Chapter 2: Rights in Real Estate

What is the "Doctrine of Prior Appropriation?"

A doctrine that gives the state control of water use and the water supply

What is an emblement?

A plant or crop that is considered personal property

An item can be converted from real to personal property and vice versa by means of which processes?

Affixing and severance

Why is land considered non-homogenous?

Because no two parcels of land are exactly the same despite the fact that they could be considered similar and have the same economic value.

What is the primary thrust of federal involvement in real estate law?

Broad regulation of usage

Which level of government controls zoning laws?

County and local

If a tenant buys and installs a fan in the house they are leasing and leaves it in the house after moving to another location, what kind of property would the fan become?

If a tenant fails to remove a trade fixture, it becomes the property of the landlord through accession and the fixture would be considered real property.

One of your clients is interested in purchasing a property that is located by a brook. You show the client the property and he asks what his responsibilities are regarding the brook. Which of the following statements is most accurate.

If you own a home by a brook and it is a non-navigable waterway, the owner owns the land beneath the water up to its midpoint.

What are the three unique physical characteristics of land?

Immobile, indestructible, heterogeneous

If an individual purchases a property and the contract states that the property will not include light fixtures in the house, what kind of property would the light fixtures become?

In a sale transaction, the listing of an item in the contract as personal property item or a fixture overrides all other considerations. Therefore, if a contract stipulates that light fixtures are not included in the sale, they become a personal property item.

What does the fact that private ownership rights are not absolute mean?

In the United States private ownership rights are never absolute because the government can impose taxes or restrictions on the rights or take the property away altogether.

Your client wants to purchase an investment property. His goal is to rent out the property in order to help pay for the mortgage and make a little money every month. If he finds a tenant, what does that mean with regards to his real property rights?

It means that he is transferring a portion of his bundle of rights. He is giving up the right to possess portions of the surface.

Real estate can also include fences. What would a fence be considered?

It would be considered an improvement.

Which of the following is the best definition of real estate?

Land and everything permanently attached to it

Eric and Stan purchased their house two years ago. There is a non-navigable wide stream behind the house and another house directly behind the stream. Eric and Stan love fishing and they have fished for rainbow trout in the stream before. They want to build a bridge so that they have a high point in the middle of the stream that they can fish from. They start building the bridge, and the people that own the house behind the stream begin to complain that they are encroaching on their land. Eric and Stan believe that the land below the water is part of their property and, therefore, aren't doing anything wrong. In this case, who is correct?

Neither Eric and Stan or their neighbors are correct; In this case, because the stream is non-navigable, Stan and Eric own the land under the water up to its midpoint. Their neighbors own the land up to its midpoint as well. By building a bridge all the way across, Eric and Stan are encroaching on their neighbors land.

You are helping to sell your clients home. The property is on the lake and a lot of people attend the open house. Various people ask you whether with the sale of the property, the owners will own the land that lays under the lake. Will they?

No, Their ownership would extend to the high-water mark of the body of water because they will enjoy littoral rights of a navigable, non-moving body of water.

A camper affixes a tent to land for two weeks prior to traveling to another location. Can the tent be considered real estate?

No, because the intention is not of creating a permanent dwelling.

Which of the following is included in the bundle of rights inherent in ownership? a.) To transfer b.) To inherit c.) To tax d.) To vote

Regarding real property, to TRANSFER is included in the bundle of rights inherent to ownership.

Mr. Johnson lives on a property by a stream. He wants to know what his rights are with regards to use of the stream. The stream is not navigable and as the stream is behind his house he believes he has the right to use the stream at least to its midpoint. What are Mr. Johnsons rights to use the water behind his house?

Riparian rights apply here because we are dealing with a stream. More specifically, unrestricted rights because it is a non-navigable stream. Thus, Mr. Johnson's has unrestricted use of the stream and owns the land beneath the stream up to it's midpoint.

If Mrs. Carter's house sits behind a navigable waterway, what is true regarding the ownership of the land beneath the water?

Riparian rights explain that the state owns the land beneath the water because the waterway is considered a public easement. Mrs. Carter's property technically extends to the water's edge.

Cutting down a tree is an example of what type of conversion?

Severance; Severance is the conversion of real property to personal property by detaching it from a real estate.

A tree growing on a parcel of land is considered real property. (T/F)

TRUE

All real estate in the United States is owned by some person, private organization, or government entity, and therefore is considered real property. (T/F)

TRUE

Regarding real property, to transfer is included in the bundle of rights inherent to ownership. (T/F)

TRUE

Stock is one example of what is considered intangible property. (T/F)

TRUE

Surface rights apply to real estate contained within the surface boundaries of the parcel. This includes water rights. (T/F)

TRUE

bundle of rights include the following: possess, use, transfer, encumber, exclude. (T/F)

TRUE

What guarantees the right of private ownership of real estate in the United States?

The Constitution

You take your new client to see some properties around the area and he finds a property that he really likes. When you took him to view the property, there was a large boat parked on the side driveway. After the client purchases the property, he goes back to it and notices that the boat is gone. He calls you to complain over the fact that they took the boat. Why did the previous owners take the boat?

The boat is personal property, which means it is not part of the sale of real property.

A car in your neighborhood has been abandoned and left in an empty lot down the street for a very long time. You recall David, a neighbor's son, driving the car long ago, but you haven't seen David in forever. The car has very obviously been abandoned and left to rust. What is most accurate regarding this situation?

The car has been abandoned and left. No one is claiming ownership over the car, therefore it cannot be deemed property.

You are selling a house with a build-in shed in the back yard. The potential buyers want to purchase the house with the shed in it. Is the shed considered as part of the real estate?

The legal concept of real estate encompasses land and all man-made structures that are permanently attached to the land. The shed is built-in; therefore it is permanently attached to the land and part of the real estate.

Under the doctrine of littoral rights, an owner claims ownership of all of the land underlying a lake where there are three other abutting property owners. Which of the following is true?

The owner's claim is invalid, because the state owns the underlying land.

What does the right to encumber mean?

The right to mortgage a property as collateral for a debt.

Which of the following is included in the legal concept of land?

The surface, subsurface, air space above the earth, and all natural things permanently attached to the earth

Darren wants to sell his house. While showing the house for sale, your client notices that there is a swing set in the yard. Darren purchased the swing set for his daughter and placed it in the back yard for her to use. He asks you whether the house comes with the swing set. Does it come with the property?

The swing set is considered personal property; therefore it will likely be taken by Darren to his next residence.

If a property is mortgaged, which of the following is true?

There is an encumbrance on the property.

What part of a non-navigable waterway does the owner of an abutting property own?

To the middle of the waterway

A grocer temporarily installs special fruit and vegetable coolers in a leased grocery store in order to prevent spoilage. The coolers would be considered which of the following?

Trade fixtures that are personal property

When is a plant no longer considered land?

When it is no longer attached to land; Once elements are detached from land, they are no longer considered land.

One of your new clients, Jennifer, would like to find a property on the coast. She wants a house that overlooks the ocean. You ask whether the properties they look at have to be on the water or whether they could be close, but Jennifer states that she only wants to look at places on the water. She explains that all she has ever wanted is to own a part of the sea. Which of the following best describes what you should say to your client.

You can politely correct her by saying that she can never truly own a part of the sea, but she can enjoy littoral rights; Littoral rights concern properties abutting bodies of water that are not moving, such as the sea. The owner of the property on the water does not own the section of sea in the property, but can enjoy their littoral rights to use the beach in front of their property.

One of your clients wants to sell his house. He tells you that there are minerals on his land and he wants to retain the rights to those minerals once the property is sold. What is true regarding this situation?

You explain to the client that the legal definition of land, which includes any minerals under the surface of the earth, is included in the legal definition of real estate. If he were to sell his house, he also sells his land.

A body of water is considered public property owned by a state, under littoral rights, if a lake or sea is:

a navigable body of water

Private ownership rights in the United States are not _________.

absolute

All of the following are examples of adaptation regarding property, except;

an alarm system that a tenant intends to remove once he/she moves; An item that is uniquely adapted to a property, such as house keys, a garbage compactor, and a removal door screen, is considered real property, despite its removability.

Which of the following is considered tangible property? a.) boat b.) stock c.) contract d.) patent

boat

The major sources of real estate law are legislation at federal, state and local level, and

court decisions.

All of the following are included in the bundle of rights, except: a.) creation b.) use c.) exclude d.) encumber

creation

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

exclude

If a waterway is navigable, who owns the land beneath the water?

if a waterway in question is navigable, the waterway is considered a public easement and therefore the state owns the land beneath the water and the owner owns the property up until the water's edge.

The overriding test of whether an item is a fixture or personal property is

its definition as one or the other in a sale or lease contract.

The main distinction between the legal concepts of land and real estate is that

land does not include man-made structures.

Land is considered to be:

land is considered to be indestructible and one would have to remove a segment of the planet to destroy it, it is considered to be permanent.

Water rights concern the rights to own and use water found in all of the following, except; a.) navigable body of water b.) lakes c.) streams d.) rivers

navigable body of water

A _____ of land is a portion of land delineated by boundaries.

parcel

All of the following are examples of tangible property, except: a.) patent b.) boat c.) car d.) jewelry

patent

What kind of property is one which is owned, but not considered real estate?

personal property

All of the following are included in the bundle of rights, except: a.) purchase b.) possess c.) use d.) transfer

purchase

What kind of property involves the ownership of real estate?

real property

The primary distinction between the legal concepts of real estate and real property is that

real property includes ownership of a bundle of rights.

Surface rights, air rights and subsurface rights are

separable

The right to use real property is limited by

the right of others to use and enjoy their property.

Which of the following is an example of surface rights: a.) water rights b.) air surrounding the property c.) gas deposits d.) water from a water table

water rights