chapter 7 real estate property rights, fixtures and ownership

“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner

Chapter 7

Real Estate Property Rights, Fixtures and Ownership


Major Topics What is real property? Legal methods of Property

description Holding title to the real property Property owner rights

Surface, Water, Air Duration of ownership Fixtures Subsurface

Forms of ownership


Surface of Land

Attachments to that surface

Area beneath surface

Rights in the air

Real Property Includes More Than Just Land


Water Rights

Riparian System

Doctrine of prior appropriation

The state owns the land ownership of land located beneath the river


Fixtures Items that are attached to real property

and have become integral part of the building’s function

An item classified as fixture is transferred as part of real property

Determining whether an item is a fixture or not: Intent Attachment Uniqueness or adaptation to the

property Ownership


Subsurface Rights

Mineral Rights Oil and Gas

Air Rights

Right to Light


Legal Description Necessary for Transfer of Property

Importance of legal descriptions Metes and Bounds System Rectangular Survey System Plat Maps and Survey G.P.S.


Metes and Bounds


Rectangular Survey System


Plat Maps and Survey Most common in major urban

areas, esp. residential A survey is done to establish the

proposed land development The general shape of the lot is

drawn on the plat map The Plat map is typically recorded

in the local county courthouse and a book and plat number assigned


Plat Map Illustrated

1

1

1

1

1

1

1

1

1

1

1

1

1

1

1

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1 2 3 4 5

6 7 8 9 10

120.6’

175.5’ 175.8’

120.9’

Casey Hambleton Lane

For Apple Orchid Plat #389 Book# 210 Page 17


Geographic Positioning Systems Latitudes and Longitudes G.P.S. (Global Positioning System) accuracy of 2

feet


The Freehold Estates

Fee simple or Fee simple absolute Fee simple determinable Fee simple subject to a condition

subsequent Fee simple defensibles Life estate

Tax benefits

Co-Ownership & Business Ownership


Tenants in common Joint tenancy Tenancy by the entirety Community Property Trust Multi-Unit Ownership

Condominiums and Landominiums Cooperative Townhouses or Landominiums Time Sharing

Business (Investors): General Partnerships Limited Partnerships Corporations and S-Cooperations Limited Liability Corporations Real Estate Investment Trusts

Tenancies in Common


‘Tenants in common’ hold title together to same property

Each has an individual interest in the property

Joint Tenancies


Four unities of a joint tenancy:Time, Title, Interest & Possession

Joint tenants must own equal shares

Joint tenants must have equal right of possession

Tenancy by the Entirety


A joint tenancy with one additional unity: Marriage

A tenancy by the entirety with right of survivorship between husband and wife

Not recognized by all states of U.S.

Community Property


A system of marital property ownership (Spanish origin)

Both spouses contribute equally to the benefit of the property as “community property”

Trust Three-party arrangement in which legal and

equitable title to property are separated Owner (trustor) transfers title to trustee with the

responsibility of administering the property and distributing income to the beneficiaries of the trust

Condominiums


A condominium owner holds a ‘fee simple’ interest in the unit he/she occupies

Right to sell, lease, mortgage and convey by will the condominium interest

When the development includes separate fee simple ownership of lots upon which the condominium unit is placed and also shared common areas, the it is referred as “landominium” Created by CCR


Cooperatives The dwellers of a multi-housing

own an undivided interest in their unit through their ownership of a corporation (shares) that owns the entire land and building

Cooperative affords existing owners more control over the transfer of the units

Time-Sharing Properties


A time share interest in real property for a limited duration at a fixed time each year (recreational lease)

Most commonly seen in resort areas to allow the exclusive use of the premises for vacational purposes

General Partnerships


Partnership (UPA): “voluntary association of two or more persons as co-owners in a business for profit”

Partnership (IRS): “a syndicate, group, pool, joint venture, or other unincorporated association”

Limited Partnerships


At least one partner has full and complete liability and is known as “general partner”

Liability of other “limited partners” is limited to their capital contribution to the partnership

Corporations


A corporation is a non-human entity with permanent legal existence and is owned by individual investors

S Corporation Internal Revenue Code permits

slight variation on the “double taxation” by flowing its income and losses through its shareholders

Limited Liability Companies (LLC)


A statutorily-created entity offering limited liability of corporation and flow-through advantage of partnership

Pays no federal taxes on its income. All income and losses flow through owners (members/shareholders)

REITs


Real Estate Investment Trust: A statutory entity that permits investors to hold diversified real estate holdings by being beneficiaries in a trust

REITs might be “public” or “private”


Non-Possessory Interests in Land

Easements Profits License Security Liens

Covenants and Deed Restrictions


Easements “A right to another’s property” Easement appurtenant Easement in gross Express easement Implied easement (or Easement by necessity) Easement by prescription

road

Easement across A

Servient Tenement A

DominantTenement B

Water

END


chapter 7 real estate property rights, fixtures and ownership

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