Chapter 8
real estate encompasses:
land all man-made structures that are "permanently" attached to the land (aka- fences, streets, buildings, wells, sewers, sidewalks, piers)
Separate property consists of:
property owned by either spouse at the time of the marriage property acquired by either spouse through inheritance or gift during the marriage property acquired with separate-property funds income from separate property
URLTA sets standards for improving oral, vague, or unbalanced lease agreements. The law's positions on these issues are:
unclear lease term: becomes a periodic tenancy rent amount: fair market value or court's opinion waiving of rights: certain rights cannot be waived State laws based on URLTA generally do not apply to transient occupancies, ( hotel and motel rentals), proprietary leases in cooperatives, or to occupancy in a residence that is under a contract for deed.
Pur autre vie.
"for the life of another" For example, Yvonne grants a life estate to Ryan, to endure over the lifetime of Yvonne's husband Steve. Upon Steve's death, Yvonne establishes that her mother, Rose, will receive the property.
Determinable.
- usage limitations. -If the restrictions are violated, the estate automatically reverts to the grantor or heirs.
emblements.
-Plants and crops requiring human intervention and labor are called -considered personal property -if emblement is owned by tenant farmer, tenant has right to harvest crop weather lease is active or expired.
Interests In Real Estate:
-Possession -Non-possession -Estate -Encumbrance -Public Interest
Manufactured Housing
-could be considered real or personal property based on how it is affixed to the ground -The National Manufactured Housing Construction and Safety Standards Act of 1976 defined the types of factory-built housing and retired the mobile home designation. -must conform to HUD standards
Homestead laws-
-if you pay off your debts, you'll be exempt from forced sale -family must occupy homestead -homestead interest cannot be conveyed by one spouse; both spouses must sign the deed conveying homestead property
Ground lease (land lease)
-land portion of real property -primarily used for agriculture & mining -unimproved property to be developed and owner of land wanted to retain ownership -owner of improved property wants to sell and interest in improvements while retaining ownership
Doctrine of Prior Appropriation.
-legal "act" in some states that says the State controls and owns all bodies of water, because they view it as 'resource necessary for survival and scare' if state does not operate under this Doctrine- it enacts littoral and riparian rights.
The legal concept of land encompasses
-the surface area of the earth everything beneath the surface of the earth extending downward to its center all natural things permanently attached to the earth the air above the surface of the earth extending outward to infinity. (land also includes all minerals, and once removed- becomes not land anymore)
Joint Tenancy-
-unity of ownership (hold single title together ) -equal ownership -transfer of interest- may transfer interest but at the point it is a tenancy in common and not joint tenancy transfer their interest but only have -survivorship- if one tenant dies- the rest go to the other joint tenants and do not pass to heirs
In the event that the attachment criterion is insufficient to determine whether an article of property is real or personal, a court may apply one or more of the following additional criteria: (tests)
1. Intention 2. Adaptation 3. Functionality 4. Relationship of Parties 5. Sale/lease Contract provisions
fixture
A personal property item that has been converted to real property by attachment to real estate (chandeliers, toilets, water pumps, septic tanks, and window shutters)
tangible property.
All real estate, by its physical nature, is tangible property.
Ordinary life estate.
An ordinary life estate ends with the death of the life estate owner and may pass back to the original owners or their heirs (reversion) or to a named third party (remainder).
Tenancy in Common
Co-ownership of property in which each party owns an undivided interest that passes to his or her heirs at death.
Dower and curtesy.
Dower is a wife's life estate interest in the husband's property. When the husband dies, the wife can make a claim to portions of the decedent's property. Curtesy is the identical right enjoyed by the husband in a deceased wife's property. Property acquired under dower laws is owned by the surviving spouse for the duration of his or her lifetime. -transfer property within dower and curtesy states, the husband (or wife) must obtain a release of the dower interest from the other spouse in order to convey clear title to another party.
Functionality.
If an item is vital to the operation of the building, it may be deemed a fixture, even though perhaps easily removable ex. solar panels and window unit air conditioners
Condition subsequent.
If any condition is violated, the previous owner may repossess the property. However, reversion of the estate is not automatic: the grantor must re-take physical possession within a certain time frame.
Reversion.
If no remainder estate is established, the estate reverts to the original owner or the owner's heirs.
Sale or lease contract provisions.
In a sale or lease transaction, the listing of an item in the contract as a personal property item or a fixture overrides all other considerations. -unless otherwise stated- all fixtures are included in the sale (you have to mention things you want to keep in the purchase and sale contract, it then becomes personal property)
If you have a waterfront property in Florida, does that mean you are granted riparian rights and littoral rights automatically?
No. -for a property to convey water rights, it must extend all the way to the high tide mark. -sometimes that may appear to be waterfront property may not actually be on the water -if the boundary lot ends short of the high tide mark, ownership of that property will not grant riparian or littoral rights.
shareholders (buyers) interest in co-op is personal or real property?
PERSONAL shareholder or buyer of a co-op is PERSONAL property unlike condominium ownership- the co-op owner owns neither a unit nor an undivided interest in common elements
partition,
The suit petitions the court to divide,
Creation of joint tenancy.
To create a joint tenancy, all owners must acquire the property: at the same time, use the same deed, acquire equal interests, and share in equal rights of possession. These are referred to as the four unities.
Remainder.
a life estate names a third party to receive title to the property upon termination of the life estate
Affixing (attachment)
act of converting personal property to real property by attaching it to the real estate
Community property consists of:
all other property earned or acquired by either party during the marriage
A percentage lease Percentage leases are used only for retail properties.
allows the landlord to share in the income generated from the use of the property. A tenant pays percentage rent, or an amount of rent equal to a percentage of the tenant's periodic gross sales.
Accretion
an increase in land created by deposits of soil by natural action of water
Conventional trust structure. (Land Trust)
beneficiary controls property (occupabncy, control of rents/sale proceeds) -beneficiary controls trustee (trustee empowered to see or encumber property) -beneficiary identity not on record -limited term (limited and must be renewed or else trustee is obligated to sell property and distribute proceeds) -beneficiary's trust is personal property not real property, may transfer by assignment not deed -beneficiary may pledge property as security debt rather than mortgage -probated
How do you transfer co-op interest?
co-op interest is transferred by assigning both the stock certificates and lease to the buyer
Severance
conversion of real property to personal property by detaching it from the real estate, ex: cutting down a tree <think- sever- cut/split>
proprietary lease
conveys a leasehold interest to an owner of a cooperative. -The proprietary lease does not stipulate rent, as the rent is equal to the owner's share of the periodic expenses of the entire cooperative.
If more than one person, or a legal entity such as a corporation, owns an estate in land, the estate is held in some form of co-ownership. Co-owners are also called
cotenants.
Legal Life estate Created by: Do they vary from state to state? what is the purpose of defining life estate/life estate in general?
created by state law (as opposed to owners agreement)
Common law is the collective body of law deriving from: (think common- by the masses)
custom and generally accepted practice in society
Case law consists of: (think, case by case)
decisions based on judicial precedent.
leasehold estate
distinguished by its specific duration, as represented by the lease term. -form of tenancy -the renter, or lessee, is the leasehold tenant.
Real Property as defined by Florida:
does not include cemeteries or burials NOR mobile home lot or recreational vehicle
freehold estate
duration of the owner's rights cannot be determined: the rights may endure for a lifetime, for less than a lifetime, or for generations beyond the owner's lifetime. -form of tenancy - owner of freehold estate is the freehold tenant - 2 types of freehold estates 1. fee simple 2. life estate
encumbrance
enables a non-owning party to restrict the owner's bundle of rights. ex: Tax liens, mortgages, easements, and encroachments are examples.
If a private interest-holder does not have the right to possess, the interest is an
encumbrance.
when the owners are not married, the most common form of co-ownership
estate in common, tenancy in common No survivorship. A deceased co-tenant's estate passes by probate to the decedent's heirs and devisees rather than to the other tenants in common. -you can divide up shares how you want
If the interest-holder enjoys the right of possession, the party is considered to have an:
estate in land (or familiarly an estate)
Time Share ownership: fee or leasehold interest in a property whose owners or tenants agree to use the property on a periodic non overlapping bases.
fee or leasehold interest in a property whose owners or tenants agree to use the property on a periodic non overlapping bases.
Estate in Trust
fee owner-- the grantor or trustor-- transfers legal title to a fiduciary-- the trustee-- who holds and manages the estate for the benefit of another party, the beneficiary.
There are two forms of fee simple estate: absolute and defeasible.
fee simple estate Fee Simple Absolute. The fee simple absolute estate is a perpetual estate that is not conditioned by stipulated or restricted uses. It may also be freely passed on to heirs. Fee Simple Defeasible. The defeasible fee estate is perpetual, provided the usage conforms to stated conditions. (can only be used as a church/certain purpose etc.)
What advantages does a ground lease offer?
for owners developers and users- offers various financing, appreciation and tax advantages -ex: lessor (landlord) can take advantage of increase in value of land due to new improvements developed on it w/o incurring risks of developing and actually owning the improvements
Tenancy in partnership
form of ownership held by business partners, as provided by the Uniform Partnership Act.
life estate
freehold estate -limited in duration to the life of the owner the estate passes to the original owner or another named party. -holder of life estate is called life tenant -holders of future interest are either remainderman or reversion
Gross lease
full service lease requires the landlord to pay the property's operating expenses, including utilities, repairs, and maintenance, while the tenant pays only rent. rent levels are usually higher in this instance (common for office and industrial properties) Residential leases are usually gross leases
A conventional life estate is created by
grant from a fee simple property owner to the grantee, the life tenant. -Following the termination of the estate, rights pass to a remainderman or revert to the previous owner.
Surface rights.
ground, all natural things affixed to the ground, and all improvements, water rights.
fee simple
highest form of ownership interest one can acquire in real estate. called the fee tenant. remain subject to government restrictions and private interests.
Homestead.
homestead is one's principal residence. Homestead laws protect family members against losing their homes to general creditors attempting to collect on debts.
5 forms of legal life estate:
homestead, dower and curtesy, and elective share.
Tenancy by the entireties is a form of ownership traditionally reserved for
husband and wife Survivorship. Equal, undivided interest. No foreclosure for individual debts. The estate is subject to foreclosure only for jointly incurred debts. Termination. (divorce, death, mutual agreement, incurred debts)
navigable or not navigable: what happens?
if property abuts non-navigable stream-owner enjoys unrestricted use of water and owns land beneath stream to streams midpoint if water way if navigable- waterway is considered to be a public easement
Relationship of parties.
if tenant installs for business- it is a trade fixture and therefore considered personal property
Land has three unique physical characteristics:
immobility, indestructibility, and heterogeneity.
"Public Trust Doctrine"
in the state of Florida, the state holds the land seawrd of the average or mean high tide line in trust for the public. -(considers fishing, commerce, and public navigation as a basis for public access/bathing and swimming.
When does a lease terminate upon death of a landlord? (remember, if landlord dies- it does not terminate typically)
it only terminates if landlord had life estate in the property
right to exclude gives the property owner the legal right to:
keep others off the property and to prosecute trespassers.
County and local government regulation focuses on
land use control, control of improvements, and taxation. -can control how real estate may be developed, imporved, demolished and managed. -county and local governments have the power to zone land, take over land for public good, issue building permit. -county/local governments along with school districts/other juristictions have power to levy real estate taxes
Leasing of rights
leasing of water rights, air rights, and mineral rights. -for example: owner of land with deposits of coal might lease mineral rights to mining property with limited rights like, "you can only mine this much etc.) does not have quiet enjoyment of land just use of mining another example: railroad wants to make bridge over thoroughfare - must obtain air rights
break down the trustor trustee beneficiary thing
living trust- allowed the trustor during his or her lifetime to convey title to a trustee for the benefit of a third party -trustor charges trustee with all necessary responsibilities for managing property, protecting value securing income etc.
Owner responsibilities in a condominium ...
maintaining internal systems - maintaining property condition -insuring contents of the unit
duties trustee owes to trustor-
maintaining the value and condition of the property
improvements.
man-made structures attached to the land
Default by Landlord/constructive eviction,
most common form of landlord default When a landlord defaults on the terms of the lease, tenants may sue for damages. -when landlord negligence/disruptive action has made property unoccupiable - tenant my vacate and declare lease is cancelled by default
regulating real property rights, the federal government is primarily concerned with broad standards of real property usage including:
natural disaster, land description, and discrimination. The federal government does not levy (impose) real estate taxes.
what does a beneficiary owe to the trustee and other partes?
not much, beneficiary receives all income and sales proceeds, net of the trustee. (just think- benefit, beneficiaries)
What happens in a cooperative or a coop?
one owns shares in a non profit cooporation (cooperative association) and in turn acquires & owns an apartment building as a principal asses (along with this stock- the share holder acquires a proprietary lease to occupy one of the apartment units example: if cooperative association buys a building for 900,000 and all units are of equal size, so cooperation decides that apartments represent a value of $100,000 or 1/9th of total. what happens then is co-op buy pays the cooporation $100,000 and recieves 1/9th of the cooporations stock. shareholder recieves proprietary lease for apartment 1. share holder is now responsible for apartment units pro rata share of the cooporations expenses of 11.11% the co-op is the ONLY party with real property interest s
Real property
ownership of real estate and the bundle of rights
Personal property
ownership of anything which is not real estate, and the rights associated with owning the personal property item. (also called chattels or personalty)
How to get out of a joint tenancy or tenancy in common?
partition suit Foreclosure and bankruptcy can also terminate these estates.
Personal property- is it tangible or intangible?
personal property may be tangible OR intangible ex- Boats, jewelry, coins, appliances, computers, and art work are examples of tangible personal property. Stocks, copyrights, bonds, trademarks, patents, franchises, and listing agreements intangible personal property.
Trade fixtures, or chattel fixtures
personal property that the tenant has temporarily affixed to a landlord's real property in order to conduct business tenant has a right to keep since it is personal property -if tenant fails to remove a trade fixture- it may become property of the landlord by accession. (ex: clothes racks, shelving etc)
parcel, (or tract)
portion of land delineated by boundaries.
Littoral rights.
properties abutting bodies of water that are not moving, such as lakes and seas. Littoral rights attach to the property.
Riparian rights.
properties abutting moving water such as streams and rivers.
the co-op lease is called:
proprietary lease because tenant is an owner (proprietor) of the cooperation that owns the property. -lease has no stated or fixed rent - instead pro rate share of the corporations expenses in supporting cooperative -owners pay monthly assessments -co-op association (kind of like HOA) is like an HOA BUT it also controls how the owners use the property because it actually OWNS the units
If the interest-holder is not private, (such as a government entity) and does not have the right to possess, the interest is some form of:
public interest
State governments are the primary regulatory entities of:
real estate business -state governments establish real estate license laws and qualifications -also oversee activities of licensees -regulate to flood zones, waste disposal, drainage control, shore preservation, and pollution standards (because every state is different) -play a role in how real estate can be owned
Uniform Residential Landlord and Tenant Act (URLTA)
regulate leasing and management practices of landlords with residential properties. equalize and standardize rights of landlord and tenant protect tenants from unethical practices prevent unfair, complex leases and their enforceability
police power
right of the local or county government to zone. Another example of public interest is the right to acquire ownership through the power of eminent domain.
right to encumber the property essentially means:
right to mortgage the property as collateral for debt.
Appurtenances are
rights, privileges and improvements that belong to and pass with the transfer of real property.
If a single party owns the fee or life estate, the ownership is a tenancy in
severalty. sole ownership The estate of a deceased tenant in severalty passes to heirs by probate.
Option in a lease;
tenant does not have to exercise the option but landlord must give the right to the tenant to do so if they want and have followed all rules and regulations (typical is right to renew lease)
Testamentary trust.
testamentary trust is structurally and mechanically the same as a living trust, except that it takes effect only when the trustor dies.
Undivided interest.
two or more parties share ownership. "undivided" and "indivisible" signify that the owner's interest is in a fractional part of the entire estate, not in a physical portion of the real property itself.
Common area assessments
unit owners bear cost of all other property expenses, such as maintainence, insurance and management fees, supplies, legal fees and repairs
how to determine responsibility of how much each property owner is responsible for for when determines how much to pair for common area expenses, what happens?
units pro rata share of the property's ownership example: if unit represents a 2% share of property's value, unit owners assessment will be 2% of common area expenses