REAL PROPERTY OWNERSHIP/INTEREST

Lien

A claim or charge against the property that can result from a contractual agreement or from the operation of law. (All liens are encumbrances. Not all encumbrances are liens.)

Estate for Years

A nonfreehold estate that is for any fixed period of time and automatically terminates at the end of that period. (Doesn't have to be "years.")

Townhouse Ownership

A townhouse provides for ownership of the unit as well as the specific portion of land upon which the individual unit is located. No ownership of the common area.

PETE

Acronym for the four ways property ownership can transfer to the government: Police Power, Eminent Domain, Taxation, Escheat.

Tenements

All those things that are included in the definition of a land, AND include both corporeal and incorporeal rights in land. They include the intangible rights in the land of another, such as the right to take minerals, solis, timber, fish or game from that land.

Fruits of Industry

Also known as "fructus industriales" or "emblements." Growing things that require planting and cultivation. These are defined in the law as personal property.

Fruits of the Soil

Also known as "fructus naturales." Growing things that do not require planting or cultivation but that grow naturally and are perennial. These are designated in law as real property.

Fructus Industriales

Also known as "fruits of industry" or "emblements." Growing things that require planting and cultivation. These are defined in the law as personal property.

Emblements

Also known as "fruits of industry" or "fructus industriales." Growing things that require planting and cultivation. These are defined in the law as personal property. The term "EMBLEMENTS" is also used to denote the right of a tenant to reenter the property and harvest the emblements after the termination of tenancy.

Fructus Naturales

Also known as "fruits of the soil." Growing things that do not require planting or cultivation but that grow naturally and are perennial. These are designated in law as real property.

Profit a prendre

Also simply known as profit. This is the intangible rights in the land of another, such as the right to take minerals, solis, timber, fish or game from that land.

Fee Simple

Always inheritable.

Encumberance

Anything that diminishes the bundle of rights of real property.

NC Condominium Act

Condos must have a declaration, bylaws, and a copy of the construction plans. To be valid, it must be recorded in the public record in the Register of Deeds office in the county where the property is located.

Fee Simple Subject to a Condition Subsequent

Continues for an infinite period. Is defeasible. The grantor restricts the future use of the property in some way. As long as the property is NEVER used for the defined, prohibited purpose, the title will continue indefinitely in the name of the initial grantee or any subsequent grantee. Any use of the property for the restricted use will violate the covenant of the deed and the original grantor and/or heirs can go to court and sue for position. (Not guaranteed reversion like Fee Simple Determinable.)

Improvements TO the Land

Done by government or quasi-government entities. Things like (1) Roads, highways, and bridges built to make the land accessible; (2) Utilities such as electric power, water, sewer, gas lines, and phone lines; (3) modifications or improvements such as clearing, grading, draining to make land suitable for intended use.

Declaration (Condo)

Includes a legal description of the property, plat of property with location of buildings, plans and specs of the buildings/units, description of common areas, and degree of ownership in the common areas. Also includes covenants, conditions, and restrictions affecting the property.

Bundle of Rights

Includes the right to possession of the property; the right of quiet enjoyment of the property; the right to dispose of the property by gift, by sale, or by will; and the right to control the use of the property within the limits of the law.

Mineral Royalty

Income received from leases of mineral land.

Incorporeal

Intangible things, such as the rights in the property of another (such as an easement).

Reversionary Interest

Interest in a life estate that a grantor or his heirs has.

How a Mechanics' Lien Works

Laborer can file a lien against the property any time up to 120 days after the last day the work or material was provided to the property. It becomes effective as of the first day any labor or material was filed rather than on the day it was recorded. The lien holder has up to 180 days after the last labor or materials were furnished to take court action, provided it was filed in the 120-day period.

Real Property

Land and everything permanently attached to the land.

Mechanics' Liens

Mechanic=materialman or laborer. This is a lien filed by anyone who provides labor or material to a property or property improvement who are unpaid.

Agricultural Fixtures

NC-SPECIFIC! Items used by a tenant farmer that are permanently installed on the land become the property of the landowner. This may be defined and governed by contract, but must be agreed to by all parties.

Estate at Sufferance

Not truly an estate, but a holdover situation created when the tenant's lease has expired but the tenant won't leave.

Ownership of Joint Tenancy: NC v. National

Ownership does not have to be equal in Joint Tenancy in NC. Assume equal on national level.

Sole Ownership

Ownership in Severalty. When title to real property is held in the name of only one person.

Air Rights

Ownership of and the rights to the area above the surface of the earth, with reasonable control. This does not allow for the restriction of flight patterns over property, for example.

Cooperatives (Co-Ops)

Ownership of shares of stock in a corporation that owns a building containing cooperative apartments. Company owns it, you buy stock in the corporation that gives you the lease.

Condominium Ownership

Ownership of the airspace of an individual unit, as well as co-ownership in the common areas of the condominium along with other unit owners.

Tenants by the Entirety

Ownership that is limited to husband and wife. There must be a legal marriage at the time that the husband and wife receive title to the property. Automatically defaults to this if tenants are married (in NC). Can terminate by death, agreement, or divorce. NOT REQUIRED for married couples.

Mineral Lease

Permits the use of land for mineral exploration and mining operations.

PITT

Possession (equal) Interest Title Time (bought at same time) Acronym to help with Joint Tenancy definition.

Uniform Commercial Code (UCC)

Provides for the lender to retain a security interest in a chattel (personal property) until the lender is paid in full. Example: owner purchased a fixture (dishwasher) on a payment plan. If payments on dishwasher stop, original vendor can come take dishwasher.

Right of Alienation

Right of a life tenant to transfer his or her title to another person or pledge the title as security for a debt.

Surface Rights

Rights of ownership and use of the surface of the earth.

Planned Unit Development (PUD)

Small community that includes a form of cluster housing and recreational areas which also supports commercial activities (retail, etc.). Not a form of ownership, more a concept of development.

Corporeal

Tangible things/things that can be touched and seen.

Real Property (Ad Valorem) Tax & Special Assessment Liens

Taxes levied by a local government constitute a specific lien against the real estate. State laws provide that real property tax liens have priority over all other liens.

Foreshore

The land on a shore that is between the mean high watermark and the low watermark. The state owns the foreshore.

Intent

The major determinant/criterion when deciding if an item is a fixture. Would it be evident to a reasonable, rational person that the annexor's intention was that the improvement be permanent? (Part of the Total Circumstances Test for fixtures)

Life Tenant

The one who holds a life estate.

Tenancy in Common

Two or more persons holding a title to a property at the same time, with no rights of survivorship (goes to heirs, can be given to heirs). This is the default when owners are unrelated. Is an undivided fractional interest, equally divided unless stated specifically. Does not HAVE to be equal.

Ad Valorem

"According to Value." This is the way governments impose taxes on real property.

Conventional Life Estate

"Estate for tenant's own life." A Life Estate is a non-inheritable freehold estate. Created only for the life of the named life tenant. If nothing else is specified in the conveyance of the life estate, it will revert to the grantor or his heirs at the death of the life tenant.

Estates Pur Autre Vie

"For the life of another." These estates are measure by the lifetime of another person, other than the person receiving the title. "You can have that house as long as my mother is alive."

Two Types of Estates in Land

(1) Estates of freehold (2) Estates of less than freehold (aka leasehold estates or nonfreehold estates

Joint Tenancy

Co-ownership that requires four unities of time, title, interest and possession. People with Joint Tenancy must have the same interest in the property, must receive their title at the same time from the same source, and must have the same degree of undivided ownership and right to possession in the property. (PITT)

Improvements ON the Land

Done by property owners and include structures such as buildings, paved driveways & walkways, tennis courts, fences, walls, and swimming pools. DO NOT include routine maintenance, repairs, or replacements. [Do not confuse with improvements TO the land,]

Remainderman

Remainder, or future interest in a property that is a Life Estate. This is the person who would get a life estate if specified to pass on to someone other than the grantor or his heirs.

Condemnation

Taking property under the power of eminent domain.

Act of Waste

Violation of the right of estovers.

Adaptation

A criterion used in conjunction with other factors in determining if something is a fixture. Related to whether or not an item has been adapted specifically to the property (such as custom blinds). (Part of the Total Circumstances Test for fixtures)

Relation of the Attacher

A criterion used in conjunction with other factors in determining if something is a fixture. Relationship of the person making the attachment of an item to a property. An owner is presumed to make a permanent improvement, whereas a renter may be presumed to make a temporary attachment. (Part of the Total Circumstances Test for fixtures)

Method

A criterion used in conjunction with other factors in determining if something is a fixture. This is an assessment as to whether the method of attachment will cause damage to the property. (Part of the Total Circumstances Test for fixtures)

Estate at Will

A nonfreehold estates for an INDEFINITE time and may be terminated by either party instantaneously by giving notice to the other party. No identified time for termination required.

Estate from Year-to-Year

A nonfreehold, periodic estate that automatically renews at the end of its period if the parties do not provide otherwise. Also known as "tenancy from year-to-year," and does have termination requirements.

Trade Fixtures

A special category of fixtures for the items of personal property that are used in the course of a business operating in a leased property. (Shelves, commercial kitchen appliances, etc.)

Subsurface Right

Also known as "mineral rights." An interest in real property that allows the owner to take minerals from the earth.

Nonfreehold Estates

Also known as less-than-freehold or leasehold estates. Confer a rental interest in real property.

Levy

An assessment or tax against a property for payment of a share of the cost of improvements made to areas adjoining the property.

Estate

An interest in a real property sufficient to give the owner of the estate the right to possession of the property.

Freehold

An interest in land of at least a lifetime and therefore generally identified with the concept of title or ownership.

Fixtures

An item of personal property that is attached to the land or a permanent improvement on the land in such a manner that the law deems it to be part of the real property to which it is attached.

Appurtenance

Any right or privilege which is said to "run with the land" (transfers with the land). Includes things like subsurface rights, air rights, riparian rights, Iittoral rights, and lateral & subjacent support. Easements and covenants might also be considered appurtenances. The National Exam may call these "IMPROVEMENTS."

Time Sharing

Any right to occupy a property for five or more separated time periods over a span of five or more years. Laws pertaining to real estate transactions apply.

Improvement

Anything of value that is added to real property or anything that alters real property in such a way as to increase its utility or value. DOES NOT include repairs and replacements. Has two parts (1) private improvements, usually done ON THE LAND by the property owner, and (2) public improvements such as streets, sewers, water and sidewalks.

Personal Property

Anything that is not real property. That is, not land or anything permanently attached to land.

Riparian Rights

Appurtenant rights of an owner of property bordering a flowing body of water.

Bundle of Rights

Certain legal rights provided by a fee simple absolute (or fee simple or ownership in fee). Rights include conveyance of a life estate to another, pledge the property as security for a mortgage debt, convey a leasehold estate to another, grant an easement in the land to another, or give a license to conduct some activity on the property.

Specific Liens

Claims against a specific property, such as mortgages, property taxes, and mechanics' liens.

General Liens

Claims against all assets of a person, such as judgment liens, personal property tax liens, income tax liens, and estate and inheritance tax liens. These are ALL involuntary - NOT our choice.

Fee Simple Determinable

Defeasible Fee or Qualified Fee. An inheritable freehold estate in the form of a fee simple estate, but the title can be terminated by the grantor under certain circumstances. Example: title conveyed "so long as" a property is used for a specified purpose (like a school). Title reverts to the grantor or his heirs if purpose is not maintained.

Fee

Denotes ownership.

Total Circumstances Test

Determines an item's identification as a fixture in the absence of a contractual agreement by the parties. It involves the assessment using four criteria: Intention, Relation of the Attacher, Method, and Adaptation.

Articles of Association (Condo)

Establish an association to provide for the maintenance and management of the common areas and other services for the owner-members.

Marital Life Estates

Estate created by operation of law.

Fee Simple Absolute

Estate of inheritance. Provides the greatest form of ownership in real property. Always transferable, but not always free of encumbrances. a.k.a., fee simple or ownership in fee. Provides legal rights usually described as a "bundle of rights." Lasts "at least a lifetime." Ownership consists of two periods of time: from receipt of title until death, and then the period of time after the owner dies. Ownership conveys to owner's heirs.

Estates NOT of Inheritance

Estates only good for the life of the tenant (freehold) and do not pass along to heirs.

Hereditament

Everything in the term "land" AND everything in the term "tenements" that is capable of being inherited.

Taxation

Government's power to collect funds ad valorem (according to value) for real property. (Part of the acronym PETE: the four actions taken where real property can be subject to ownership by government)

NC Non-Navigable Water Boundaries

If an owner owns all the land surrounding a body of water (making the water non-navigable), then the owner owns all of the land under the water. If more than one owner owns property surrounding the non-navigable body of water, ownership extends to the center of the water unless the deed states otherwise.

NC Navigable Water Boundaries

In navigable waters, adjacent owners are limited to the banks of the watercourse. That is, the boundary is at the water's edge. The state owns the body of water and the right to use it.

Marital Life Estates

Intestate succession statute creates this, governing distribution of property when an estate owner dies intestate. Surviving spouse can choose a life estate in 1/3 of the real property owned in severalty. -A will cannot defeat the marital interest of a surviving spouse -Statutes do not apply to property owned as tenants by the entirety -Surviving spouse has a choice of either marital life estate or property of the deceased spouse willed to the surviving spouse

Sale or Resale Requirements of Condos

NC Condominium Act (1986) requires (1) Public Offering Statement before a contract is signed on a NEW condo (not on resale); (2) Purchasers Right to Cancel on any NEW condo without penalty during first 7 days; (3) Escrow of deposit - deposits must remain in developer's or agent's escrow account a full seven days unless contract is canceled; (4) Resale Certification - when reselling a condo built on or after October 1, 1986, owner or owner's agent must provide a resale certificate that disclose monthly assessment for common areas and other fees; (5) Warranties - implied warranty that unit is constructed in an acceptable manner, free from defects, and suitable for the purpose intended.

Littoral Rights

Rights of landowners whose property borders an ocean or a lake (where water levels fluctuate, as with the ocean tides). The state owns the FORESHORE, which is the land between the mean high watermark and the low watermark. The landowner owns the land to the mean high watermark.

Ownership in Severalty

SOLE OWNERSHIP. When title to real property is held in the name of only one person. (remember, derived from the word "sever")

Concurrent (Joint) Ownership

Simultaneous ownership of real property by two or more people. Also called co-ownership. Rights of the owners depend on the type of ownership they have. Owners may hold the title in the same manner as owners in severalty (fee simple absolute, fee simple subject to conditions subsequent, and fee simple determinable).

Allodial System

System of land ownership in the U.S. (a shift from the feudal system under British law) where title to real property may be held absolutely by individuals.

Eminent Domain

The government's power to take private property for public use by paying the owner fair and just compensation. Taking property under this power is called CONDEMNATION. (Part of the acronym PETE: the four actions taken where real property can be subject to ownership by government)

Police Power

The power a government has to enable it to fulfill its responsibility to provide for the health, safety, and welfare of the public. Owners are NOT compensated. (Part of the acronym PETE: the four actions taken where real property can be subject to ownership by government)

Estovers

The right of a life tenant to cut and use a reasonable amount of timber from the land to repair buildings or to use for fuel, but does not allow the tenant to cut and sell the timber for profit.

Lateral Support

The right of land to be supported in its natural state by adjacent land. Example: excavation on the lot next to yours causes your land to shift and be negatively impacted.

Subjacent Support

The right to have one's land supported from below. Example: owner of subsurface mineral rights under your property cannot cause the surface of your land to collapse.

Land

The surface of the earth; the area below the surface to the center of the earth, and the area above the surface, theoretically, to the highest heavens.

Survivorship

The surviving partners automatically take over the share of a deceased partner. NC does NOT provide the concept of automatic rights of survivorship in joint tenancies.

Mortgage Liens

This is a SPECIFIC LIEN. A mortgage or deed of trust pledges a specific property (such as a home) as security for a debt. If the borrower defaults, the lender can foreclose by having the property sold at public auction or applying the proceeds of the sale to the debt.

Partitioned

When each tenant in a Tenancy in Common have a specific portion of the property exclusively.

Escheat

When government takes ownership of a property because there is no one legally eligible as designated by statute to receive the property. (Part of the acronym PETE: the four actions taken where real property can be subject to ownership by government)