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Types of Freehold Estates

Fee Simple, including fee simple absolute, fee simple defeasible, fee simple on condition and qualified fee simple Life estate

Interests differ according to:

How long a person may enjoy the interest What portion of the land, air, or subsurface the interest applies to Whether the interest is public or private Whether the interest includes legal ownership of the property

Personal property

The ownership of anything which is not real estate, along with the rights associated with owning the personal property item

A parcel, or tract

a section of land defined by boundaries.

estate in land

an interest that includes the right of possession

The main factor for distinguishing real from personal property is

attachment whether the item is permanently attached to the land or to structures attached to the land

Riparian Rights

concern properties that border moving water such as streams and rivers.

fee simple estate

highest form of ownership interest one can acquire in real estate

real property

land and anything attached to it

Real Estate

not only made up of land, but also all of the man-made structures that are "permanently" attached to the land.

An interest in real estate is

ownership of any combination of the bundle of rights to real property, including the rights to possess, use, transfer, encumber and exclude.

Tenancy in Common

when the owners are not married

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. Any number of heirs can share in the ownership of the willed tenancy.

Fee Simple on Condition

A defeasible fee (title), recognizable by words 'but if'.

Qualified Fee Simple

A fee simple defeasible estate recognized by the words "as long as" in the deed

Homestead

A homestead is one's principal residence. Homestead laws protect family members against losing their homes to general creditors attempting to collect on debts. New York does not recognize a homestead estate.

Transfer of interest

A joint tenant may transfer his or her interest in the property to an outside party, but only as a tenancy in common interest. Whoever acquires the interest co-owns the property as a tenant in common with the other joint tenants.

Termination by Partition Suit

A partition suit can terminate a joint tenancy or a tenancy in common. Foreclosure and bankruptcy can also terminate these estates. A partition suit is a legal way for an owner to dispose of his or her interest against the wishes of other co-owners. The suit petitions the court to divide

fixture

A personal property item that has been permanently attached to land or a building ex.) toilets, water pumps, septic tanks and window shutters

Economic Characteristics of real property: Improvements

Adding structures and improvements to the land add to its value and use. The improvements can also add value to the surrounding property and neighborhood

interests individually owned

All tenants in common have distinct and separable ownership of their respective interests. Co-tenants may sell, encumber, or transfer their interests without hindrance or consent from the other owners.

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).

Existence of an Agreement

An owner may specify which items will be included as fixtures and which items will remain personal property ex.) the stipulation by an owner that all of the appliances, including the washer and dryer, are fixtures that will sell with the property, but the refrigerator is personal property and will not be part of the sale.

Examples of interests include:

An owner who enjoys the complete bundle of rights. A tenant who temporarily enjoys the right to use and exclude. A lender who enjoys the right to encumber the property over the life of a mortgage loan. A repairman who encumbers the property when the owner fails to pay for services. A buyer who prevents an owner from selling the property to another party under the terms of the sale contract. A mining company which temporarily owns the right to extract minerals from the property's subsurface. A local municipality which has the right to control how an owner uses the property. A utility company which claims access to the property through an easement.

Two or more owners

Any number of people may be co-tenants in a single property

tenancies

Both leasehold and freehold estates The owner of the freehold estate is the freehold tenant, and the renter, or lessee, is the leasehold tenant.

chattels

Chattels real are annexed to real estate, whereas chattels personal are moveable

Identical rights

Co-tenants share an indivisible interest in the estate; that is, all have equal rights to possess and use the property subject to the rights of the other co-tenants. No co-tenant may claim to own any physical portion of the property exclusively. They share what is called undivided possession or unity of possession.

Economic Characteristics of real property: Permanence of investment

Constructing improvements on real property requires a large investment of capital and labor. Even when a building is demolished to make way for a new structure, the sewers, drainage, electric and water remain in place. The return on such investments is usually stable. Investors usually invest for the long term

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. New York no longer recognizes dower and curtesy.

Types of Leasehold Estates

Estates for years Periodic estate Estate at will Estate at sufferance

Method of Annexation

How the item is attached to the building can be a determining factor

freehold

I own the property There is no definite ending date. The estate lasts at least a lifetime, because the property can be willed to a person's heirs.

Leasehold

I rent the property - There is usually a definite ending date

Remainder

If a life estate names a third party to receive title to the property upon the death of the life tenant, the party enjoys a future interest called a remainder interest or a remainder estate

encumbrance

If a private interest-holder does not have the right to possess

Adaptability

If an item is uniquely adapted to the property, or the property is custom-designed for an item, it may be considered real property whether the item is easily removable or not ex.) House keys

Reversion

If no remainder estate is established, the estate reverts to the original owner or the owner's heirs

Intention

If someone attached an item to real property with the intention of removing it after a period of time, the item may be judged to be personal property. Conversely, if a person intended an item to be a fixture, even though the item is easily removable, it may be considered a fixture.

act of waste

If the life tenant damages or misuses the property

Physical Characteristics of real property

Immobility - The property itself cannot be moved from one place to another, even though some elements on the property can be removed, such as soil, and the topography of the land can be changed. Indestructibility - The property is permanent and the structures attached to it are usually for the long term. However, those improvements to the property can depreciate and become obsolete, which could substantially reduce the property's value. Uniqueness - No two pieces of property are ever exactly the same. Although they may be similar, each has its own location. Also, each parcel of property has unique characteristics, even if the differences are very small.

Survivorship

In New York, joint tenants enjoy rights of survivorship. That means if a joint tenant dies, all interests and rights pass to the surviving joint tenants free from any claims of creditors or heirs.

No unity of time

It is not necessary for tenants in common to acquire their interests at the same time. A new co-tenant may enter into a pre-existing tenancy in common

Equal ownership

Joint tenants own equal shares in the property, without exception. If there are four co-tenants, each owns 25% of the property. If there are ten co-tenants, each owns 10%

If there is some doubt as to whether an item is a fixture or removable personal property, a court may determine the status using one or several tests.

Method of annexation (attachment) Adaptability Intention Existence of an agreement

Land

Minerals beneath the earth's surface Water on or below the earth's surface The air above the surface all plants attached to the ground or in the ground, such as trees and grass

Characteristics of Land: non-homogeneous or unique

No two parcels are exactly the same. Even if two adjacent parcels are very similar and have the same economic value, they are different in that each parcel has a unique location.

Estate (Ownership) in Severalty/ sole ownership/ tenancy in severalty

Ownership by a single person only

A fee simple owner may also do any of the following:

Pass a life estate in reversion or remainder to another person (life estates will be discussed later in this chapter). Use the property as security for a debt. Grant an easement. Allow another person to lease the property. Give permission for another to conduct an activity on the property.

Emblements

Plants and crops that need human involvement and labor - personal property

There are two types of defeasible estates:

Qualified fee simple Fee simple on condition

The bundle of rights attached to the fee simple absolute estate includes:

Right of quiet enjoyment Right to give away Right to sell by deed Right to will Right to exclude Right to control with what's allowed by law

intangible rights that are part of the bundle include the rights to:

Sell Lease Encumber Use Enjoy Exclude Devise by will Occupy Cultivate Explore License Dedicate Give away Share Mortgage Trade Exchange

Economic Characteristics of real property: Supply and demand

Supply refers to the amount of a product or service that is available in the market for use or purchase. Demand refers to how much of that product or service buyers actually want. - when the supply is low, the price will be high. However, when the supply is high, if there is little demand, the price will be low

co-ownerships that are recognized:

Tenancy in common Joint tenancy Tenancy by the entirety

Electable ownership shares

Tenants in common determine among themselves what share of the estate each party will own.

life tenant

The holder of a life estate The life tenant does not have the right to pass ownership to his or her heirs.

The distinguishing characteristics of the life estate are:

The owner enjoys full ownership rights during the estate period. Holders of the future interest own either a reversionary or a remainder interest. The estate may be created by agreement between private parties, or it may be created by law under prescribed circumstances.

Real property

The ownership of real estate and the bundle of rights associated with owning the real estate.

The essential characteristics of fee simple defeasible estates are:

The property must be used for a certain purpose or under certain conditions. If the use changes or if prohibited conditions are present, the estate reverts to the previous grantor of the estate.

Riparian rights to use flowing water are subject to the following conditions:

The usage is reasonable and does not infringe on the riparian rights of other owners downstream. The usage does not pollute the water. The usage does not impede or alter the course of the water flow.

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

Tenancy in Common characteristics

Two or more owners Identical rights Interests individually owned Electable ownership shares No survivorship No unity of time

The defining characteristics and requirements of joint tenancy are:

Unity of ownership Equal ownership Transfer of interest Survivorship

four unities:

Unity of time - All parties must acquire the joint interest at the same time. Unity of title - All parties must acquire the property in the same deed of conveyance. Unity of interest - All parties must receive equal undivided interests. Unity of possession - All parties must receive the same rights of possession.

Some examples of acts of waste would include:

Using the property for something other than was intended. Causing a fire that destroys the home. Neglecting to pay property taxes. Conducting activities that would decrease the value of the property.

Unity of ownership

Whereas tenants in common hold separate title to their individual interests, joint tenants together hold a single title to the property

fee simple absolute

a perpetual estate that is not conditioned by stipulated or restricted uses

Undivided Interest

an owner's interest in a property in which two or more parties share ownership. - The terms "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. If two co-owners have an undivided equal interest, one owner may not claim the northern half of the property for his or her exclusive use.

Littoral Rights

attached to the property; When the property is sold, the littoral rights transfer with the property to the new owner. they cannot be sold separately or kept when the property is sold. properties that border bodies of water that are not moving, such as lakes, bays, seas and oceans enjoy the littoral right of unrestricted use; but own the land only up to the high-water mark. They do not own the water or the land under the water. The water and land beneath it are public property owned by the state.

conventional life estate

created by grant from a fee simple property owner to the grantee, the life tenant

Agricultural property

defined as land used primarily for growing crops or raising livestock, such as farms, pastureland, orchards and timberland. Zoning ordinances are usually favorable for agriculture use

Pur Autre Vie

endures over the lifetime of a third person, after which the property passes from the tenant holder to the original grantor (reversion) or a third party (remainderman).

life estate

freehold estate that is limited in duration to the life of the owner or other named person Upon the death of the owner or other named individual, the estate passes to the original owner or another named party

Right to Exclude

gives the property owner the legal right to keep others off the property and to prosecute trespassers.

Commercial property

income-producing property, such as office buildings, restaurants, shopping centers, hotels and motels, parking lots and stores. Some industrial properties may also fall into this category

Trade fixtures, or chattel fixtures

items of a tenant's personal property that the tenant has temporarily attached to a landlord's real property in order to conduct business - If the tenant fails to remove a trade fixture, it may become the property of the landlord through accession. From that point on, the fixture is considered real property.

Subsurface Rights

land beneath the surface of the real estate parcel the rights to remove mineral and gas deposits and subsurface water from the water table are examples of subsurface rights. A landowner could decide to sell or lease the rights to any gas or oil found in the land. Much of the farmland in southwestern New York State is subject to oil and gas leases.

Economic Characteristics of real property: Scarcity

land is a scarce commodity in a world that is three-fourths water. The supply of land is not endless. Even though there are areas that are undeveloped and/or uninhabited, the amount of land in a given location that is available for use is considered fixed.

Residential property

land or improved property with buildings designed for humans to live in, such as single-family homes, multi-family homes, apartments, vacation homes or condominiums

Industrial property

land used for industrial purposes, such as warehouses, factories, distribution centers and power plants

bundle of rights

legal rights that are attached to the ownership of that parcel

improvements

man-made structures in addition to land, such as fences, streets, buildings, wells, sewers, utilities, sidewalks and piers

illiquidity

meaning that it is not quickly or easily converted to cash, as short-term investments in stocks are

Characteristics of Land: indestructible

one would have to remove a segment of the planet all the way to the core in order to destroy it. Even then, the portion extending upward to infinity would remain. For the same reason, land is considered to be permanent.

Characteristics of Land: immobile or permanent

parcel of land cannot be moved from one place to another. One can transport portions of the land, such as mined coal, dirt, or cut plants. However, as soon as the coal or plants are removed from the land, they are no longer considered land.

Special purpose real estate

property that does not fall into one of the above categories. It has a unique use to the persons who own and use it ex.) churches, hospitals, schools and government buildings Public open space - usually owned by private persons or the government and includes undeveloped shorelines, public parks and lakes. Recreational areas, such as parks, water access areas, trails and shorelines. These are usually preserved for ecological or educational reasons. In New York, these areas are supervised by the local government, the Department of Environmental Conservation (DEC), and/or the Office of Parks, Recreation and Historic Preservation (OPRHP).

legal life estate

reated by state law as opposed to being created by a property owner's agreement

fee simple defeasible

some deeds create what starts out as a fee simple but attach some sort of condition or limitation In defeasible estates, ownership can continue indefinitely, provided the use of the property conforms to certain stated conditions.

Air Rights

space above the surface boundaries of the land, outlined by imaginary vertical lines that extend to infinity

Surface Rights

surface boundaries of the parcel. This includes the ground, all natural things affixed to the ground and all improvements. Surface rights also include water rights.

If the property borders a non-navigable stream

the owner enjoys unrestricted use of the water and owns the land beneath the stream to the stream's midpoint

Economic Characteristics of real property: Location

the preference of one area over another, based on any number of factors. These factors include history, reputation, convenience and beauty, as well as the geography.

police power

the right of the local or county government to zone

Right to Encumber

the right to mortgage the property as collateral for debt.

Right to Transfer

the right to sell, bequeath, lease, donate, or assign ownership interests -An owner may transfer certain individual rights to the property without transferring total ownership

Right to Use

the right to use it in certain ways, such as mining, cultivating, landscaping and building on the property -The right is subject to the limitations of local zoning and the legality of the use. -One's right to use may not infringe on the rights of others to use and enjoy their property.

Water Rights

the rights to own and use water found in lakes, streams, rivers, and the ocean

If the property borders a navigable stream

the stream is considered to be a public easement. In such a case, the owner's property extends to the high-water mark as opposed to the midpoint of the stream. The state owns the land beneath the water.

joint tenancy

two or more persons collectively own a property as if they were a single person