Chapter 2: Property Ownership and Interests Pt 1

The parts of the 4 part circumstances test are?

1. Intention. court looks for objective evidence of the annexor's intent 2. method of annexation: how was it attached and can it be removed without damage? Actual Annexation = fixture is physically attached like a garage vs constructive annexation = more of a legal association such as a key 3. Adaptation to Real Estate: is it custom-made to fit/be used in the property? 4. elationship of the Annexor to the Property: seller-buyer the courts usually favor the buyer. Landlord-tenant favors tenant. the value of the item is not a factor in this determination whatsoever

Improvements

An improvement is any addition to or change in a condition of real property to increase its value or utility. NOT additions/alterations that are merely routine maintenance, repairs, or replacements

Appropriative Rights / Doctrine of Prior Appropriation

Appropriative rights are water rights granted by government permit independent of land ownership. This may be referred to as the doctrine of prior appropriation. It is not necessary to own property beside the body of water to apply for an appropriation permit. Government permits allow the holder to take water from a particular body of water for a specified use, such as crop irrigation.

other methods through which Fixtures can become real property

Becoming attached conceptually because of a close association with real property (such as the keys to a house) Becoming attached through the process of adoption; for example, curtains that were custom-made for an unusual window size or shape or even wall-to-wall carpeting Becoming part of the real property through agreement between the parties involved (such as a landlord and a tenant) Becoming part of the property because its removal would damage the property Become part of the property because of the intention of the person affixing the personalty to the real estate

Forces of Nature

Erosion Accretion Avulsion Reliction cause land to change shape

According to the North Carolina Uniform Commercial Code (UCC), any attached item on real property is considered the homeowner's personal property once the property is conveyed. T/F

F

Encroachment refers to a physical intrusion of land by another person without any lawful right to enter it. False True

F

Manufactured housing is a type of factory-built housing that is automatically considered real property once it is constructed onsite. T/F

F

Ownership of land involves only the surface and the dirt below, NOT the air above it. T/F?

F

Trees, shrubs, perennials, and naturally occurring vegetation are part of the land and therefore are considered personal property. T/F?

F

When Steven sells his house to Lois, the built-in bookcase transfers as part of the transaction. The bookcase is an appurtenance. T/F?

F, The bookcase is actually a fixture, not an appurtenance. An appurtenance is a right. As a fixture, however, the bookcase should transfer with the sale of the property. Although it seems straightforward, you may find that it could still be the subject of a dispute when he sells that house.

Fixtures

Fixtures are items that start out as personal property but once it is attached to real property, it belongs to the owner of the real property to which it is attached. Ex: building supplies in the garage waiting to be attached to the property.

figure out the sitch

Fructuc Inustriales vs Naturales amd which is personal vs real property.

Each of these terms could be used to describe a tractor EXCEPT a. appurtenance. b. chattel. c. personal property. d. personalty.

LEARN THESE WORDS a. appurtenance.

Rights of Riparian and Littoral Owners

Make reasonable use of the water surface. Keep in mind this isn't the same as owning the water. Take water for domestic uses, such as drinking or washing, and possibly irrigation rights for use on their riparian or littoral land. Use the water for recreational purposes.

Mineral Rights

Minerals are considered real property until they are extracted from the earth. A landowner may sell or lease mineral rights separately from the surface land, and many do, especially if they do not have the necessary skill or equipment to mine or drill

If you purchase a home next to an airport and you become annoyed when planes take off from the airport in early morning hours, do you think you may be able to recover damages from the airport for infringing on your air rights? Y/N?

No

NC Uniform Commercial Code (UCC) (G.S. 25-9-313)

The UCC has numerous provisions when an owner has financed the purchase of a fixture installed on the real property. One primary one is for the lender (creditor) to retain a security interest in the personal property until the lender is paid in full. This is implemented by an instrument called a security agreement filed in the office of the Registrar of Deeds. Any attached item is considered the homeowner's personal property until the security agreement has been paid in full. As a result, the filed security agreement gives the lender right to repossess financed items to satisfy repayment. The lender can even remove item attached to real property.

Control

The right of control allows the owner to physically alter or change the property. For example, a property owner can build a garage, tear down a fence, put in a swimming pool, etc. Of course, there could be zoning issues related to this, which are covered in detail in a separate chapter.

Disposition

The right of disposition allows the owner to transfer all or some of the rights to other people. For example, landowners normally have the right to sell, lease, give away, divide, and retain part of the land or to dispose of it completely. An example of partial disposition would be someone who sells 10 acres of his 100-acre farm. Another example of partial disposition would be a landlord who rents an apartment, allowing someone else to possess part of the property, even if temporarily.

Possession

The right of possession gives the owner the right to physically occupy the land and to use the land and make it productive. Owners can use the land in any way they want, as long as it is legal and does not interfere with other people's rights.

Quiet Enjoyment

The right of quiet enjoyment gives the owner the freedom to possess and use the land without interference from other people or society. However, this also includes a responsibility to make sure that their neighbors' enjoyment is not hindered or adversely affected.

Air Rights

The right to undisturbed use and control of airspace over a parcel of land (within reasonable limits for air travel); may be transferred separately from the land. Historically, that meant all the air but Congress gave the upper parts to the Fed Govt so you can't interfere with air traffic. you still have the rights to not be harmed by their use of the air space above you though.

Water Rights

The rights of an owner of land contiguous to or touching a body of water vary according to the type of water in question

bundle of rights

When you buy real property, you get the land, the attachments, plus a bundle of rights that are granted when you take ownership of the property that cannot be separated from real property: Possession Quiet enjoyment Disposition Exclusion Control

Which is NOT an example of avulsion? a. After a storm, part of Julie's property collapses in a mudslide. b. During a drought, the lake dries up, giving Ursula more land on which to grow a garden. c. A flash flood pulls John's barn and the land on which it sat into the river. d. Terry's hillside is torn away in an earthquake.

b. During a drought, the lake dries up, giving Ursula more land on which to grow a garden.

Which is an example of an appurtenance? a. the right to hunt on your own property b. the right to lease the space over your land for a billboard c. the right to sell your property to a willing buyer d. the right to plant apple trees on your land

b. the right to lease the space over your land for a billboard

Jill buys a house from Jack. She assumed that the curtains would be included in the price, even though they were not listed in the agreement of sale. What is the best argument Jill could make to persuade a judge if this goes to court? a. "Jack mentioned that they went with the house." b. "My agent assured me they were included." c. "The curtains were custom-made for the odd-shaped window." d. "The curtains were in the ad that appeared in the paper."

c. "The curtains were custom-made for the odd-shaped window."

Harvey owns a small commercial building that he rents to Lucy, who opens a ceramics shop. Lucy installs a kiln. Four years later, Harvey sells the property to Ann, who wants to start her own pottery business. When Lucy's lease is up, who owns the kiln? a. Ann b. Harvey c. Lucy d. It's impossible to tell without more information.

c. Lucy

Lenny owns a home within the city limits. In a corner of his property, he has an elaborate garden where he likes to sit quietly. He gets new neighbors who have a teenager. The teen is in a band, which practices in the garage right next to Lenny's garden most evenings until late. What activity is happening, and what right is being infringed upon? a. This is encroachment, which is infringing on Lenny's right of enjoyment. b. This is nuisance, which is infringing on Lenny's right of control. c. This is nuisance, which is infringing on Lenny's right of enjoyment. d. This is trespassing, which is infringing on Lenny's right of enjoyment.

c. This is nuisance, which is infringing on Lenny's right of enjoyment.

Which of these is a common example of personal property that is included in an agreement of sale? a. a dining room chandelier b. an in-ground pool c. a refrigerator d. a sofa

c. a refrigerator

John owns property on a small pond, which gives him a. accretion rights. b. appropriative rights. c. littoral rights. d. riparian rights.

c. littoral rights. NOT d. riparian rights.

A new chandelier is still in the box. What kind of property is that chandelier? a. impossible to know b. real property c. personal property

c. personal property

When Jason bought Lauren's house, she turned over the house keys as part of the transaction. The house keys have become real property through the process of a. actual annexation. b. adoption. c. agreement. d. constructive annexation.

d. constructive annexation.

Which of these is NOT classified as real property? a. wild blackberry bushes that grow on your property b. tulips planted in a backyard, which bloom every year c. magnolia trees d. irises planted in a flower box on your deck

d. irises planted in a flower box on your deck

Which of the following is NOT considered an improvement? a. fences built by a homeowner b. land graded by a developer c. retaining walls constructed by a contractor d. swimming pool cracks repaired by a homeowner

d. swimming pool cracks repaired by a homeowner

stuff you should brush up on

different kinds of water rights, appurtance, a lot more

fructus naturales

fruits of nature such as trees, natural vegetation, and perennial plants. naturally occurring or planted. Considered Real Property until you pick them then it is considered personal property

Oil and gas rights

governed by the rule of capture, which says whoever drills a well on their land owns all the oil or gas the well produces even though it may have migrated from under a neighbor's land.

Accretion

gradual addition to dry land by the forces of nature, such as when the tide deposits water-borne sediment on shoreline property. opposite of erosion.

Erosion

gradual loss of soil due to the action of wind, water, or other forces

Public improvements

improvements done by the government and are considered "improvements to the land" (e.g., grading, drainage, ditches, utility connections, sidewalks, curbs, and gutters).

Private improvements

improvements primarily done by the property owner and are considered "improvements on the land" (e.g., permanent structures such as buildings, walls, fences, tennis courts, swimming pools, and paved driveways).

The 4-Part Total Circumstances Test does what?

provides criteria for determining if an item is a fixture. All four parts must be met for the item to be a fixture instead of personal property

Appurtenance

rights that transfer with real property, or "run with the land." When real property is sold, appurtenant rights are usually transferred along with it. They can, however, be sold separately and may be limited by past transactions.

manufactured homes

start as personal property (titled w the DMV) but can become real property by removing the wheels, axle, and moving hitch, which are added during the factory construction attaching the house to a permanent foundation owed by the homeowner filing an affidavit of conversion to cancel the DMV title in which case you gotta change the tax listing and stuff

Lateral support

support from adjacent land. A neighbor's excavations may make your land shift and settle. In some cases, the neighbor can be held liable for resulting damage if there was negligence.

Subjacent support

support from the underlying earth. Generally, the mining party is liable for surface damage caused by underground mining even if excavations were performed carefully.

accession

the acquisition of title to land by its addition to real estate already owned, through human actions or natural processes but also when someone receives the title of something that is added to a piece of real property either by annexation or the forces of nature

Annexation

the attaching of a smaller item to a larger item. When studying real property, annexation is attaching personal property to real property, thereby creating a fixture.

Reliction

the gradual receding of water from a shoreline, exposing more of the water bed. This exposed land mass becomes part of your property

Severance

the process of converting an item from real property to personal property. by detaching the item from the land.

U.S. Department of Housing and Urban Development (HUD)

today's manufactured homes are built by these rigid standards. Certification label affixed to exterior.

alluvion or alluvium

water-borne sediment deposits on shoreline property by accretion

Supporting Rights

A piece of land is supported by the land that surrounds it. A landowner has a right to the natural support provided by land beside and beneath it.

Emblements (fructus industriales)

AKA fructus industriales fruits of industry i.e. plants planted or cultivated annually or seasonally

emblements

Another word for fructus industriales

Detaching Fixtures

Fixtures can be detached from the land and so revert to personal property through the process of severance

Littoral Rights

If the property is subject to the ebb and flow of the tide, such as an ocean, bay, or large, commercial lake, the rights are said to be littoral. Owners have unrestricted rights to use and enjoy the surface of the water. In the case of tidal waters, owners with littoral rights own the land under the water only up to the mean high-water mark (high tide) and the public/government owns the land beyond that point. What exactly is the high-water mark? According to the U.S. Supreme Court, the high-water mark is the berm of sand that the tide washes up on the shore. The ruling gives the public the right of passage on the land between the high-water mark and the water's edge.

Riparian Rights: Non-Navigable

If the waterway is not navigable, such as a small creek, land ownership rights extend to the center of the waterway. In this case, landowners cannot stop other people from enjoying the water by building a fence or in some other way blocking access to the water simply because they own the land underneath the water.

What is Personal Property?

It is anything that is not real property; therefore, it is not attached to the land and is movable

Emblements are considered personal property. T/F?

T

Frank owns a 12-story apartment building along the freeway. He agrees to allow an outdoor advertising agency to erect a billboard on the roof of his building. Frank is exercising his ownership rights to the air. T/F?

T

Marcus owns a cottage on the lake. When he sells the cottage, his littoral rights are automatically transferred to the new owner. T/F?

T

Harvested corn is an emblement. True False

T, An emblement is also called fructus industriales, or fruit of industry. It is personal property.

Exclusion

The right of exclusion allows the owner to stop others from using the property or even from entering the property.

what interferes with Real Property Rights

Trespass- people trespass Encroachment - physical object intrudes onto neighboring property. Nuisance - interferes w/ quiet enjoyment (odors, noises, sights)

Riparian Rights

Water rights of landowners whose land touches a natural body of flowing water such as a stream, creek, or river are said to be riparian. The owner of such property has the right to use and enjoy the water, for example, for recreational purposes such as swimming or boating. If the waterway is navigable, land ownership rights extend only to the high-water mark or the edge of the water. The public owns the riverbed and shares the right to use the water.

Do you think that a buyer can acquire personal property as part of an agreement to purchase real property? Y/N?

Y, it's very common (ex: apliances)

Avulsion

a sudden process where land is torn away by some natural force such as flowing water, mudslide, or an earthquake

Which is NOT an example of an attachment? a. a basketball hoop that is moved into the garage in the winter b. a greenhouse that is built off of the garage c. the lily pond in the backyard Japanese garden d. uncut roses on a rose bush planted by the back door

a. a basketball hoop that is moved into the garage in the winter

An irrigation system installed by Joe on his leased peach orchid ranch is considered a. a trade fixture and remains the property of Joe at the end of the lease. b. part of the owner's real property and may not be removed by Joe at the end of the lease. c. a leasehold improvement and is the real property of the landlord. d. a fixture that stays with the real property at the end of the lease.

a. a trade fixture and remains the property of Joe at the end of the lease.

Which item is LEAST LIKELY to be an attachment? a. an above-ground children's pool b. an apple orchard c. an island bolted to the kitchen floor d. a key to an attic

a. an above-ground children's pool

A large mirror that a buyer wants to remain with the property should a. be identified as a fixture in the sales contract. b. be disregarded as having no consequence. c. be agreed upon verbally, with its price stated in the contract. d. never be included in the sales contract.

a. be identified as a fixture in the sales contract.

Brett bought a farm and also wanted to separately purchase two tractors the seller owned. What would MOST LIKELY be required at the settlement to transfer ownership of those tractors? a. bill of sale b. deed c. purchase agreement d. sales contract

a. bill of sale

You're representing the buyer in a real estate transaction. The seller's fact sheet indicates that the lawnmower is included in the sale. Further conversations with the seller confirm this. The lawnmower is an example of _____________ property and ______________ need to be in the agreement of sale. a. personal / does b. personal / does not c. real / does d. real / does not

a. personal / does

What about leased property, such as a satellite dish that's bolted to the roof? Do you think that would be real or personal property? a. personal property b. real property

a. personal property

Which transaction does NOT represent an example of an appurtenance? a. selling the fructus industriales grown on your land b. selling the natural gas under your house to a utility company c. selling the space above your farm to a billboard advertiser d. selling water from your underground spring to a bottling company

a. selling the fructus industriales grown on your land

Trade fixtures

any equipment or personal property items a tenant installs or attaches to leased real property for use in the tenant's business or trade. they remain personal property of the tenant

Gareth inherits a plot of land from Jessie. A year later, he sells half of the property to Kim. A year later, she gives her half to Alex, who sells the mineral rights. This series of events best represents the legal property right of a. control. b. disposition. c. possession. d. quiet enjoyment.

b. disposition.

Which of these is real property? a. fructus industriales b. fructus naturales

b. fructus naturales

A landlord installs a wood-burning stove in the living room of a single-family home for the tenant's use. At the end of the lease, the stove is the property of the ________ and is ________ property. a. landlord / personal b. landlord / real c. tenant / personal d. tenant / real

b. landlord / real

You live in a house on the shores of a commercial lake. You are a ________ owner, which means that you ________ own the land under the water. a. littoral / do b. littoral / don't c. riparian / do d. riparian / don't

b. littoral / don't NOT c. riparian / do

John's neighbor has an oak tree whose branches and roots are extending across the lot line into John's backyard. Which of John's right is NOT being violated? a. air b. mineral c. surface d. subsurface

b. mineral NOT c. surface

Real property consists of all of the following EXCEPT a. rights associated with property. b. movable items not fixed to the land. c. man-made improvements. d. land and attachments to land.

b. movable items not fixed to the land.

You take the chandelier out of the box and attach it to the ceiling above the dining room table. Now what kind of property is the chandelier? a. personal property b. real property c. impossible to know

b. real property

modular housing

built onsite unlike manufactured housing so it's real property. state building codes instead of HUD

Digging up knock-out rose bushes from a flower garden and planting them in pots is an example of a. annexation. b. harvesting. c. severance. d. theft.

c. severance.

Personal Property AKA

chattel or personalty

Agriculture fixtures

installed by a commercial/farmer tenant for the express purpose of agriculture use unlike historically, the modern trend is to treat them like trade fixtures rather than real property

leasehold improvement

installed by the landlord for the use of the tenant. real property of the landlord

natural attachments

plants growing on the land are also included in the definition of real estate