Unit 2 - Lesson 1 (Real Property and the Law)
Terms in this set (56)
(no improvement) defined as the earth's surface extending downward to the center of the earth and upward to infinity. Not only the surface but also the underlying soil. Also refers to objects that are naturally attached t the surface.
Minerals and substances that lie far below the earth's surface
air above the earth, all the way up into the space
(land with improvements) defined as land at, above, and below the earth's surface, plus all things permanently attached to it. Includes the natural land along with all human made improvements
any artificial addition to land such as a building or a fence
whether the artificial attachment makes the property better looking, more useful, or more or less valuable, the land is said to be improved
Land may be improved by -
streets, utilities, sewers, and other additions that make it suitable for building
( land with improvements plus rights) is the interests, benefits, and rights that are automatically included in the ownership of land and real estate
Real property includes -
surface, subsurface, airspace, any improvements, and the bundle of legal rights
Bundle of legal rights -
rights of possession, right to control the property, right of enjoyment, right of exclusion, right of disposition
Right of disposition
to sell, will, transfer, or otherwise dispose of or encumber the property
Right of exclusion
to keep others from entering or using the property
Right of enjoyment
that is to use the property as the owner wishes within the framework of the law
Right to control the property
within the framework of the law
anything associated with the property, although not necessarily a direct part of it. Is connected to the property, and the ownership of the appurtenance normally transfers to the new owner when the property is sold.
Examples of appurtenance
parking spaces in multiunit buildings, easements, water rights, and other improvements
the right to use the surface of the earth
rights to the natural resources lying below the earth's surface
Owner may transfer surface rights without transferring the subsurface rights
rights to use the open space above a property, usually allowing the surface to be used for another purpose
Real estate possess see seven basic characteristics that define -
its nature and affect if use
Two broad categories
economic and physical
scarcity, improvements, permanence of investment, location; affect its investment value
total of available supply of land is not limitless
building an improvement on one parcel of land can affect the land's value and use, as well as that of neighboring tracts and the whole communities.
Permanence of investment
the capital and labor used to build an improvement represent a large fixed investment.
The persoanl preference of people for one area over the another
What is the most important economic characteristic of land?
Land has there main physical characteristics
Immobility, indestructibility, uniqueness
the geographic location of any given parcel of land can never be changed; it is fixed or immobile
land is also indestructible; this permanence of land, coupled with the long term nature of most improvements, tends to stabilize investments in real estate
Property may be classified as -
Real or personal
property that is movable and not affixed to or associated with the land; basically personal property includes all property except real property
items of personal property, including such tangibles as chairs, tables, clothing, money, bonds, and bank accounts, also trade fixtures
defined as dwellings that are built off site and trucked to a building lot where they are installed or assembled
Manufactured housing includes -
modular, panelized, precut, and mobile homes
annually cultivated crops such as wheat, corn, veggies, and fruit; generally considered personal property.
Trees, perennial shrubbery, and grasses that do not require annual cultivation
considered real estate
Changing an item of real estate to personal property by detaching it from the land; for example, cutting down a tree
Method of converting personal property into real property; example: using cement, stones, and sand (personal property) to build sidewalk (real property)
A written instrument that, when executed and delivered, conveys title to or an interest in real estate
Bill of sale
a legal document that transfers personal property
Real property is conveyed by -
Personal property is conveyed by -
bill of sale
is personal property that has been so affixed to land or a building that, by law, it becomes part of the real property.
Example of fixture property
heating systems, elevator equipment in high-rise buildings, radiators, kitchen cabinets, attached bookcases, light fixtures, doors, and plumbing fixtures; any items that has been added as a permanent part of a building is considered fixture
In determining intent, Courts use 3 basic test to consider if it's a fixture or personal property
Method of attachment, adaptation to real estate, agreement
Method of attachment
can the item be removed without causing damage to the surrounding property
Adaption to real estate
is the item being used as real property of personal
have the parties agreed in writing on whether the item is real or personal? What does the contract say?
Trade fixture or chattel fixture
An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires
Trade fixture differ from other fixtures in two ways -
are usually owned and installed by a tenant for the tenant's use & are removable
Examples of trade fixtures
bowling alleys, store shelves, bars, restaurant equipments; agricultural fixtures such as chicken coops and tool sheds also are included in this category
Trade fixtures must removed -
on or before the last day of the lease term
trade fixtures that are not removed become the real property of the landlord; acquiring the property in this way
The act of taking a person's property into legal custody by writ or other judicial order to hold it available for application to that person's debt to a creditor
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