Chapter -3

Subsurface Rights

- Minerals -Oil/ Natural Gas - Aquifer

Uses of Real Property

- Residential - Commercial - Industrial - Vacant Land

The owner of a Fee Simple may?

1. Pledge the property as security for a debt (mortgage) 2. Convey the property to another 3. Convey a leasehold to another party 4. Grant an easement 5. Grant a license/ permission to conduct some activity on the land

Full Bundle of Rights include ?

1. The right to quiet enjoyment 2. The right to dispose of the property by gift 3. The right to sell the property by deed or by will 4. The right to control the use of the property (only within legal limits)

C Corp is always taxed at ?

35% with an exception of double taxation

Joint Venture

A business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity

Cooperative

A corporation

Curtesy

A husband's interest upon the death of his wife in the real property of an estate that she either solely owned or inherited provided they bore a child capable of inheriting the estate

Estate for Years

A leasehold estate for any specific period of time. An estate for years is not automatically renewed.

What type of loan is taken out to purchase a cooperative?

A note/ security agreement

Trustor

A person who conveys title to a trustee

Parcel

A piece of land under one ownership

Fee Simple Estate

Absolute ownership of real property; a person has this type of estate where the person is entitled to the entire property with unconditional power of disposition during the person's life and descending to the person's heirs or distributees

Personal Property

All of someone's property except land and those interests in land that pass to their heirs

Trust

An arrangement whereby a person (a trustee) holds property as its nominal owner for the good of one or more beneficiaries

An Estate of Years automatically renews for how many years?

An estate for years does NOT automatically renew

Tendency in Common

An ownership of real property by two or more persons, each of whom has an undivided interest, without the "right of supervivorship"

Pass- Through Tax Entity

Any profits earned by the company are passed through the LLC and paid at the personal level

Which is more popular for investor ownership ( cooperative or condominiums)?

Condominiums

Act of waste

Describes a cause of action that can be brought in court to address a change in condition of a property brought about by a current tenant that damages or destroys the value of that property

Unities of Interest, Possession, Time & Title

Describes the conditions that must exist in order for certain kinds of property interests to be created

Why does a cooperative generally sell less per square foot?

Due to the fact that it comes with a limited bundle of rights

Why does a condominium generally sell at a higher price per square foot ?

Due to the fact that it comes with the full bundle of rights

Why do banks usually not grant mortgages on Cooperative?

Due to the fact the a cooperative is not real property

A leasehold estate for any specific period of time is known as what ?

Estate for years

An estate which the tenant holds his own right , without being joined in interest with any other person is known as ?

Estate in Severalty

In this type of estate, the owner is entitled to the entire property with unconditional power of disposition during the owner's life and descending to the owner's heirs or distributees?

Fee Simple Estate

Personal property so attached to the land or improvements as to become part of the real property is known as ?

Fixture

Which of the following is an economic characteristic of real property ?

Immobility

Banks typically do NOT lend on this type of trust?

Irrevocable Trusts

Real Estate/Real Property

Land and generally whatever is erected upon or affixed thereto

This type of ownership is common among real estate investors ?

Limited Liability Company

Which of the following land rights is associated with a stagnant body of water ?

Littoral Rights

Severalty

Ownership by only a single individual

Leasehold Estate

Ownership of a temporary right to hold land or property in which a lesser or a tenant holds rights of real property by some form of title from a lessor or landlord

Joint Tenancy

Ownership of real property by two or more persons, each of whom has an undivided interest with the "right of survivorship"

An LLC can serve as a ?

Pass - Through Tax Entity

What do you get with a cooperative ?

Personal property (intangible property) - stock certificate

Fixture/Trade Fixture

Personal property so attached to the land or improvements as to become part of the real property

Chattel

Personal property, such as household goods

Special Purpose Real Estate

Property that is appropriate for one type of use or limited use. This type of property has unique design or layout, uses special construction materials or other features that limit the property's utility for purposes other than the one for which it was built. For example, a church a

In regards to financing, banks are more favorable towards what type of trust?

Revocable Trusts

Air Rights

Rights in real property to use the space above the surface of the land

A property owner's rights to the water and other substances below the surface of the land is known as ?

Subsurface Rights

Who reviews the buyer in a cooperative?

The board will review the buy extensively in a cooperative

Illiquidity

The concept that property is an illiquid asset because it cannot easily be sold or exchanged for cash

Life Estate

The conveyance of title of property for the duration of the life of the grantee

Partition

The division which is made of real property between those who own it in undivided shares

Undivided Interest

The interest in property owned by tenants whereby each tenant has an equal right to enjoy the entire property

Reversionary Interest

The interest which a grantor has in lands or other property upon the termination of the preceding estate

Dower

The part of or interest in real estate of a deseases husband given by law to his widow during her life

Beneficiary

The person who receives or is to receive the benefits resulting from certain acts

Bundle of Rights

The premise that the ownership of real estate consists of the ownership of various rights associated with it. These rights include the right to use and /or occupy, the right to sell in whole or in part, the right to lease, the right to bequeath and the right to do none of the foregoing

Bundle of Rights

The premise that the ownership of real estate consists of the ownership of various rights associated with it. These rights include the right to use and/or occupy, the right to sell in whole or in part, the right to lease, the right to bequeath and the right to do none of the foregoing

Escheat

The reversion to the State of property in event the owner thereof abandons it or dies, without leaving a will and has no distributees to whom the property may pass by lawful descent.

Riparian Rights

The right of a property owner whose land borders a natural water course, such as a river, to reasonable use and enjoyment of the water that flows past the property. Riparian literally means "riverbank"

Littoral Rights

The right of a property owner whose land borders on a body of water , such as a lake ocean or sea, to reasonable use and enjoyment of the shore and water the property borders on

What occurs in a 'Joint Tenancy' when one of the share owners dies ?

Their share of ownership is distributed to the other join tenant(s), NOT the estate of the deceases

Why are LLC's predominantely used ?

To protect a company's assists from liability

Which is stronger, the deed's 'bundle of rights' (Fee Simple) or the 'Contract of Rights'

'Bundle of Rights'

The right for a property owner to use space above the surface of their land is known as ?

Air Rights

Trustee

Any person who holds property, authority, or a position of trust and responsibility for the benefit of another

Personal property, or anything not considered real property is known as ?

Chattel

The concept that property is an asset that cannot easily be sold or exchanged for cash is known as what ?

Illiquidity

LLC

Limited Liability Company

Church, Theaters, or Schools are examples of what?

Special Purpose Real Estate

Although many factors affect the value of real property, what is the primary driver in determining the value of real property?

Supply and Demand

Ownership of real property by a married couple in which interests cannot be transferred without the consent of the other spouse is known as ?

Tenancy by the Entirety

Which of the following is a condition that may cause a fee Simple absolute to become a fee Simple defeasible?

The owner grants the property to another entity for a specific use and period of time

Remainder Interests/ Remainderman

The person who is to receive the property after the termination of the prior estate