Real Estate 1-3

Fixtures

A chattel which has become permanently attached to the real estate

Administrator

A person appointed by the probate court to settle an estate when there is no will. They gather the assets, pay the debts, and distribute the balance of the estate to the heirs according to statute

License

A privilege to use land without exclusive control (lease, tenancy-at-will, etc.)

Easement

A right of way given to another to use the land for a specific purpose

Law of Capture

Allows for the siphoning of a natural resource from a deposit which extends beyond the boundary of one's own property

Alienation

An alienation clause protects the mortgagee's security position by adding stipulations such as calling the note due by conveyance of the property; an alienation clause in a contract gives the lender certain stated rights when there's a transfer of ownership in the property; also referred to as a due-on-sale clause, which accelerates the due date on the not if title to the mortgage property is transferred. This allows the lender to demand the entire loan due when the borrower conveys title

Cloud on Title

An apparent defect in title, which may be shown to be invalid or ineffective by evidence to the contrary; the title defect can be anyone of a wide range of issues that cause the current title to be called into question

Affixation

An artificial means of acquiring title to fixtures or improvements which have become permanently affixed to the land by the owner or another person

Annexation

An artificial means of acquiring title to fixtures or improvements which have become permanently affixed to the land by the owner or another person

Color of Title

An expression used to describe a deed or other instrument, which appears to convey title, but may not because of some defect not apparent on its face. In other words, on its face, the deed appears to be valid. Actually, all deeds contain "Color of Title" and are valid until successfully challenged by a party claiming a paramount interest

Government Powers

An individual's right, to use and enjoy a property they own, is limited by certain government powers to protect the common good of the community. These powers include taxation; escheat; eminent domain; and police power

Emblements

Annual crops that require cultivation and seasonal planting (wheat, corn, vegetables, etc.) and are treated as personal property, even while growing. A previous tenant who planted the crops has the right to re-enter the property to harvest them

Base Lines

Certain north-south lines are selected as principal meridians. These are intersected by east-west lines known as base lines

Covenant

Conditions/promises

Acre

Contains 43,560 square feet

Bargain and Sale Deed

Conveys all of the granto's interest in the property, but contains no expressed or implied warranties as to title. It does imply that the grantor has possession of, or a claim or interest in the property conveyed. This deed is used by trustees, fiduciaries, executors, and court officers

Annual Crops

Crops that require cultivation and seasonal planting (wheat, corn, vegetables, etc.) and are treated as personal property, even while growing. A previous tenant who planted the crops has the right to re-enter the property to harvest them. These crops are conveyed by a bill of sale

Manufactured Housing

Defines dwellings that are not constructed on the property, but are built off-site and then shipped to the location for installation and/or assembly; modular, panelized, precut

Fixtures: The Intention of the Parties

Did the installer intend the item to remain personal property or to become a part of the real estate?

Land

Earth in its natural state, including mineral rights, surface rights, and air rights

Right of Lateral Support

Ensures that the stability received from an adjacent property will not be removed or destroyed

Tangible Personal Property

Has physical substance (furniture, cars, clothing, jewelry, etc.) and also known as Chattel

Fixtures: The Manner of Attachment

Hoe permanently is it attached? Has it become attached in such a way that is has lost its identity, such as brick and mortar? Would removal result in substantial damage to the property, such as the removal of a stained glass window that may result in damage to the building in which it is installed?

Alluvion

Increase in land by soil deposited by water. it belongs to the person who own the land upon which it has been deposited

Incorporeal

Intangible

Permanence of Investment

Investments can be structured in all areas of real estate. The capital and labor costs to build an improvement represent a large fixed investment. Return on these types of investments tend to be long term and relatively stable

Fixtures: Type/Adaptability to the Real Estate

Is it being used as real or personal property?

Trade Fixtures

Items of personal property that are necessary to carry on a business, and can be removed by the tenant upon termination of the tenancy. Trade fixtures that are not removed within a reasonable amount of time after the premised has been vacated are considered abandoned. These become property of the landlord through accession

Scarcity

Land as we know it is scarce, and its usability is determined by habitability and productiveness

Indestructibility

Land is durable and can potentially last forever. Despite natural or man-made changes that vary the land, the basic element will always be there and remains the same

Immobility

Land is immovable and stationary, meaning the geographic location is ridgidly fixed

Non-Homogeneity

Land is unique, individual, and no two parcels are the same. A parcel of land purchased by a buyer could not be switched by the seller for a (seemingly) identical plot of land

Riparian: Non-Navigable

Land rights extend to the exact center of the waterway

Riparian: Navigable

Land rights extend to the water's edge and use of the water must not interfere with public rights

Littoral Rights

Littoral land is property which exists on the bank or shore of a sea, ocean or large lake. Owning property of this nature provides the owner with littoral rights. Littoral rights are similar to riparian rights except that they extend only to the mean high-water mark

Intangible Personal Property

No intrinsic value or material being, the value is derived from what it represents (stocks, bonds, checks, promissory notes, etc.)

Attorney-in-Fact

One authorized to act in another's behalf

Water Rights

Owners who have property that borders a body of water have riparian rights or littoral rights

Physical Rights of Land Ownership

Ownership of land includes separately defined groups of physical rights. The various rights of the land may be owned and controlled by more than one individual. Ownership consists of surface rights; subsurface rights; air rights; and water rights

Real Property

Ownership of real property includes everything that is permanently affixed or annexed to the land. When title to real estate is conveyed, it includes buildings, structures, and fixtures, even though they may not be specifically mentioned in the deed. Unless there is a written agreement to the contrary, all improvements automatically pass with title. However, real property can become personal property through the process of severance

Tenements

Property rights of a permanent nature which are related to the land and pass with conveyance of the title. These rights may be tangible (building, fixtures) or intangible (an easement over a neighbor's land)

Personal Property

Property that is movable, and includes all property that is not land or improvements. It is transferred owner to owner with a bill of sales, whereas real property is transferred by deed. However real property can become personal property through the process of severance. It can also either be tangible (corporeal) or intangible (incorporeal)

Hereditaments

Property, real and personal, which are conveyed to heirs upon the death of the owner

Certificate of Title

Received by owner which shows the state of the title and the person in whom it is vested

Allodial System

Recognizes the right of individuals to own land subject to no proprietary control of the government. This system is used in the USA

Appurtenances

Rights and privileges that belong to, and pass with, the title of the property (water rights, easements, improvements)

Riparian Rights

Riparian land if property which borders a natural watercourse such as a lake, stream, or river. Owning property of this nature provides the owner with riparian rights, which exist as a natural and inherent incident of ownership. These generally include the right to use the water for irrigation, swimming, boating, fishing, and for the construction of piers, and boathouses

Chattel

Tangible personal property

Accession

The acquisition of title to land or improvements as a result of natural or artificial causes. Transfer of property by accession from one owner to another is completed without the involvement of a deed. It results from the annexation of fixtures or from the deposit of soil along the banks of a stream as a result of accretion

Severance

The act of removing something from land; the process by which real property becomes personal property

Economic Characteristics of Real Estate

The four characteristics of land that affect its value as a product in the market place are scarcity, improvements, permanence of investment, and area preference

Police Power

The government has the inherent right to restrict the use of land to preserve order and to protect the public health and safety (rent control, zoning laws, building codes, environmental protection laws, etc...)

Eminent Domain

The government has the right to take property from an owner, upon just compensation, for public purposes. The procedure for taking property through eminent domain is called condemnation

Escheat

The government has the right to take title to property of a deceased person who dies intestate (without will) and has no heirs. This is to prevent property from becoming ownerless

Taxation

The government has the right to tax property to receive revenue to finance necessary public expenditures (schools, fire stations, hospitals, public employees, etc.)

Accretion

The gradual and imperceptible process of the addition of soil and rocks resulting from the natural action of water, such as the change in a shoreline of a river. The soil deposited is known as alluvion and belongs to the person who owns the land upon which it has been deposited. If water recedes, new land is acquired by reliction. Likewise, an owner may lose land through erosion, the gradual and imperceptible wearing away of the land caused by flowing water or other natural forces

Bundle of Rights

The inherent rights of owning land. According to this theory, ownership of real estate is compared to a bundle of sticks (individual, yet tied together), with each stick representing an individual right. These rights are possession, control, quiet enjoyment, exclusion, and disposition

Lease

The owner gives up possession of the property for a temporary time period

BoLR: Exclusion

The owner has the right to keep others from entering or using the property

BoLR: Disposition

The owner has the right to sell, will, give away, dedicate, or otherwise dispose of the land in any way they choose

BoLR: Control

The owner may control the way in which the land is used. They may build on the land, leave it vacant, farm it, mine it for minerals, or lease it to others

BoLR: Possession

The owner may live on the land, move away, or come and go as they please

BoLR: Quiet Enjoyment

The owner's right to use and enjoy the property without interference from other parties

Adverse Possession

The prescriptive right to acquire title to another's land by using the land for a prescribed period of time (20 years in Massachusetts). The possession by the claimant must be open, notorious, hostile, adverse to the true owner's interests, and continuous (uninterrupted for the number of years set by law)

Condemnation

The procedure for taking property through eminent domain

Fixtures: The Relation of the Parties

The relation between the parties may negate the ordinarily presumed intention of the installer. This circumstance may arise in such situations where when a landlord installs window air conditioning units in each apartment of a building. A prospective buyer would expect these units to remain as part of the real estate as their purpose is to enhance rental income

Lateral Support

The right to have land supported by the adjoining land, or soil beneath the adjoining land

Air Rights

The right to use, control, or occupy the air space above a property

Subsurface Rights

The rights of this group are also referred to as "mineral rights." They describe the rights to natural resources below the surface of the land. Mineral rights pass to the grantee (buyer) with the sale of the land unless otherwise specified in the contract. These rights allow an owner to mine for various ores, drill for oil or tap natural gas, as well as entitling them to enjoy any profits that may be produced. Associated with this group of rights is the law of capture

Avulsion

The sudden removal of soil from the land of one and its deposit to the land of another by the perceptible action of water. The resulting deposit belongs to the original owner provided it can be identified and removed within a reasonable time

Physical Characteristics of Real Estate

The three physical characteristics of land are immobility, indestructibility, and non-homogeneity

Dedication

The voluntary conveyance of private land to the public

Improvements

This aspect of real estate can explain how land can become valuable in any are on the earth. Usually the cost of building an improvement will be very expensive, and today most investors rely on this aspect of investment for real estate profits. However, as one builds improvements on a parcel of land, this can have a reverse effect on the value of a different parcel of land

Surface Rights

This group refers to the use of the surface of the land. This includes the crust and underlying soil which provide substance for vegetation and support for structures. This group also includes the right of lateral support

Area Preference

This preference for location is a major aspect in the appraisal business and is commonly referred to as situs (meaning "site"). This economic aspect refers to natural geography as well as people's preference for a specific area of real estate. Area preference is based on several factors such as convenience, reputation, and history

Mortgage

Title to the property is pledged as security for a loan

Perennial

Trees, shrubs, and hay, which do not have to be planted annually, require a deed for transfer of title

Feudal System

Under early English law, absolute ownership of all land was vested in the king or sovereign, with the subjects having only a right to use the land in return for services provided. This system was abolished in favor of the Allodial System

Corporeal

Visible and tangible

Legal Test of a Fixture

When parties resort to litigation to determine whether a chattel has become a fixture, the court will determine the intention of the parties; the manner of attachment; the relation of the parties; the type/adaptability to the real estate

Littoral means... a) Down by the shoreline b) Waterbed c) Building site d) Minimum lot size

a) Down by the shoreline Littoral is an ocean, large lake, or pond

Which is an appurtenance? a) Easement over adjoining land b) Retail fixture c) Above-ground pool d) Refrigerator

a) Easement over adjoining land An appurtenance is a legal right to cross the land of an adjoining property

When real property is sold, cut firewood is the property of the... a) Seller b) Buyer c) Split between buyer and seller d) Abutter

a) Seller The seller may take all his personal property after the sale

Easements, benefits, rights of ingress and egress, and other rights and privileges which pass with the title of real estate are called... a) Emblements b) Appurtenances c) Licenses d) Habendum clauses

b) Appurtenances These interests pass with title from one owner to another

Which of the following best defines real property? a) Land and the air above it b) Land and the area below and above the surface to infinity and all the improvements thereon c) The land, buildings thereon, and anything permanently affixed to the land and/or buildings d) Land and the mineral rights to the land

b) Land and the area below and above the surface to infinity and all the improvements thereon Real property includes rights in the land, air rights, subsurface rights, and improvements

Which of the following statements about the sale of a house that contains build-in bookcases is correct? a) The seller must transfer ownership of the shelves to the buyer under a bill of sale b) The seller must leave the shelves because they are permanently attached to the house c) The seller may take the shelves only if they can be removed without permanent damage to the house d) The seller may take the shelves because they are personal property

b) The seller must leave the shelves because they are permanently attached to the house The seller must leave the bookcase for the buyer unless otherwise specifically mentioned in the sales contract that the bookcases remain the property of the seller

Under which condition would a property owner have riparian rights? a) When minerals are discovered under the land b) When the land is contiguous to a stream c) When the property is in a geothermal area d) When the property borders on the ocean

b) When the land is contiguous to a stream Riparian rights belong to owners whose land borders a watercourse. They are rights to acquire title to accreted land and rights to boating, swimming, and so forth

When B bought his house, the dining room chandelier remained because it is... a) A chattel b) Personal property c) A fixture d) A trade fixture

c) A fixture Fixtures are real property

Real estate generally includes all of the following EXCEPT... a) Trees b) Air rights c) Annual crops d) Mineral rights

c) Annual crops Annual crops are considered personal property since they need to be planted every year. Plants such as hay or shrubs are permanently rooted in the ground and are considered real estate

The rights of ownership, including the right to use, possess, enjoy, and dispose of a thing in any legal way so as to exclude everyone else without rights from interfering, are called... a) Corporeal ownership b) Incorporeal ownership c) Bundle of rights d) Survivorship

c) Bundle of rights Real property is a collection of all one's rights in a certain parcel

Compensation often follows a court action relating to a... a) Trustee's sale b) Police power c) Condemnation d) Quiet title

c) Condemnation Condemnation is the legal proceeding brought under the constitutional right of eminent domain when the government and the landowner cannot agree on an appropriate amount of just compensation

The decision in which a town, city, or federal government is determined to take title for public improvements, title may be acquired from an unwilling owner by... a) Police power b) Adverse possession c) Eminent domain d) Dedication

c) Eminent domain Eminent domain is one of the four governmental controls over real estate

In a building, what are the ceiling tiles that drop into a metal frame called? a) Real property b) Trade fixtures c) Fixtures d) Personal property

c) Fixtures In a building, the ceiling tiles that drop into a metal frame are fixtures. Normally fixtures are attached; however, intent is the criteria for determining if something is a fixture. Here we have movable objects (ceiling tiles) that have adapted to the building, and therefore, fixtures

In a physical sense, real estate may be said to include everything EXCEPT... a) The surface of the earth b) The air above the surface c) Personal property d) The subsurface

c) Personal property This is the vertical concept of ownership, which includes subsurface and air rights, as opposed to horizontal ownership such as found in condominiums

Generally, things or objects of a temporary or easily movable nature are... a) Realty b) Devices c) Personalty d) Appurtenances

c) Personalty a, b, and c, involve real property. Personalty is another word for chattel or personal property

A buyer purchased a parcel of land and immediately sold the mineral rights to an oil company. The buyer gave up which of the following? a) Air rights b) Surface rights c) Subsurface rights d) Occupancy rights

c) Subsurface rights The owner of land owns from the center of the earth in theory to the highest of heavens. Land below the surface of the land is the subsurface rights an owner has

All of the following are true about the power of eminent domain EXCEPT that it... a) May be exercised by a district school board seeking to obtain property for a public school b) Requires that just compensation to be paid to the landowner when exercised c) May be used when a city wants to take an owner's yard to widen the highway d) May be used if a neighbor needs more access

d) May be used if a neighbor needs more access A school board would be a quasi-government body authorized to exercise eminent domain power. A private neighbor would not qualify (needs to be for a public purpose)

Which of the following is considered personal property? a) Wood-burning fireplace b) Awnings c) Bathtub d) Patio furniture

d) Patio furniture a, b, and c, are attached to the real estate. One can move the patio furniture and take it away from one place to another

The MOST important factor in determining whether something is a fixture is... a) The method of its attachment b) Its size c) Its weight d) The intention of the party who attached it

d) The intention of the party who attached it While a, b, and c, are factors, most courts emphasize the intention test, particularly as noted in the listing and sales contracts

Which of the following is an appurtenance EXCEPT a(n)... a) Barn b) Orchard c) Fence d) Trade fixture

d) Trade Fixture A trade fixture such as a merchant's display case does not become a part of the landlord's property during the term of the lease. Trade fixtures are removable by the tenant