Chapter 49Chapter 49

Real PropertyReal Property

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Real Property Real Property (Definition):(Definition):

Land, including anything Land, including anything permanently affixed to the permanently affixed to the

landland

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““Fixture” (Definition):Fixture” (Definition):

Any item that was originally a Any item that was originally a piece of personal property, but piece of personal property, but became part of realty after it became part of realty after it

became permanently attached to became permanently attached to real propertyreal property

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Exceptions To “Fixture” Status:Exceptions To “Fixture” Status:

Written agreement between parties that specific Written agreement between parties that specific items will continue to be treated as personal items will continue to be treated as personal property property

Personal property attached to realty for use of a Personal property attached to realty for use of a business renting property (in a commercial lease business renting property (in a commercial lease arrangement)arrangement)

Such property is known as a “trade fixture”Such property is known as a “trade fixture”

Example: Barber chairs in a barber shopExample: Barber chairs in a barber shop

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Interests In Real PropertyInterests In Real Property

Fee Simple Absolute: Right to possess for life Fee Simple Absolute: Right to possess for life and devise (will) to heirs upon death; the most and devise (will) to heirs upon death; the most complete interest in real propertycomplete interest in real property

Conditional Estate: Interest comparable to fee Conditional Estate: Interest comparable to fee simple absolute, except that interest will simple absolute, except that interest will terminate on occurrence/non-occurrence of a terminate on occurrence/non-occurrence of a specified conditionspecified condition

Life Estate: Granted for lifetime of an Life Estate: Granted for lifetime of an individual; right to possess property terminates individual; right to possess property terminates upon life estate holder’s death, and property will upon life estate holder’s death, and property will pass to another party designated by original pass to another party designated by original grantorgrantor

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Interests In Real Property Interests In Real Property (Continued)(Continued)

Future Interest: Person’s right to property Future Interest: Person’s right to property ownership and possession in the futureownership and possession in the future

Leasehold Estate: Right to possess property for Leasehold Estate: Right to possess property for a stipulated period of timea stipulated period of time

Easement: Irrevocable right to use a portion of Easement: Irrevocable right to use a portion of another’s land for a specified purposeanother’s land for a specified purpose

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Nonpossessory EstatesNonpossessory Estates

Easement: Irrevocable right to use some part of another’s Easement: Irrevocable right to use some part of another’s land for a specific purpose without taking anything from land for a specific purpose without taking anything from the landthe land

Example: Utility easementExample: Utility easement

Profit: Right to enter another’s land and take part of the Profit: Right to enter another’s land and take part of the land, or take away a product of itland, or take away a product of it

Example: Right to harvest timberExample: Right to harvest timber

License: Temporary, revocable right to use another’s License: Temporary, revocable right to use another’s propertyproperty

Example: Theatre ticketExample: Theatre ticket

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Co-Ownership Of Real PropertyCo-Ownership Of Real Property

Tenancy In Common: Equal/unequal shares may be held, Tenancy In Common: Equal/unequal shares may be held, creditors can attach any owner’s interest, and deceased creditors can attach any owner’s interest, and deceased owner’s share is transferred to heirsowner’s share is transferred to heirs

Joint Tenancy: Equal share, creditors can attach any Joint Tenancy: Equal share, creditors can attach any owner’s interest, and deceased owner’s share owner’s interest, and deceased owner’s share reapportioned equally among surviving joint tenantsreapportioned equally among surviving joint tenants

Tenancy By The Entirety: Available to married couples Tenancy By The Entirety: Available to married couples only; shares are equal, one owner’s creditors cannot attach only; shares are equal, one owner’s creditors cannot attach property, and deceased owner’s share passes to surviving property, and deceased owner’s share passes to surviving spousespouse

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Co-Ownership Of Real Property Co-Ownership Of Real Property (Continued)(Continued)

Condominium Ownership: Owner Condominium Ownership: Owner acquires title to a “unit” within a building, acquires title to a “unit” within a building, with undivided interest in the land, with undivided interest in the land, buildings, and improvements of the buildings, and improvements of the common areas of the developmentcommon areas of the development

Cooperative Ownership: Investor resident Cooperative Ownership: Investor resident acquires stock in the corporation owning acquires stock in the corporation owning the facility and receives a permanent the facility and receives a permanent lease on one unit of the facilitylease on one unit of the facility

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Voluntary Transfer of Real Voluntary Transfer of Real PropertyProperty

Requires:Requires:

Execution—preparation and signing of deed;Execution—preparation and signing of deed;

Delivery—of deed to grantee, with intent of Delivery—of deed to grantee, with intent of transferring ownership to grantee;transferring ownership to grantee;

Acceptance—grantee’s expression of intent to Acceptance—grantee’s expression of intent to possess and own propertypossess and own property

Recording—filing deed with appropriate county Recording—filing deed with appropriate county office to protect interests of granteeoffice to protect interests of grantee

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Deed RequirementsDeed Requirements

Identification of grantorIdentification of grantor

Expression of grantor’s intent to convey the Expression of grantor’s intent to convey the propertyproperty

Legally sufficient description of the property Legally sufficient description of the property (including its physical boundaries and any (including its physical boundaries and any easements)easements)

Any warranties/promises made by grantor with Any warranties/promises made by grantor with the conveyancethe conveyance

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General Warranty DeedGeneral Warranty Deed

Contains the following promises/representations:Contains the following promises/representations:

Grantor owns interest he/she is conveyingGrantor owns interest he/she is conveying

Grantor has right to convey the propertyGrantor has right to convey the property

No mortgages/liens against property that are not stated in No mortgages/liens against property that are not stated in deeddeed

Grantee will not be “disturbed” by anyone who has better Grantee will not be “disturbed” by anyone who has better claim to property title, with promise to defend grantee’s claim to property title, with promise to defend grantee’s title against such claims, or to reimburse grantee for any title against such claims, or to reimburse grantee for any money spent in defense and/or settlement of such claimsmoney spent in defense and/or settlement of such claims

Grantor will provide grantee with any additional Grantor will provide grantee with any additional documents that grantee needs to perfect his/her title to documents that grantee needs to perfect his/her title to propertyproperty

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Other Types of Deeds:Other Types of Deeds:

Special Warranty Deed: No representation of Special Warranty Deed: No representation of guarantees contained in “general warranty” guarantees contained in “general warranty” deed; grantor is merely promising that he/she deed; grantor is merely promising that he/she has not done anything to lessen value of property has not done anything to lessen value of property transferredtransferred

Quitclaim Deed: No warranties; grantor simply Quitclaim Deed: No warranties; grantor simply conveys whatever interest he/she holdsconveys whatever interest he/she holds

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Types of Involuntary Transfers:Types of Involuntary Transfers:

Adverse Possession: When person openly treats Adverse Possession: When person openly treats real property as his/her own, without real property as his/her own, without protest/permission from real owner, for protest/permission from real owner, for statutorily-established period of time, ownership statutorily-established period of time, ownership is automatically vested in that personis automatically vested in that person

Condemnation: Government acquires ownership Condemnation: Government acquires ownership of private property for “public use” for “just of private property for “public use” for “just compensation” over the protest of the property compensation” over the protest of the property ownerowner

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Restrictions On Land UseRestrictions On Land Use

Restrictive Covenants: Promises to Restrictive Covenants: Promises to use/not to use land in particular waysuse/not to use land in particular ways

Zoning: Restriction of use of property to Zoning: Restriction of use of property to allow for the orderly growth and allow for the orderly growth and development of community and to protect development of community and to protect “health, safety, and welfare” of its citizens“health, safety, and welfare” of its citizens

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