state, and local governments is not subject to adverse possession. Under the doctrine of adverse possession, the transfer of the property is involuntary and does not require the delivery of a deed. To obtain title under adverse possession, most states require that the wrongful possession must be: - For a statutorily prescribed period of time. The statutorily prescribed period of time varies from state to state but is usually between 5 and 20 years. - Open, visible, and notorious. The adverse possessor must occupy the property so as to put the owner on notice of the possession. - Actual and exclusive. The adverse possessor must physically occupy the premises. The planting of crops, grazing of animals, or building of a structure on the land constitutes physical occupancy. - Continuous and peaceful. The occupancy must be continuous and uninterrupted for the required statutory period. Any break in normal occupancy terminates the adverse possession. This means that the adverse possessor may leave the property to go to work, to the store, on a vacation, and such. The adverse possessor cannot take the property by force from an owner. - Hostile and adverse. The possessor must occupy the property without the express or implied permission of the owner. Thus, a lessee cannot claim title to property under adverse possession. If the elements of adverse possession are met, the adverse possessor acquires clear title to the land. However, title is acquired only as to the property actually possessed and occupied during the statutory period, and not to the entire tract. Example An adverse possessor who occupies one acre of a 50-acre parcel of property for the statutory period of time and meets the other elements for adverse possession acquires title only to the one acre. Some states require that the adverse possessor have paid taxes on the claimed property during the statutorily prescribed period of time to acquire real property by adverse possession. Some real estate organizations have lobbied to eliminate the doctrine of adverse possession. The best protection against losing property to an adverse possessor is for a landowner to check his or her property for adverse possessors. A landowner should have legal lots lines surveyed and staked so they know the bounds of their property and therefore can easily determine if any party is encroaching over the legal lot line. Owners of vacant property should periodically visit and check their property to make sure no one is squatting on or using the vacant property. If an encroachment is found, the landowner should take whatever legal action is necessary, including filing a quiet title action, to evict the encroaching party and clear title to the property.

Zoning

Most counties and municipalities have enacted zoning ordinances to regulate land use. Zoning generally (1) establishes land use districts within the municipality (i.e., areas are generally designated residential, commercial, or industrial); (2) restricts the height, size, and location of buildings on a building site; and (3) establishes aesthetic requirements or limitations for the exterior of buildings. Example If a zoning ordinance designates an area as zoned for only single-family houses, no apartment buildings, commercial buildings, or other nonconforming structures can be built in this zoned area. If a zoning ordinance states that only apartment buildings up to four stories high can be built in a certain multifamily zoned area, buildings taller than four stories cannot be built in this area. Example A landowner in an area zoned for traditional-style homes applies to build a geodesic dome made of glass and steel in this area. The zoning commission can rightfully turn down a building permit for this proposed house if it does not meet the aesthetic requirements established for the area. A zoning commission usually formulates zoning ordinances, conducts public hearings, and makes recommendations to the city council, which must vote to enact an ordinance. Once a zoning ordinance is enacted, the zoning commission enforces it. If landowners believe that a zoning ordinance is illegal or that it has been unlawfully applied to them or their property, they may institute a court proceeding, seeking judicial review of the ordinance or its application. An owner who wants to use his or her property for a use different from that permitted under a current zoning ordinance may seek relief from the ordinance by obtaining a variance. To obtain a variance, the landowner must prove that the ordinance causes an undue hardship by preventing him or her from making a reasonable return on the land as zoned. Variances are usually difficult to obtain. Zoning laws act prospectively; that is, uses and buildings that already exist in the zoned area are permitted to continue even though they do not fit within new zoning ordinances. Such uses are called nonconforming uses. For example, if a new zoning ordinance making an area a residential zone is enacted, an existing funeral parlor is a nonconforming use.

Liability of Landowners

Owners and renters of real property may, under certain circumstances, be held liable to visitors who are injured on their property. This is called premises liability. A landowner's or tenant's liability generally depends on the status of the visitor. Visitors fall into one of three categories: invitee, licensee, or trespasser. Invitee An invitee is a person who has been expressly or impliedly invited to a landowner's or tenant's premises for the economic benefit of the landowner or tenant (e.g., diners at a restaurant, clients at an office, guests at a hotel, contractors working on your home's roof). A landowner or tenant owes a duty of ordinary care to invitees to make the premises safe from, or to warn of, dangerous conditions that pose an unreasonable risk of which the landowner or tenant has actual or constructive knowledge. A landowner or tenant is liable if he or she breaches this duty and the dangerous condition causes injury to an invitee. Example A shopper enters a grocery store and slips on a grape on the floor and falls and injures himself. If the grape had only been on the floor for five minutes, the store is most likely not liable because this was not sufficient time for the store to have constructive notice that the grape was on the floor. However, if employees knew the grape was on the floor and did not pick it up, the store is liable. If the store did not have actual knowledge that the grape was on the floor, but the grape remained on the floor for two hours prior to the accident, the store would be held to have constructive notice of the danger and would be liable for the shopper's injuries. Some states apply the mode-of-operation rule when determining whether businesses are liable for negligence to business invitees. Under this rule, a business invitee who is injured on a business's premises is entitled to an inference of the business's negligence and is relieved of the obligation to prove that the business owner had actual or constructive notice of the dangerous condition that caused the injury. This rule applies to foreseeable risks incident to the business's operations. If the plaintiff is able to make such a showing, the burden is shifted to the defendant to prove that it exercised reasonable care under the circumstances. If the defendant has not exercised reasonable care, then it is liable to the plaintiff for negligence. Example A shopper at a grocery store slips and falls on a liquid on the floor in the soda section of the store and is injured. This is a condition that would commonly arise while operating a grocery store. Under the mode-of-operation rule, the store would be liable for negligence unless it can prove that it exercised reasonable care under the circumstances. Licensee A licensee is a person who is on a landowner's or tenant's real property legally and with the express or implied permission of the landowner or tenant and is not there to convey an economic benefit to the landowner or tenant (e.g., post office letter carrier, a delivery person such as a FedEx driver, a person going door to door to solicit political support). An owner owes a duty of ordinary care to invitees to make the premises safe or warn the invitee of dangerous conditions posing an unreasonable risk of which the landowner has actual knowledge. An owner or tenant is liable if she breaches this duty and the dangerous condition causes injury to a licensee. A licensee cannot rely on constructive knowledge to prove her case. Social guests such as a friend invited to visit or guests at a party are usually considered to be licensees. Example An owner of a house invites a friend over for dinner. The homeowner leaves a garden hose across the walkway to the house. The walkway is not well lit, and the danger is not obvious. The invited friend trips on the garden house and is injured. The homeowner is liable for negligence. Open and Obvious Danger Although a landowner and tenant of real property owes a duty of ordinary care to invitees and licensees, the law recognizes an exception to this rule for an open and obvious danger. Thus, a possessor of real property is not liable to invitees and licensees who are injured by open and obvious dangers on the premises. A danger is open and obvious if a reasonable person would have been able to observe, recognize, and perceive the danger and risk through casual inspection. These hazards are so plain to see that any reasonable person would be aware of them and take care around them. Examples A person is walking on a railroad track and is struck by a train. Walking on a railroad track is an open and obvious danger. A person who is texting and not looking where he is going trips on a crack in the sidewalk. There is an obvious danger in walking while distracted and without looking where one is going. However, if the open and obvious condition is hidden from casual observation, or poses an unreasonable risk of danger that could harm an invitee despite it being open and obvious, the possessor owes a duty to take reasonable precautions to protect invitees from the risk. This could include posting warning signs, blocking off the dangerous area, or remedying the danger. Example A person falls into an open trench that is hidden from view by bushes and that would not be expected to be seen by a reasonable person in the circumstances. ----------> Some states have eliminated the open and obvious danger exception to premises liability of possessors of real property. Trespasser A trespasser is a person who is on a landowner's or tenant's real property but has no invitation, permission, or legal right to be there. Generally, a landowner or tenant does not owe a duty of ordinary care to a trespasser. A landowner or tenant has no duty to maintain the land or premises in a safe condition for strangers entering without permission or to warn trespassers of such conditions. Example A burglar trips and injures himself on a bicycle that a homeowner negligently left out on the property. The owner is not liable. However, a landowner or tenant does owe a duty not to willfully or wantonly injure a trespasser. Example A homeowner cannot purposely set traps to injure trespassers. Landowners and tenants may use lawful force to protect themselves and others from being harmed by trespassers. Several states have eliminated the invitee-licensee-trespasser distinction. These states hold that owners and renters owe a duty of ordinary care to all persons who enter upon the property, even trespassers.

Transfer of Ownership of Real Property

Ownership of real property can be transferred from one person to another. Title to real property can be transferred by sale; tax sale; gift, will, or inheritance; and adverse possession. The different methods of transfer provide different degrees of protection to the transferee. Sale of Real Estate A sale, or conveyance, is the most common method for transferring ownership rights in real property. An owner may offer real estate for sale either personally or by using a real estate broker. When a buyer has been located and the parties have negotiated the terms of the sale, a real estate sales contract is executed by the parties. The Statute of Frauds in most states requires this contract to be in writing. The seller delivers a deed to the buyer, and the buyer pays the purchase price at the closing, or settlement. Unless otherwise agreed, it is implied that the seller is conveying fee simple absolute title to the buyer. If either party fails to perform, the other party may sue for breach of contract and obtain either monetary damages or specific performance. Deeds A deed is used to convey real property by sale or gift. The seller or donor is called the grantor. The buyer or recipient is called the grantee. A deed may be used to transfer a fee simple absolute interest in real property or any lesser estate (e.g., life estate). State laws recognize different types of deeds that provide different degrees of protection to grantees. The most common form of deeds are the (1) general warranty deed, (2) special warranty deed, and (3) quitclaim deed. These types of deeds are discussed in the following paragraphs. - General Warranty Deed. A general warranty deed (or grant deed) contains the greatest number of warranties and provides the highest level of protection to a grantee. General warranty deeds are usually used as a deed from a seller to a buyer of real property. In a general warranty deed, the seller warrants that he or she owns the property; that he or she has the legal right to sell it; that the property is not subject to encumbrances (e.g., mortgages), leases, or easements other than those that are disclosed; that his or her title is superior to any other claim of title to the property; that he or she will defend the grantee's title against all other claims; and that he or she will compensate the grantee for any losses suffered if the title proves faulty. The guarantee is not limited to the time that the grantor owned the property but extends back to the property's origins. Although the grantor is legally bound to compensate the grantee for losses caused by a breach of warranty, this guarantee is not helpful if the grantor is dead when the breach of warranty is discovered or if the grantor is financially unable to cover the losses. - Special Warranty Deed. A special warranty deed (or limited warranty deed) protects a buyer only from defects in title that arose during the period of the seller's ownership of the property. Thus, under this type of deed, the seller is not liable for defects in title that existed before the seller obtained the property or for encumbrances that were present when the seller obtained the property. - Quitclaim Deed. A quitclaim deed is a deed in which the grantor transfers only whatever interest he or she has in the real property. In a quitclaim deed, the grantor does not guarantee that the title to the real estate is free of any claims or encumbrances. A quitclaim deed provides the least amount of protection to a grantee because only the grantor's interest in the property is conveyed. Quitclaim deeds are not usually used as a deed from a seller to a buyer. They are most often used when property is transferred between relatives by gift or in a divorce settlement where one party is awarded the property. ----------> Because no guarantee or warranty is made regarding title in a quitclaim deed, title insurance cannot be obtained. Tax Sale If an owner of real property fails to pay property taxes, the government can obtain a lien on the property for the amount of the taxes. If the taxes remain unpaid for a statutory period of time, the government can sell the property at a tax sale to satisfy the lien. Any excess proceeds are paid to the taxpayer. The buyer receives title to the property. Many states provide a period of redemption after a tax sale during which the taxpayer can redeem the property by paying the unpaid taxes and penalties. In these states, the buyer at a tax sale does not receive title to the property until the period of redemption has passed. Gift or Inheritance Ownership of real property can be transferred by gift. The gift is made when the deed to the property is delivered by the donor to the donee or to a third party to hold for the donee. No consideration is necessary. Example A grandfather wants to give his farm to his granddaughter. To do so, he only has to execute a deed and give the deed to her or to someone to hold for her, such as her parents. Real property can also be transferred by will, trust, or inheritance. Example A person may leave a piece of real estate to his best friend by will when he dies. This transfer does not require the transfer of a deed during the testator's lifetime. A deed will be issued to the beneficiary when the will is probated. If a person dies without a valid will, the property is distributed to the heirs pursuant to the applicable state intestate statute. This statute specifies how the heirs of the deceased will inherit the deceased's property.

Introduction to Real Property and Land Use Regulation

Property and ownership rights in real property play an important part in the society and economy of the United States. Individuals and families own houses, farmers and ranchers own farmland and ranches, and businesses own commercial and office buildings. The concept of real property includes the legal rights to the property rather than the physical attributes of the tangible land. Thus, real property includes some items of personal property that are affixed to real property (e.g., fixtures) and other rights (e.g., minerals, air). This chapter covers the law concerning the ownership and transfer of real property, adverse possession, easements, liability of landowners, and zoning laws.

Real Property

Property is usually classified as either real or personal property. Real property is immovable or attached to immovable land or buildings, whereas personal property is movable. The various types of real property are described in the following paragraphs. Land and Buildings Land is the most common form of real property. A landowner usually purchases the surface rights to the land—that is, the right to occupy the land. The owner may use, enjoy, and develop the property as he or she sees fit, subject to any applicable government regulation. A building that is constructed on land—a house, an apartment building, a manufacturing plant, an office building—is real property. Structures such as radio towers and bridges are usually considered real property as well. Subsurface Rights The owner of land possesses subsurface rights, or mineral rights, to the earth located beneath the surface of the land. These rights can be very valuable. Gold, uranium, oil, or natural gas may lie beneath the surface of the land. Theoretically, mineral rights extend to the center of the earth, although mines and oil wells usually only extend several miles into the earth. Subsurface rights may be sold separately from surface rights. Plant Life and Vegetation Plant life and vegetation growing on the surface of land are considered real property. Such vegetation includes both natural plant life (e.g., trees) and cultivated plant life (e.g., crops). When land is sold, any plant life growing on the land is included in the sale, unless the parties agree otherwise. Plant life that is severed from the land is considered personal property. Fixtures Certain personal property is so closely associated with real property that it becomes part of the realty. Such items are called fixtures. Kitchen cabinets, carpet, and doorknobs are fixtures, but throw rugs and furniture are personal property. Unless otherwise provided, if a building is sold, the fixtures are included in the sale. If the sale agreement is silent as to whether an item is a fixture, the courts make their determination on the basis of whether the item can be removed without causing substantial damage to the realty. Air Rights Owners of land may sell or lease air rights above their land if applicable legal requirements are met. An air space parcel is the air space above the surface of the earth of an owner's real property. Air space parcels are valuable property rights, particularly in densely populated metropolitan areas, where buildable property is scarce. Air rights are subject to Federal Aviation Administration (FAA) regulations and state and local laws. Examples Railroads lease air rights over their railroad tracks. The Grand Central Terminal in New York City sold air rights over its railroad property for the construction of an office building next to Grand Central Terminal. Many other developments have been built in air space parcels in New York City and other cities in the United States. Fast-food restaurants and gas stations are often located on air rights over freeways.

Concurrent Ownership

Two or more persons may own a piece of real property. This is called concurrent ownership, or co-ownership. The following forms of co-ownership of real property are recognized: joint tenancy, tenancy in common, tenancy by the entirety, community property, condominiums, and cooperatives. Joint Tenancy Two or more parties can own real estate as joint tenants. To create a joint tenancy, words that clearly show a person's intent to create a joint tenancy must be used. Language such as "Marsha Leest and James Leest, as joint tenants" is usually sufficient. The most distinguished feature of a joint tenancy is the co-owners' right of survivorship of joint tenants. This means that on the death of one of the co-owners (or joint tenants), the deceased person's interest in the property automatically passes to the surviving joint tenant or joint tenants. Any contrary provision in the deceased's will is ineffective. Example Ziyi, Heathcliff, Manuel, and Mohammad own a large commercial building as joint tenants. They are joint tenants with the right to survivorship. Heathcliff executes a will that leaves all of his property to his alma mater university. Heathcliff dies. The surviving joint tenants—Ziyi, Manuel, and Mohammad—and not the university acquire Heathcliff's ownership interest in the building. Ziyi, Manuel, and Mohammad are now joint tenants, each with a one-third interest in the building. Each joint tenant has a right to sell or transfer his or her interest in the property, but such conveyance terminates the joint tenancy. The parties then become tenants in common. Example Ziyi, Heathcliff, Manuel, and Mohammad own a large commercial building as joint tenants. They are joint tenants with the right to survivorship. Ziyi sells her one-quarter interest in the building to Wolfgang. At that time, the joint tenancy is broken, and the four owners—Wolfgang, Heathcliff, Manuel, and Mohammad—become tenants in common, with no right of survivorship. Wolfgang executes a will that leaves all of his property to his alma mater university. Wolfgang dies. Because the owners are not joint tenants, but are instead tenants in common, Wolfgang's quarter interest in the building goes to the university. The university is now a tenant in common with Heathcliff, Manuel, and Mohammad. Tenancy in Common In a tenancy in common, the interests of a surviving tenant in common pass to the deceased tenant's estate and not to the co-tenants. The parties to a tenancy in common are called tenants in common. A tenancy in common may be created by express words (e.g., "Ian Cespedes and Joy Park, as tenants in common"). Unless otherwise agreed, a tenant in common can sell, give, devise, or otherwise transfer his or her interest in the property without the consent of the other co-owners. Example Alejandro, who is one of four tenants in common who own a piece of property, has a will that leaves all his property to his granddaughter. When Alejandro dies, the granddaughter receives his interest in the tenancy in common, and the granddaughter becomes a tenant in common with the other three owners. Tenancy by the Entirety Tenancy by the entirety is a form of co-ownership of real property that can be used only by married couples. This type of tenancy must be created by express words (e.g., "Atsa Yazzie and Natcha Yazzie, husband and wife, as tenants by the entirety"). A surviving spouse has the right of survivorship. Tenancy by the entirety is distinguished from joint tenancy in that neither spouse may sell or transfer an interest in the property without the other spouse's consent. Only about half of the states recognize tenancy by the entirety. Community Property Nine states—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin—recognize a form of co-ownership known as community property. This method of co-ownership applies only to married couples. It is based on the notion that a husband and wife should share equally in the fruits of the marital partnership. Under these laws, each spouse owns an equal one-half share of the income both spouses earned during the marriage and one-half of the assets acquired by this income during the marriage, regardless of who earns the income. Property that is acquired through gift or inheritance either before or during marriage remains separate property. Interest payments, dividends, and appreciation of separate property received or accrued during marriage are also separate property. During the marriage, neither spouse can sell, transfer, or make a gift of community property without the consent of the other spouse. If the couple divorces, each spouse has a right to one-half of the community property. When a spouse dies, the surviving spouse automatically receives one-half of the community property. The other half passes to the heirs of the deceased spouse, as directed by will or by state intestate statute if there is no will. The location of the real property determines whether community property law applies. If a married couple who lives in a noncommunity property state purchases real property located in a community property state, community property laws apply to that property. Example Sasha and Brad live in a community property state. Sasha is a successful brain surgeon who makes $1 million per year. She meets and marries Brad, a struggling actor who makes $30,000 per year. When Sasha and Brad are married, she owns $1 million of real estate, which during the marriage she retains and maintains as her separate property. During the marriage, Sasha and Brad use joint income and purchase a parcel of real estate for $500,000—Sasha contributes $450,000 of the purchase price, and Brad contributes $50,000 of the purchase price. During the marriage, Sasha's real estate increases in value to $1.5 million, while the real estate they purchased together increases to $600,000. After three years, Sasha and Brad get a divorce. Upon divorce, Sasha keeps her separate real property worth $1.5 million. Sasha and Brad each receive $300,000 of the real estate they purchased with joint funds during the marriage. Condominium Condominiums are a common form of ownership in multiple-dwelling buildings. Purchasers of a condominium (1) have title to their individual unit and (2) own the common areas (e.g., hallways, elevators, parking areas, recreational facilities) as tenants in common with the other owners. Owners may sell or mortgage their units without the permission of the other owners. Owners are assessed monthly fees for the maintenance of common areas. In addition to being used for dwelling units, the condominium form of ownership is often used for office buildings, boat docks, and the like. Cooperative A cooperative is a form of co-ownership of a multiple-dwelling building in which a corporation owns the building and the residents own shares in the corporation. Each cooperative owner leases a unit in the building from the corporation under a renewable, long-term, proprietary lease. Individual residents may not secure loans for the units they occupy. The corporation can borrow money on a blanket mortgage, and each shareholder is jointly and severally liable on the loan. Usually, cooperative owners may not sell their shares or sublease their units without the approval of the other owners. Many coop buildings are located in major cities such as New York, Chicago, and Boston.