RE Fundamentals CHAPTER ONE TERMS: Land, Real Estate and Real Property: Understanding the Difference
The rights in real property to the reasonable use of the air space above the surface of the land. Includes the right to use, control, or occupy the space above a designated property. Can also be leased, sold, or donated to another party. The right to use, sell, or lease space above the earth. - The government permits reasonable interference, for example an aircraft or space craft. - Is relevant as solar power becomes more significant and technologically advanced. - May potentially cause legal issues, e.g., if a skyscraper is built that blocks another adjacent property's solar panels. EXAMPLE: In New York City, Hudson Yards leases their space above a rail yard, which includes buildings and towers.
Air Rights [FUN 1.1]
All of the legal rights incident to ownership of property including the rights of use, possession, encumbrance, and disposition. The theory that ownership of realty implies a group of rights such as occupancy, use/enjoyment, to sell, bequeath, give, or lease all or part of these rights. Example: Abel may sell mineral rights, hunting rights, easements, and other partial interest(s), or give a life estate to his wife with the remainder to his daughter. Metaphor explaining the complexities of home ownership beyond simply acquiring rights to the property. The legal rights, or interests that an individual has in a particular piece of property. Refers to all of the legal rights associated with the ownership of property, including (1) possession, (2) disposition, (3) use, (4) encumbrance, and (5) quiet enjoyment. Think of these rights as a "bundle of sticks", where each stick represents a different legal right. - The more sticks an owner possesses, the more rights they have to the property. - These rights give a buyer the freedom to use the property within the limits of the law. Commercial property investors may share some or all of these rights with other parties.
Bundle of Rights [FUN 1.1]
Goods or every species of property movable or immovable which are not real property. Personal property.
Chattel [FUN 1.2]
The crops and other annual plantings considered to be personal property of the cultivator.
Emblements [FUN 1.2]
Appurtenances attached to land or improvements, which usually cannot be removed without agreement as they become real property; examples - plumbing fixtures, store fixtures built into the property, etc.
Fixtures [FUN 1.2]
The materials of the earth, whatever may be the ingredients of which it is composed, whether soil, rock, or other substance. Includes free or unoccupied space for an indefinite distance upwards or downwards. Includes: appurtenances, trees, bushes, grass, boulders, crops, flowers, etc. The surface of the earth; any part of the earth's surface. - Example: extent of REAL PROPERTY where AIR RIGHTS may be limited to some defined altitude, and is distinguished from added IMPROVEMENTS. A specific piece of earth, a property with clearly defined boundaries that has an owner. - This term encompasses all physical elements, bestowed by nature, to a specific area or piece of property - the environment, fields, forests, minerals, climate, animals, and bodies/sources of water. - Natural resources entitle the owner of the property to plants, soil, minerals, geographical location, electromagnetic features, geophysical occurrences, etc. Can refer to real estate or property, minus buildings and equipment, which is designated by fixed spatial boundaries. - Economically, is a primary factor of production in addition to capital and labor. - Value increases if featuring other natural resources, such as oil and gas. -> Investing for development can be costly and may include some risks, but can be a valuable source of profits and appreciation. -> The associated risks for development can stem from taxation, regulatory use restrictions, leasing/selling, or even natural disasters.
Land [FUN 1.1]
A landowner's right to receive a portion of the profits of any deposits extracted from the land. The privilege of gaining INCOME from the sale of oil, gas, and other valuable resources found on land. - Contrast SURFACE RIGHTS, AIR RIGHTS EXAMPLE: Abel purchases a property that contains underground oil deposits. He may: - Develop by drilling a well - Sell the rights for a price to an oil company - Lease in exchange for a royalty Ownership rights to underground resources such as fossil fuels [oil, natural gas, coal, etc.], metals/ores, and mineable rocks such as limestone and salt. - Entitle owners to possess and exploit any natural resources found beneath the land. - Are ownership claims against the natural resources located below the surface of a plot of land - In the U.S., these rights are separate or "severed" from surface rights, including: Texas, Oklahoma, Pennsylvania, Louisiana, Colorado, and New Mexico The fact these rights can be privately owned in the U.S. means that homeowners with rights to valuable resources on their property can sell these rights to private corporations, sometimes generating substantial up-front or ongoing ROYALTY PAYMENTS by doing so. - A common example of such transactions involves properties located on subterranean oil reserves, which can attract purchase offers from oil extraction companies. - Generally, the attractiveness of these mineral rights - and, therefore, the royalties that private landowners can obtain for them - is heavily dependent on the price of oil. - When oil prices are high, unconventional methods of oil extraction become more economical, raising the value of mineral rights.
Mineral Rights [FUN 1.1]
Any property which is not real property.
Personal Property [FUN 1.2]
Land plus anything permanently attached to land. Legally considered to be land and everything more or less attached to it. - Ownership below the center of the earth and above to the heavens. In business, the activities concerned with ownership and use transfers of the physical property. - The following are engaged in such business activities: accountants, appraisers, brokers, counselors, government regulators, mortgage brokers, mortgage lenders, salespersons, surveyors, and title companies. Land and any permanent structures, like a home, or improvements attached to the land, whether natural or man-made. A form of REAL PROPERTY; differs from PERSONAL PROPERTY, which is not permanently attached to the land [such as vehicles, boats, jewelry, furniture, and farm equipment]. - Considered REAL PROPERTY that includes land and anything permanently attached to or built on it, whether natural or man-made. - Includes 5 main categories: (1) residential, (2) commercial, (3) raw land, (4) industrial, and (5) special use. - Indirect investments can be made via REITs or through pooled investments. Any additions or changes to the land that affects the property's value are called IMPROVEMENTS.
Real Estate [FUN 1.1]
Land, things affixed to land, appurtenances, plus, the bundle of rights. The rights to use real estate. Examples include [but are not limited to]: - a personal residence owned in FEE SIMPLE - a LIFE ESTATE to a farm - rights to use land under a LEASE - EASEMENTS and other partial interests A parcel of land and everything permanently attached to the land where the owner has all rights of ownership, including the right to possess, sell, lease, and enjoy the land. - May be classified according to its general use as residential, commercial, agricultural, industrial, or special purpose. - In order to understand what rights an owner has to sell their home, he/she needs to know what rights they possess - or don't possess - in the property. For practical purposes this term is synonymous with REAL ESTATE, but is more broad as it encompasses the interests, benefits, and rights inherent in ownership. - Includes the physical land [the surface and what lies below and above it], everything that is permanently attached to it, whether natural or artificial - plus all the rights of ownership, including the right to possess, sell, lease, and enjoy the land. - Each state has its own laws regarding what this term encompasses and how to handle its sale. - For the most part is not subject to federal law because real estate by definition does not move across state borders.
Real Property [FUN 1.1]
Articles of personal property annexed by a business tenant to real property which are necessary to the carrying on of a trade and are removable by the tenant.
Trade Fixture [FUN 1.2]