Personal Property

Real Property

"Real estate" synonymous with "real property". However, "land" has a narrower meaning. Land includes the surface of the earth and the space above and below it but only includes natural items like trees, crops, minerals, and water. Unlike land, real property includes improvements or fixtures, such as infrastructure, developments, and houses. Real property is not moveable.

Removing Liens- Basic Concepts: Priority

The priority of a lien describes the lien's position in line with other liens, or the order in which a creditor will be paid in the event the property is sold (usually by foreclosure). The priority of a lien is determined by law (tax lien), the date it was recorded, or by the date it attached to the property (collateral).

Community Property

Thoery of property ownership applicable to husbands and wives in certain jurisdictions. Community property is based on the theory that each spouse has an qual interest in property acquired by th efforts of either spouse during marriage. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are community property states

Fixture Disputes: Agreement

between parties may permit removal of a fixture or prevent dispute about item. Written agreements are best.

Physical Descriptions of Property

1. Local tax assessment offices keep a record of physical descriptions of properties upon which they base annual property tax assessments. These public records describe square footage of the building and square footage/acreage of the land. They also list the number of certain rooms (bedrooms, bathrooms) and certain property features (fireplaces, decks, patios, garage, basement). Public records also contain descriptions of the construction materials used, such as a roofing materials (composition shingle, slate, etc), exterior wall materials (siding, shingles, brick, stone.) and the construction type and style (single family, 2 story).

Distinguished from a License

A license is a personal privilege granted by one person to use the property of another (license does not transfer with land and may be revoked anytime)

Effect on Transfers

A lien does not transfer title to property, and does not prohibit the owner from conveying his interest in the property to another (although the property may be less marketable with the lien in place). However, once properly established, the lien is said to "attach" to the property until or unless it is released (the debt is satisfied). If a lien is not released prior to sale, the buyer buys the property along with the existing lien. Satisfying a lien implicates three basic concepts: priority: satisfaction, and enforcement.

Removing Liens- Basic Concepts: Enforcement

If a landowner defaults on a loan secured by a lien on his property, enforcement of the lien usually requires a court order. That is, a creditor must take legal action and request a court of proper jurisdiction to order the sale of the property in question. When a court orders that an encumbered property be sold to satisfy unpaid debts, liens are paid from the proceeds of the sale in order of priority.

Removing Liens- Basic Concepts: Mortgage

A specific loan secured by a voluntary lien on real property, where a property owner enters into a contract to borrow money and voluntarily agrees to extinguish his rights in his real property in favor of the lender if he fails to pay the debt according to the terms of the loan agreement. Mortgages are equitable.

Removing Liens- Basic Concepts: Special Assessment Lien

A specific, statutory, and usually involuntary, lien filed against properties that will benefit from a proposed public improvement.

Economic Land Characteristics: Improvements

Additions made to land that are intended to enhance its value. Improvements include houses and commercial buildings, as well as series, sidewalks, fences. Not all improvements enhance value and some may be restricted by government or neighborhood associations.

Physical Land Characteristics: Uniqueness

Also known as heterogeneity, and states that every parcel of real property is distinct- land and improvements are not standard. Parcels of land differ in size, shape, location, and appearance. Uniqueness is the legal basis for specific performance lawsuits, or lawsuits that seek to force the sale of land as agreed upon in a valid contract where the seller refuses to carry through with the sale as promised.

Real estate as Economic Indicator

An economic indicator is a measurable economic factor that changes before the economy starts to follow a particular pattern. Leading indicators are used to predict changes in the economy. R.E. is considered an indicator of the economic health of a community or country. Investors and economists closely watch the monthly report of new residential construction statistics (new housing starts) found on the US Census site. Because all related factors associated with building construction (financing, material, supply, employment) are important economic activities, housing stats can give a clue to the state of the economy in the near future. Sustained declines in housing start to slow the economy and can push it into a recession. Likewise, increases in housing activity trigger economic growth. Other R.E. economic indicators include foreclosures rates, defaulted mortgage loans, and late payments. Only a good economy can support high loans and payments necessary to purchase and support a home.

Unique Characteristics of RE: Real Estate Cannot be Moved

Another primary characteristic of R.E. is that it's immobile. Unlike many material goods, consumers must come to the goods rather than the goods going to the consumer. If there is a shortage of land for homes in a given area, you can't move in more land. It will always be a local commodity influenced by local conditions.

Usage of Legal Property Descriptions

Any document filed in land records concerning a property must identify the property using the legal description, rather than an informal description such as the property address. Examples, include: deed, deed of trust, mortgage, easement, or power of attorney.

Unique Characteristics of RE: Over-supply/Lower prices

Because R.E. is heterogeneous and immobile, you can expect there to be a fall in prices when there is an over-supply of homes or land in given areas. Cannot move the overrate to another area to keep prices stable.

Principal Legal Descriptions: Bounds

Can be established using artificial monuments (iron pipes, brass disks set into concrete, road intersections, and highways), and natural monuments (lakes, large boulders,a nd noteworthy trees)

Fixture Disputes

Courts apply 4 part test to determine if a fixture may be severed. Method of attachment; adaptation; relationship of parties; agreement

Economic Land Characteristics: Assemblage

Describes how combining two or more contiguous parcels of R.E. into a simple parcel under the same ownership can increase its overall value. Assemblage is viable when the combined property will be more valuable than the sum of the individual parcels. Any increase in value resulting from assemblage is known as plottage value.

Economic Land Characteristics: Investment Permanence

Describes the permanence of investment in infrastructure improvements. Infrastructure improvements include sewage, drainage, and electricity systems. Combined with the immobility of the underlying land, these types of improvements product relatively stable and long term returns. Infrastructure improvements offer greater options for future development than a specific improvement like a residential home or a commercial building.

Economic Land Characteristics : Scarcity

Economic principle stating that there is a limited supply of land on earth. The concept derives from the fact that the supply of land on earth is fixed and can never be increased. Scarcity can product an increase or decrease in the economic value of land depending upon the local supply and demand for land, as available land becomes scarce, its value tends to rise.

Liens

Encumbrance on property that function to guaranty payment of debts by using property as collateral. If a borrower defaults on a loan secured by a lien, the creditor can seek his share of the collateral to satisfy the borrowers debt. As such, liens always create an impediment to clear title.

Non-Freehold Estates

Estate in real property, also known as a leasehold estate, which only conveys the right of possession without the right of ownership. Non-freehold estates are for a definite duration, unlike a freehold estate which is for an indeterminable duration. The landlord-tenant relationship is the most common example of the non-freehold estate. With a lease, the tenant possesses a leasehold and therefore has the exclusive use (or possession) of the property for a specified period of time. However, the landlord retains ownership of the property and reversion estate (future Right to regain possession). In addition to the lack of ownership, the leasehold estate suffers from the freehold estate in that the lease itself is generally classified as personal rather than real property (as personal property, leaseholds survive the transfer of the leased property

Bundle of legal rights Example

Ex: You may receive an appurtenant right to cross your neighbors land to get to your own land where you otherwise have no direct access. Ex: A property owner who temporarily leases her property only transfers her right to possess and use the property (to a lessee for a duration) but not her right to dispose of or encumber the property. When you think about an owners bundle of legal rights, it might help to imagine a bundle of sticks that the owners may keep in her hand, sell, or transfer as she chooses, some types of ownership may include more legal rights than others. When ownership rights are sold, the value of the underlying real estate is affected. Ex: MOMA is NYC sold the airspace above one of its buildings to developers who constructed a 44 story residential condo thereon. The developers have no ownership interests in the Museum or in the land upon where the museum sits, only to the airspace.

Factors affecting Real Estate Supply and Demand: Governmental Policies

Federal, state, and local government policies and regulations can influence R.E. markets. Ex: favorable tax incentives for homeowners can increase demand, while high local property taxes can decrease demand. The local land use controls and zoning policies can affect the supply of land available for residential and other uses.

Cooperatives

Form of property ownership governed by state law, which is composed of single units in a multi-unit real estate development. In physical appearance, cooperatives and condos often resemble one another. However, the methods of ownership differ substantially. 1. Ownership: A corporation, partnership, or land trust holds title to the land and improvements. When a purchaser pays the agreed upon price for a particular unit, he receives stock in the corporation (personal property) and a proprietary lease to a particular unit (again, personal property). The proprietary lease gives the stockholder the right to occupy and use a particular unit for the life of the corporation. Proprietary means "owner," and leases in a cooperative are called properietary leases because the tenant is also an owner by virtue of his stock ownership in the corporation (or partnership or trust). When a unit is sold, the proprietary lease is assigned to the buyer along with the seller's stock. In a cooperative, real estate taxes and mortgages are liens against the entire parcel of real estate. Therefore, in the event of foreclosure, the entire property is threatened. 2. Management: The corporation, partnership, or trust that holds title to the entire cooperative project (units and common areas) manages the property according to its articles of incorporation, by-laws, covenants, restrictions, and house rules, In the case of a corporation, the governing body is usually the corporation's board of directors. The board of directors is empowered by its by-laws to set a price on each unit in the building. 3. Assessments: Under this type of lease, there is no fixed rental amount. Rather, the tenant (stockholder) pays a monthly assessment, which is his proportionate share of the carrying charges of the corporation (taxes, insurance, principal and interest payments, management fees, maintenance, and repairs). 4. Distinguished from Condominium Ownership: Individuals lease individual units (cooperative): they do not hold individual units in fee simple and the common areas as tenants-in-common (condominium).

Pur Autre Vie

French phrase meaning "for another's life", commonly used to identify a life estate measured by the duration of the life of a third-party, rather than by the life of the life tenant. Example - Sam, from the previous example, would have a life estate PAV if he were deeded a life estate measured by the life of some third person like an uncle. Sam would still be able to transfer his interest to Harry, but here is interest, like Sam's, would terminate upon the uncle death in the state would revert to another person as directed by the grantor.

Removing Liens- Basic Concepts: Judgment Lien

General, equitable, involuntary lien that attaches to a debtor's real and personal property. Usually, judgment liens only cover real property located in the county where judgment is rendered. However, a creditor can file notice in other counties if he wishes to extend the lien's coverage. Judgment liens are enforced when the court issues a writ of execution directing the sheriff to seize and sell as much of the debtor's real and personal property as is necessary to pay the debt and cover the expenses of the sale.

Removing Liens- Basic Concepts: Tax Lien

General, statutory, and involuntary lien imposed for non-payment of federal estate taxes, federal income taxes., nor payroll taxes. General liens attach to all real and personal property of the debtor. In order of priority, real estate tax and special assessment liens are superior to federal tax liens. However, some federal tax liens (such as liens involving federal estate taxes) are superior to most other liens, regardless of the date or recording.

Principal Legal Descriptions: Geodetic Surveys

Geodetic surveys include both horizontal and vertical land description methods that rely on a series of permanent ground markers (monuments, or benchmarks) and a datum (imaginary markers that serve as baselines for horizontal and vertical measures)

Fructus Industriales

Growing crops, also known as emblements, that are produced annually through labor and industry such as corn, wheat, fruit, veggies. Latin phrase mean "fruits of industry or labor". Thes items are personal property even before harvest. Special rules created to protect farmers who lease or sell land. Once growing, tenant has right to remove his crops after a lease expires.

Factors affecting Real Estate Supply and Demand: Cost/Availability of Labor and Materials

Housing supply is produced using land, labor, utilities, and building materials. If these commodities are readily available, their use will contribute to the overall supply of housing in a market. A scarce supply of one or ore of these commodities would contribute to lower supplies and higher prices.

Trade fixture Ex:

If a tenant rented space to operate a car repair garage and installed a life by bolting to floor, the lift is a trade fixture and personal property of tenant so long as it is timely removed. It is a necessary part of tenants trade or business. A replacement airs conditioner for the garage or a new bar installed in a tavern would normally not be considered trade fixtures, they would become property of landlord. Tenant would not be entitled to remove them at end of lease unless parties otherwise agreeagree.

Factors affecting Real Estate Supply and Demand: Unemployment/Income

If job opportunities are limited and salaries are low, the demand for homes decreases. As unemployment rises, supply may increase due to owners who are forced to sell their homes due to their inability to fulfill financial obligations. High unemployment rates also affect demand because prospective homebuyers are deterred from buying due to fears over job security.

Social iMpact of Home Ownership

If mor people in a community own their homes, the home values tend to rise bc people tend to take mor pride in property they own versus rent. Homeownership can lower the crime rates. Activities such as voting and participation in civic organizations are stat higher among homeowners than renters. In add, as the property value increases, the chances of being able to sell the home also increase, making it possible for homeowners to improve their lives. Although business cycles affect the purchase price of a home in a number of ways, one of the primary influences on home prices is the supply and demand in the local R.E. market.

Unique Characteristics of RE: Under-supply/Higher price

If their is not enough land or homes in a given area, price will almost always rise. Even if the ability to construct more, the time delay associated with construction industry cannot fill short term demand.

Fructus Naturales

Includes land, improvements (valuable additions to land such as buildings and infrastructure developments) and real estate (land plus improvements). Houses are a common improvement. Others include: Permanent plantings such as flowers, grasses, trees, and bushes. "Fruits of nature", classified as real property, items not removed from land without an agreement.

Sole Ownership

Individual ownership of real property, also known as an estate in severalty or several ownership. Under sole ownership, the owner holds title in one of the estates (fee simple, life estate, etc.) or a life estate in the name of one natural or artificial person (such as a corporation or partnership). Real property owned in a tenancy in severalty passes to heirs and is subject to probate upon the death of the owner. Real property may be owned individually by: natural persons (Individuals), corporations (fictitious persons), and partnerships (association of natural persons).

Rights in personal property

Intellectual property (patent or copyright), business rep (good will), leases (transfers possession and use without ownership) and partnership interests (business association of 2 or more persons)

Encumbrances

Interest in land held or asserted by someone other than the landowner, which may diminish its value. Encumbrances can affect rights to use, as well as rights to convey property. These limitations may be created by both individual and government action. In order to protect the purchaser of property, as well as the person benefiting from the encumbrance (mortgagor, lien holder, etc), encumbrances should be noted in deeds and in the public record.

Licensee Must Know the Local Market

It is important for R.E. professionals to keep up with trends in interest rates, national home price trends, new housing starts, and the other economic indicators that influence R.E. markets. However, the licensee should always keep in mind that R.E. is a local business. There can be many forces influencing your local market that will have little or no impact in other areas and vice versa. If you are in a market that has industry and many job relocations, watch your local businesses and industries carefully for expansion or downsizing. If your market is a resort community, or contains a lot of second homes, factors that can have great impact include local weather trends, aging of the population, and the stock market. Factors that impact discretionary income have more of an influence on this type of market. Therefore, while the licensee should keep us with the overall national market outlook, supply and demand in R.E. will always primarily be a local issue.

Removing-Liens- Basic Concepts: Recorded Liens

It is important for a creditor to record the appropriate document as soon as the lien is created in order to establish the lien's priority. Liens generally receive first in line, first in time treatment.

Fixtures

Items once moveable: such as fences, buildings, trees, bricks in a wall that have been affixed to real estate. Once affixed, items become real property. Real property passes to new owner and previous owners removes personal property. Severance is the act of removing a fixture. Through severance, a fixture can again become personal property. However, some items cannot be severed. Fixtures are real property unless they can be severed.

Removing Liens- Basic Concepts: Attachment Liens

Judicial action causing a defendants real a personal property to be seized by a court and held as collateral pending a lawsuit. Real property is "attached" by recording a copy of the writ of attachment in the public record, thereby creating a lien against the property. This puts the world on notice and assures the plaintiff that, if necessary, the property will be available to satisfy the judgment. The process of attachment does not apply a secured obligation like a mortgage. A mortgage must first attempt to satisfy the debt by seeking the sale of the mortgaged property, Then, if part of the debt remains unpaid, the mortgagee may seek to attach the rest of the debtor's property.

Economic Land Characteristics

Land has the following 5 non-physical economic characteristics that influence its value: scarcity, area preference, improvements, investment permanence, and assemblage.

Physical Land Characteristics:

Land includes the surface of the earth and the space above and below. Owners may sell or transfer surface, air, and subsurface rights. All land has the following 3 physical characteristics that influence value: immobility, indestructibility, uniqueness.

Removing Liens- Basic Concepts: Lis Pendens

Latin phrase "action pending" which describes the concept of providing notice of a possible future lien. A lis pendens provides constructive notice that an action affecting particular real estate has been filed and that the R.E. is, or is about to become, involved in a lawsuit. If the suit is successful, the priority of the lien does back tot he date the lis pendens was filed (not the date of the final court decision)

Principal Legal Descriptions

Legal descriptions are essential for deeds and titles (but not listing agreements, which may use non-legal descriptions). Principal legal descriptions include the following: Metes, Bounds, Compass Angles, Government Survey, Principal Meridians, Further Divisions, Lot, Block, and Subdivision (Recorded Plat), Geodetic Surveys.

Creation

Liens always arise from a debt, either through agreement (like a mortgage) or by operation of law (unpaid taxes), and from a variety of sources including mortgages, work on the property (mechanic's liens), and court orders (judgement liens)

Types of Easement: Easements Appurtenant

Limited right of one landowner to use the adjoining land of another for a specific purpose. An appurtenant easement requires two adjoining parcels of land that are owned by different parties. These parcels of land are known as the "dominant estate" and the "servient estate". Both the benefit and the burden of an appurtenant easement generally conveys with the land.

Removing Liens- Basic Concepts: Easements

Limited right to use the land of another, which may be voluntarily or involuntarily conveyed, An easement is an exuberance to land. A landowner who conveys an easement diminishes his ownership right in the subject property. There are two b road categories of easements: easements appurtenant and easements in gross. The primary difference between both turns on whether the easement is enjoyed by an owner of particular real estate (easement appurtenant), or whether the easement attaches to a particular person (easement in gross) Both private citizens and government entities may hold easements. Easements may arise by agreement, by adverse and hostile use, or by government action. Finally, because some easements attach to land and not to people, a buyer may take purchased real estate subject to an easement. An easement may be conveyed: expressly, by implication, necessary, prescription, and condemnation.

Unique Characteristics of RE: Real Estate is Heterogeneous

Means every piece of R.E. is unique, both in terms of location and nature and quality of any structures placed upon it. You cannot fill a R.E. supply shortage by manuf more identical units. Each piece of land is different and there is a limited supply. Though you might be able to create more condos on a given piece of land, the land itself cannot grow to accommodate a short supply.

Principal Legal Descriptions: Metes

Measured in inches, feet, yards, and sometimes miles, and usually require reference to a compass setting.

Non-legal Descriptions

Method of describing real property for convenience only, and not for the purpose of a deed, mortgage, or other instrument requiring a legal description. While deeds and titles require legal property descriptions, consumers often use less formal descriptions to discuss and characterize real property (can be used in advertising or listing agreements). The most common example of such informal methods is the street address. The street address is useful in locating real property, but it is insufficient to local real property borders by survey. However, the simple street address of a parcel is a sufficient description in a sales contract. Front footage is another example of a non-legal description of property (portion of land that abuts a street or water)

Principal Legal Descriptions: Lot, Block, and Subdivision (Recorded Plat)

Method of legally describing property, which begins with a large tact of land known as a subdivision plat. Subdivision plats are initially located by either metes and bounds or government survey. A S.P is a large map which notes the layout of lots and their numbers. Once established and named, S.P.'s are further divided into blocks and lots. Before they maybe recorded, S.P's must be pre-approved by local governmental units in charge of zoning. Each recorded plat receives a book an page reference number, and all plat books are available for public inspection. If a parcel of real property is part of a recorded plat, the legal description need only include the lot and block number, tract names, map book reference, county, and state. In order to have any legal effect, all subdivision plats must be recorded in the public recorder's office, clerk's office, or land records office of the locality in which it is situated. A block is a group of contiguous lots, which are usually divided by an access road. A lot is generally the smallest unit of measure in this system, intended to be conveyed in its entirety. Subdivisions may be further subdivided or altered after the initial plat is recorded. This requires creating and recording new plats, usually partial plats reflecting changes to the initial plat. When this occurs, the legal description may need to refer to all the plats, reflecting the history of the description of the parcel at issue.

Principal Legal Descriptions: Metes and Bounds

Method of legally describing real property, which identifies the outer edges of a parcel by establishing a well-marked starting point, called a point of beginning, then describing in which direction and how far the property boundary runs from the POB. For easier locating, POBs are usually marked by permanent artificial monuments, like a surgery stake. A legal metes and bounds descriptions must start and finish at the POB or the description is defective. Metes and bounds is well suited for identifying irregularly shaped parcels because one can navigate in any direction from the POB, unlike other methods that rely on regular shapes, like the government survey method. A mete is old term for measure and bound for boundary.

Types Of Legal Property Descriptions

Method of locating R.E. that is sufficiently accurate for a deed, mortgage, or other formal instrument. A property description is legally sufficient if it can be reasonable identified by a typical surveyor. The 3 principal methods of legally describing real property are: metes and bounds; government survey; and lot, block, and subdivision. In some cases, land is describes by referring to another publicly recorded document, such as a deed or mortgage. Such a reference is legally valid only if the referenced document contains a valid legal description.

Joint Tenancy

Method of property ownership, where title is held by multiple persons as if all the owners were a single person. Each joint tenant has identical rights in the property, and each can occupy (right of possession) the entire premises. A principal aspect of a joint tenancy is that when one joint tenant dies, the joint tenants interest automatically passes to the reimagining joint tenants by right of survivorship

Concurrent Ownership

Method of real property ownership by two or more persons at the same time (concurrently). Co-ownership or co-tenancy exists in one of the following there forms: joint tenancy, tenancy in common, and tenancy by the entireties.

Principal Legal Descriptions: Government Survey

Method of surveying land adopted by the US in 1785 to facilitate the government she sale of large tracts of land as the population rapidly expanded westward. The government survey method is also known as the geodetic or rectangular survey system, and it is used in more than 30 states, mostly in the mid-west. This method employs the use of imaginary lines running N/S and E/W. These lines form a checkerboard pattern as they intersect, which are further divided into smaller units. This method works well for identifying large parcels but not so well for describing small or irregularly shaped lots.

Personal property

Moveable and unattached to land, tangible like cars, jewelry, horses. Intangible like stocks, bonds, mortgages. Includes trade fixtures, leases, emblements. Known as personalty and chattel. Some property may be affixed to land.

TITLE INSURANCE

Risk management tool offers policy holders limited protection against title defects or encumbrances that are discovered after real estate transfers. IT reimburses the policy holder for any undiscovered and creeping claims or interests in title (title defects, clouds on title, or encumbrances) that arose before property transferred

Time Shares

Ownership interest in real estate, also known as interval ownership, where possessory rights are divided into fixed, variable, or rotating time periods (weeks, months, or years). Time share ownership is most commonly used int he sale or lease of vacation properties. As with condominiums, state laws govern the development, marketing, sales, ownership, and management of time share property. 1. Ownership: May be acquired by lease, license, or deed of interval ownership. Time share purchasers gain fee simple title as a tenant-in-common with other time share owners, or a tenancy for years with a. Future tenancy in common. Because time-share owners are T-I-C, each has an undivided interest in the entire property. However, the owner's use of the property is restricted too specified time periods and units. 2. Interest: Unit owner's rights restricted to specified time periods (intervals). 3. Bundle of Rights: As previously discussed, property ownership includes the following 6 district rights (bundle), which may be individually or collectively transferred to another: possess, control, enjoy, exclude, encumber, and dispose

Bundle of legal rights

Phrase that is used to describe the 6 distinct principal intangible legal rights of property ownership. * Right to possess property * Right to control property within legal limits * Right to enjoy property and use it legally * Right to exclude others from property * Right to encumber property by lessening one's right os ownership in any way * Right to dispose of property by sale, will, or other transfer. Along with physical elements of ownership, these intangible rights pass to new owner is whole or part with sale or transfer.

Uses of Real property

Public (zoning) and primates (deep restrictions) controls limit how property may be used and influence its value. Commonly available property uses: residential, commercial, industrial, agricultural, recreational, specific (Churches, hospitals, colleges, cemeteries), and public (state, federal, and municipal land).

Removing Liens- Basic Concepts: Operation of Law

Real estate property tax liens and assessments take priority over other types of liens, regardless of their date of recording. Generally, lien priority follows the following order: tax liens, mortgages, mechanic's liens, other liens in the order they were recorded, and unrecorded liens.

Principal Legal Descriptions: Further Divisions

Rectangles formed by principal meridians and base lines may be subdivided as follows: Checks (24 miles per side), townships (6 miles per side within a check), and sections (640 acres, or 1 square miles within a township) Further, a township is formed where township tiers and range lines intersect. Township tiers are imaginary lines that run E-W, parallel to base lines. Range lines are imaginary lines that run N-S, parallel to principal meridians. Townships are located by their distance N or S of base lines and E or W of P.M. There are 36 numbered sections within a township. The numbering begins in the NE corner, which is always section number 1. Sections may be further broken down into halves, quarters, and so on. A physical marker called a survey monument is located at each section corner.

Economic Land Characteristics: Area Preference (Situs)

Refers to a person's preference for one location over another. "Location x3" Often identified as the most important economic characteristic of land.

Fixture Disputes: Relationship of parties

Residential renters les likely than commercial to be able to sever (compare trade fixtures) Ex: a firmly affixed chandelier in a residential home sale is likely to be a fixture (barring agreement to the contrary). However, if a renter replaces his landlords light fixture with a chandelier of his own, that chandelier would likely remain the personal property of the renter upon expiration of the lease so long as the renter reinstalls the original fixture.

Removing Liens- Basic Concepts: Satisfaction

Satisfaction refers to the process of removing a lien upon full payment of the underlying debt. Bc a lien is an encumbrance on a title, the lienee (owner) should make certain that the lienor (creditor) executes and records a satisfaction of lien as soon as the lien has been paid in order to remove the cloud on title. Evidence of satisfaction is usually in the form of an instrument called a "quitclaim deed".

Principal Legal Descriptions: Principal Meridians

Series of numbered imaginary lines running to N to S across US creased by the government for purpose of surveying land. Base Lines: Series of imaginary lines that run E-W, est by the Government, Which intersect meridians.

Removing Liens- Basic Concepts: Property Tax Lien

Specific (attaches to a. Specific parcel of real estate), statutory (arising from legislation), involuntary (created by operation of law) liens filed against real property at the beginning of each tax year (usually Jan 1). The effective date of property tax liens is the date taxes are assessed. Property tax liens are superior liens, meaning that they take priority over other types of liens, regardless of when they were recorded. Overdue property taxes become liens automatically, without a requirement to file or record the lien.

Removing Liens- Basic Concepts: Vendor's Lien

Specific, equitable, involuntary lien filed by a seller (vendor), against the property sold, in the amount of any unpaid purchase price. Vendor liens are not a direct interest in the property, but an equitable right in case all the purchase money is not paid.

Removing Liens- Basic Concepts: Mechanic's Lien

Specific, statutory, involuntary Lien against real property by material men, or mechanics (laborers), for the value of materials or labor for improvements, repairs, or maintenance of real property. Mechanic's liens can only secure payment for work and materials that have actually become a permanent part of the building or the land. The effective date of a mechanic's lien varies state to state but is usually the day that work visibly commences. Mechanic's liens can be filed after settlement and some states require that notice of this possibility be provided in sales contracts.

Homestead

State laws or state constitutional guarantees that are intended to protect surviving spouses of homeowners from real estate taxes, general creditors, and other circumstances arising from the death of a spouse. States vary in the extent of homestead exemptions, including the amount of acreage and value of homes covered by the exemption

Physical Land Characteristics: indestructibility

States that land cannot be destroyed. The concept of indestructibility is the legal basis for neither insuring land nor being able to depreciate it. Its value may be destroyed by changing conditions, but land exists forever.

Impact of supply and demand on real estate prices: Supply and demand is a basic economic principle

Supply and demand is a basic economic principle: if a product is in high demand but in low supply, the price of this product will rise bc market conditions will support it. Vice versa. Supply and demand in R.E. is not as easy to balance as it is for manufactured commodities. The construction of more buildings takes time, there may not be room to build in any given area. Building cannot move to where buyers are. Unique characteristic of the R.E. market must be considered. These include: heterogeneous, cannot be moved, oversupply/lower prices, undersupply/higher prices.

Principal Legal Descriptions: Compass Angles

Surveyors define direction through the use of compass angles. A surveyor uses both precision instruments and known natural and artificial bounds to measure the exact angles and distances in order to establish the boundaries of a parcel.

Dower and Curtsy

The legal right or interest recognized by some states that a spouse has in the property of his/her husband or wife. Dower: Wife receives limited inheritance in husbands property. Curtsy: husband receives limited inheritance in wife's property . Most states have eliminated dower and curtsy. Since discrimination based on gender is illegal in most states, they now provide the same benefits to both women and men upon the death of a spouse

Factors affecting Real Estate Supply and Demand: Demographic

The main demographic determinants on the demand for housing are: population size and population growth. More people in area, greater the demand for housing. Family size, age, income of population also play a role.

Termination

a joint tenancy may terminate by mutual consent of the parties, or by sale. Joint tenants cannot will their own ownership interest to others, but they may sell their interest. When a joint tenant sells his interest to an outside party, the outside party does not take ownership as a joint tenant because there is no unity of time or title (two of the four unities require for formation of a joint tenancy). Rather, the outside party take title as a tenant in common with the remaining joint tenants. Most important, because all four unities do not exist, the outside party has fewer rights and cannot occupy the entire property like the joint tenants (the tenant in common and can only occupy his share).

Estate for years

also known as a tenancy for years, with a definite beginning and a definite ending date that is not automatically renew. The term years is a misnomer. And estate for years can be for any definite period of time (one week, one day, or 10 years). And estate for years does not terminate upon the sale of the leased property. No notice from either party is required to terminate an estate for years because it already contains it's own termination date. Because the lease is personal property belonging to the leasee, the lease remains valid and the leasee may remain in possession of the leased property is sold or the owner dies. However, this is not the case with an estate at will and and estate at sufferance

Creation of Easements: Implication

an easement may arise by implication from the acts or conduct of the parties. An easement by implication does not require a written agreement, and arises where: a larger parcel of land is divided into smaller parcels; the use for requiring the easement existed before the land was divided; and the easement is reasonably necessary (unlike an easement created by necessity, which require strict necessity). If property is subdivided, it is presumed the seller intended to grant the buyer all easement rights necessary for the buyer to use the property. Example: a person who acquires mineral rights on a property also requires an implied easement enter the property for the purpose of removing the minerals, even if the deed does not expressly give him those rights. Prescription: a prescriptive easement is a right acquired by an adverse user, or use it that is using the land of another without permission and in conflict with the owners interest. This type of easement is only acquired by the adverse, hostile, exclusive, open, uninterrupted, and continued use of another's property for a certain prescribed length of time (anywhere from 7 to 20 years depending on applicable state law). Do not confuse an easement by prescription with an adverse possession. Although they are based on the same legal principle, adverse possession involves gaining an ownership interest, while an easement by prescription involves gaining only the right of use (not title), by adverse means

Creation of Easements: Necessity

an easement may arise by necessity only wear a particular use it strictly necessary, and despite any express grand a reservation. Easements by necessity are created by operation of law rather than by a formal written agreement. The classic example of an easement by necessity is one that arises when a piece of property is landlocked and requires access across another's property. The easement by necessity exists only so long as the necessity exists.

Statutory Estate

any estate created by (state) law (the enactment of legislation). Examples include dower, curtsy, community property, and the homestead exemption

Trade fixtures

articles of tangible personal property that are necessary to a tenants trade or business. Even if a trader fixtures is firmly affixed to real estate, it remains the personal property of the tenant. Contrast a trade fixture with a. Fixture where the ability to remove an item is limited. Trade fixtures must be removed by or before the expiration of a lease or within an agree upon reasonable time thereafter in order to remain the tenants personal property. Tenant responsible for damage to premises caused to removing or installing a trade fixture.

Creation of Easements: Express Reservation

created by land owner selling his property but retaining an easement (by "reservation") in the property

Agreement

created by written consent Agreement example: two adjacent owners may agree to Sherry common wall by creating an easement. Typically, the wall will be located on the property line, it would provide structural support to both properties, and both owners would share equally in maintenance and repair costs. Such an agreement should be in writing, signed, acknowledged, and recorded. Condemnation: an easement by condemnation arises by operation of law through the government's power of eminent domain. And easement taken by condemnation must be necessary for a public purpose. Where private land is taken for public purposes (eminent domain), the government must justly (fairly) compensate landowners for any loss in property value. The United States Constitution guarantees that the government will not take property without just compensation. Termination of easements: easements by necessity commonly terminate when it when the underlying necessity no longer exists. Easements appurtenant commonly terminate when there is a merger of the estates (dominant and the servient estates are merged income and a common ownership), there is a release from the dominant estate owner in writing, there's an abandonment of the dominant estate (requires an intent to abandon along with the conduct manifesting such intent), or the servient estate is destroyed by an act of God. The court may also terminate an easement under proper circumstances (as with a quiet title suit).

Physical Land Characteristics: Immobility

describes how property cannot be moved from one geographical location to another. Due to this characteristic, the value of real property is directly affected by its external surroundings. However, small bits of land may erode over time by accretion (natural forces, such as water and weather, cause land to accumulate or erode over time).

Water Rights

entitlement to use and maintain water for agricultural, recreational, or personal use. Significant in states with limited water supply. Most states follow one of 3 legal doctrines to determine who has the intangible right to use or divert water and how much: riparian (reasonable use for those with property bordering moving water), littoral (reasonable use for those with property bordering non-moving water), and prior appropriation (owner who first diverts water has superior right to all others)

Freehold estates

estate (ownership interest) in land in which one has both possession and (indefinite) ownership rights in real property. Persons holding freehold estates are said to be "seized" of the land. Seisin is defined as the possession and ownership of a freehold estate. There are two types of freehold estates: fee estates in life estates.

Future estate

estate (ownership interest) that is certain to arise in the future (present ownership without present position). That is, someday the future estate will become a present estate such as a fee simple or life estate. However, until that time, one merely owns an interest in the land without the right to possess it. Principal types of future stays include the remainder estate and the reversion estate.

Remainder estate

estate that automatically arises after an existing estate terminates. The remainder estate converts from a future estate to a possessory estate automatically upon the termination of the prior estate. The term remainderman describes the person who holds the remainder of the estate, or the person designated to take title upon the termination of the prior estate (cannot be the seller). Reminder estate example: Sam Brown owns the Brown family cabin in fee simple. Currently, Sam is allowed his uncle Bert to live in the cabin rent free. Sam wants the cabin to remain in the Brown family after he dies. Therefore, Sam decides that upon his death, he will transfer the cabin to uncle Bert for the duration of uncle Bert's life. Thereafter, The property will go to his sister Emily in fee simple. Uncle Bert has a life estate in the cabin and Emily is the remaindermen - the cabin will pass to Emily upon uncle Bert's death. As a reminderman, Emily has an ownership interest but no right to possess the premises until uncle Bert dies. Consistent with her ownership rights, Emily may prevent uncle Bert from committing waste by seeking injunction or filing suit for damages

Creation of Easements: Express Grant

express easements must be conveyed in writing, usually through a deed, with a description of the easement and the subject property, that is signed, acknowledged, and recorded. And attempt to create an easement or Ally may result in a license, which is revocable I will and without a dominant estate.

Life estates

freehold estate conveyed to a person for the duration of someone's life. The duration of estate can be tied to life of any person, including the life tenant. The holder of a life estate has all the rights of property ownership (all the sticks in the bundle of legal rights), Including the right to possess, on, mortgage, and sell the property, but only for the duration of the life estate. In addition, the life estate holder has certain obligations to care for the property and any future interest in it (cannot commit waste). Following a Basic principle of property law that no one may transfer more than the interest that they possess, a life estate owner may not obligate the property beyond his ownership period. Upon expiration of a life estate, the interest transfers to another person. Life estate example: Harry Smith wants to buy a hunting cabin from Sam. However, Sam only has a life estate in the cabin. Henry decides to risk the purchase because Sam is 26 years old and appears to be in good health. Sam dies unexpectedly two years later. Upon Sam's death, Henry no longer has any ownership interest in the hunting cabin. The hunting cabin will either: 1. revert to the original grantor if the grantor deeded the life estate to Sam, but maintained a reversion estate for himself; or 2. pass to a third-party remainderman if one was named in the same deed that granted the life estate to Sam. In short, Sam can only transfer the interest he owns.

Right of survivorship

generally common when one joint tenant dies, the shares of the surviving joint tenants increase. When there is only one surviving joint tenant, she takes the title as the sole owner (in severalty), and can convey the property by deed or leave it to her heirs. Joint tenants cannot pass their interest in the property by will

Fee Estates

highest and most unrestricted ownership interest in land, includes the fee simple estate (exists indefinitely; transferred without restrictions), and the qualified fee/defeasible estates (exists so long as a condition or event does or does not occur; Transfers with conditions). Fee estate example: Patty, a property owner, transfers undeveloped land to her son Sammy, "so long as alcohol is not served on the premises." Sammy has a qualified fee estate because he has fee simple ownership, so long as he does not serve alcohol on land. If Sammy does serve alcohol on the promises, he could lose the property.

Life tenant

holder of a life estate that exists for the duration of his own life. Like other tenants, life tenants cannot: commit waste (improper use or abuse of property; those with a future interest may sue to prevent or cure waste), must maintain the premises for any future interest, must pay any tax or mortgage fees, and may not encumber the property beyond the duration of his life.

Fixture Disputes: Adaptation

if an object was specially ad atop television or made to suit a particular or unique feature of a building, then its a fixture (book case, house key, track lighting, bay windows)

Factors affecting Real Estate Supply and Demand: Cost/Availability of Credit

if mortgage interest rates are low and financing is relatively easy to obtain, the demand for real estate will usually increase.

Creation

in order to create a joint tenancy four elements called unities must occur simultaneously with all owners. The four unities are: title, time, interest, and possession. The unity of title describes how joint tenants must acquire title from the same instrument (same deed or same will). The unity of time describes that all joint tenants must be named at the same time so that their interest vest at the same time. New names cannot be added later. If joint tenants wish to add to their number, they must form a new joint tenancy through a new instrument to establish unity of title. Otherwise, the new tenant will be a tenant-in-common. The unity of interest describes how all joint tenants on one single interest in the land together, equally. That is, they must have the same share in the land for the same duration. If joint tenants create individual interests, they become tenants in common because they lack unity of interest. Finally, The unity of possession describes a joint tenants must have undivided possession of the whole property. That is, they must have equal use of the entire property, and no individual tenant my own any particular portion of the property.

Removing Liens- Basic Concepts: Common Liens

include the following: mechanic's liens (specific, stupors, and involuntary; generally effective when work begins), judgment liens (general, equitable, and involuntary), and attachment liens (property seized and held pending a lawsuit).

Right in real property

includes ownership rights in the surface of land, airspace, below surface, easements(use of land), and use of appurtenant (adjoining) land.

Types of Easements: Easement Appurtenant: Dominant Estate

land owned by a person who has the right to use the land of another, or the person who "benefits" from an easement.

Types of Easements: Easement Appurtenant: Servient Estate

land that is subject to use (the "burden") by joining land.

Estate at sufferance

leasehold that is also known as a tenancy at sufferance. And estate at sufferance exists only in a limited circumstance - when a tenant occupies real estate after his lawful rights have expired. This estate carries the fewest rights, and therefore is the lowest, most encumbered estate in land that one can own. The estate at sufferance runs until the tenant vacates or the landlord decides to take action. Termination does not require notice. The most common estate at sufferance is created by a holdover tenant. A seller or renter who does not move out at the appointed time creates an estate at sufferance

Estate at will

leasehold that is also known as a tenancy at will, which exists when a tenant is in lawful possession of real estate with no definite time specified as to when he will vacate, and no particular recurring period such as month-to-month. That is, the estate may be terminated at any time by either party. Example, it may be terminated by sale of the property, by death of either party, or by notice of either party

Estate from year-to-year (periodic)

leasehold, also referred to as tenancy from year to year or periodic a state, which runs for a specified period of time and automatically continues from one period to the next unless either party terminates. Note the difference from the estate for years, which automatically terminates at the end of a specified period. The term "year" is deceiving -the term of the lease can be less than a year. A month to month or week to week rental that automatically extends to the next month to month or week to week period is an example of an estate from year-to-year. A periodic tenancy requires proper notice to terminate, and renews automatically from time period to time period unless properly terminated

Trust

legal arrangement whereby property is committed to the care of another, subject to specific rules and instructions. Property is conveyed by a "truster" (grantor) to a "trustee". The trustee holds title to the property and must manage it for the benefit of another, called the beneficiary. The trustee is a fiduciary and has a duty to protect, preserve, and enhance the value of property in her care. A trustee can be an individual or corporation such as a bank. A trust can be established by will, by a trust agreement, Or by deed in trust

Removing Liens- Basic Concepts: Scope of Liens

liens may be general (applies to individual debtor and all of his personal and real property), such as federal tax liens and some judicial liens, or specific (applies to specific property of the debtor only), such as mortgages, property tax, and mechanic's liens.

Types of Easements: Easement in Gross

limited right of one person to use the land of another. Easement in gross (sometimes called "personal easement in gross") our property rights held by specific persons. Unlike easements appurtenant , Personal easement in gross have a servient estate, but no dominant estate. Thus, the primary distinction between an easement appurtenant and an easement in gross is that the burn does not transfer with the land and the benefit cannot be transferred by the holder of the easement. However, commercial easement in gross to run with the land example cable, telephone, or gas company easements.

Common interest ownership properties: Condominiums

method of ownership governed by state law, which consists of single units in a multiunit real estate development. State condominium laws are often referred to as horizontal property acts or condominium acts. 1. Ownership: an individual or other entity such as a corporation holds title to individual units in fee simple. Each condominium owner has an exclusive ownership of his individual units and therefore can mortgage, sell, will, or gift each unit separate and independent of all other units, common areas are owned by the individual unit owners as tenants in common, which means that all of the unit owners enjoy unity of possession, and they are all responsible for maintenance and care. 2. Taxes and assessments: units are assessed and text separately. The assessment for each unit is based on the value of the unit combined with the value of that unit's proportionate share of the common areas. If a condominium unit is the subject of a judgment that results in foreclosure, the foreclosure only affects the individual unit in default. 3. Common areas: tenants enjoy the unity of possession (tenants in common). In addition to individual lots, condominiums generally include common areas. Common areas include the land on which the building sets, the shell of the building and each units walls, hallways, stairways, elevators, lobby, garages, swimming pools, and tennis courts. A common wall is a wall separating to live in units in a condominium that is part of the common area. 4. Creation: state laws govern the development, marketing, sale, ownership, and management of horizontal slices of airspace. Horizontal property and condominium acts impose several requirements on developers and owners. 1. Condominium Intruments: Must be recorded by a condominium developer in order to create a condominium, as a matter of state condominium or horizontal property laws. Condominium intruments include but are not necessarily limited to, the declaration (or master deed(, plats and plans, by-laws providing for self-government by a unit owners' association, and public offering Siemens's (disclosures to prospective buyers). 2. Government: Unit owner's association with enforcement authority over bylaws, restrictive covenants, rules, and regulations.

Tenancy in common

most common form of co-ownership, which is assumed unless some other form of Tenancy is clearly identified. Co-tenants in a tenancy in common generally hold title to property in fee simple and in their own names. Each co-tenant may have equal or unequal ownership interest, but each co-tenant including fictitious person's has a unity of possession. While a joint tenancy requires all four unities, the tenancy in common requires only one — The unity of possession. The unity of possession means that no cotenant can exclude another cotenant, and no cotenant may claim ownership of any specific part of the property. Therefore, even if tenants-in-common own unequal shares, their percentage of ownership is a percentage of the whole. Tenants in common have an undivided interest in the whole property. The primary difference between a tenancy in common and joint tenancy is that there is no rights of survivorship. That is, each tenant in common can pass title to another outside the tenancy in common upon his death. Because there is no right of survivorship, and owner can transfer his interest in a tenancy in common by will. 1. Compared to joint tenancy: no right of survivorship (only one unity - possession.) 2. Possession: all have the same right to possess the whole, even though their interest (percentage of ownership) in the whole may be different. 3. Transfer of interest: may pass by Will or sale (unlike joint tenancy). Tenancy in common example: Dye, Donald, Walton, and Catherine all by farmland as joint tenants's. Guy decides there is no future in farming and sells his interest to Farmer Brown. Farmer brown now has a quarter interest in the farm and holds title as a tenant in common to Donald, Walton, and Catherine. However, Donald, Walton, and Catherine hold an undivided recorder interest as joint tenants. Tenancy in common example: Jones in Smith buy a house and 2 acres as tenants in common. Jones puts up three quarters of the money so he owns three quarters of the house and three quarters of the two acres, while Smith owns a quarter of the house and a quarter of the 2 acres. Both have equal rights to possess the entire property, but if the house sells, Jones will get three quarters of the profits or losses, while Smith will only get a quarter.

Estates in land

n the state describes the degree, quantity, nature, and extent of an ownership interest in real property. Everyone who holds title to real property has an estate, which simply describes his or her legal interest in the property. One does not necessarily own land, but instead owns an estate or(interest) in land that may be bought and sold. There are four broad categories of the states: freehold estates, future estates, non-freehold (leasehold) estate, and statutory states. There are multiple variations on each category of estate.

Property transfer (alienation) voluntary or involuntary. Alienation

referring to any type of transfer of ownership of real property. Alienation can be accomplished voluntarily by deed, will, public grant, or involuntary through eminent domain/foreclosure. Generally, courts won't enforce restraints on alienation (limitation on right to transfer property) unless restraints are reasonable and limited duration. Right to dispose or transfer real property from one owner to another is one of principal legal right os prop ownership (bundle of legal rights). Fundamental rule of property transfer is people can't transfer a greater interest than they possess. A Title documents one's right in, or ownership of, an estate in land and a Title Search serves to document exactly what interest one has to transfer. The word title also refers to evidence of ownership of land such as a deed

Reversion estate

remaining estate that returns, or reverts, to the grantor (seller) after a grantor has conveyed a lesser estate (less than a fee interest) to someone else (grantee). It's similar to a remainder estate, but the recipient is the grantor. Because A reversion estate is created by operation of law no express words of creation are necessary. Reversion estate example: Whitehead conveys a life estate to his aunt Catherine, but does not specify any remaindermen. Upon his aunt Catherine stuff, the property will automatically revert to Whitehead the grantor for his errors this is true because we had retained a reversing the state in the property, simply by failing to name a remainderman

Tenancy by the entirety

special joint tenancy that place is title to property in the marital unit. As such, the tenancy by the entireties can exist only between spouses. Tenancy by the entirety is derived from the common law premise that spouses are a single legal entity. The method of property ownership is very nice in less than one third of states. The primary difference between a tenancy by the entirety and a joint tenancy is that unlike a joint tenant, a tenancy by the entirety exist so long as the spouse is alive and they remain married. However, spouses can terminate a tenancy by the entirety by mutual agreement, divorce, or joint conveyance (such as a sale.) Each spouse owns the entire estate. This type of ownership is often used to escape probate - if one spouse dies, by law, the survivor automatically succeeds to sole ownership (like joint tenancy). Also, creditors of one spouse may not force the sale of property where ownership is held by the entireties. 1. Ownership: each spouse owns the entire estate, survivor takes all. 2. Compares to a joint tenancy: both have Right of survivorship and the 4 unities, but tenancy by entirety cannot be terminated so long as parties remain married

Fixture Disputes: Method of Attachment

the permanence with which an object is attached to real property is a factor in determining whether it may be removed. The mor permanent the attachment (built-ins), the less likely it may be severed. Ex: Freestanding refrigerator is likely personal property, built in is more likely to be fixture.

Leases

transfers the right of exclusive use and possession (but not ownership) of real estate for a specified period of time from the landlord to the tenant. By transferring the right of use, a lease creates a legal interest in real property. However, because a lease does not convey ownership, it is classified as personal rather than real property. Contracts for lease may be written or oral (oral so as long as they are for one year or less), bilateral, executory, and sometimes assignable for definite or indefinite period of time, depending upon the type of tenancy.

Encroachments

unauthorized physical intrusion that encumbers the land of another. An encroachment is a trespass if it encroaches on the land (a fence or driveway), and a nuisance if it violates a neighbors air space (as in the case of overhanging tree branches, loud noises, or bright lights). A survey will identify some encroachments.