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Terms in this set (29)

Subsurface rights of real property include: the right of the owner to mine, dig or profit from any type of subsoil product such as minerals, oil, gas, gold etc.

The owner has the right to keep these products or sell a right to mine these products to someone else- such as selling the oil rights to a petroleum company without selling them the actual land.

Surface rights include the rights to anything on the land or water.

Water rights include:

Riparian: Along a Navigable river, an owner owns to the water's edge. Along a Non-Navigable steam, the owners own the land to the center of the stream and the government owns the water.
Littoral: Along large navigable lakes or oceans, the owner owns to the average high water mark.
Littoral Rights: The body of real property law that defines an owner's interest when the property abuts a navigable large body of water like an ocean, sea, or lake. Both riparian and littoral rights are tied to land that is adjacent to water. Generally, the property line ends at the mean high water mark.

Natural Rights: land gain or loss due to water:

Accretion: is the increase of land created by deposits of soil by the natural action of water.
Erosion: is the decrease of land by the gradual wearing away that is caused by flowing water.
Avulsion: is the "sudden" loss of land by an act of nature such a hurricane or typhoon (like the loss of beach).
Reliction: is an increase in land due to the receding of water (such as the increase of land at the Great Salt Lake).
Alluvial plain: is the delta area where the soil deposits from the river. The soil deposited is called Alluvion.
A fixture was once personal property and is now real property. Below is the legal test to see if an item has become a fixture:

Method of Annexation: How is the item attached? If it is permanently attached such as a central air conditioning unit (fixture) as opposed to a temporarily attached window unit (personal), the item has become a fixture.
Adaptability: How does the item fit in its environment? A water heater "fits' in the house, next to the furnace but the portable dishwasher may not "fit" in the kitchen.
Intent of the Parties: What do the buyer and seller agree upon? The martin bird house tower may become personal property if the buyer and seller agree in the contract, even if the bird house has been cemented in the ground.
Damage: How much damage will the removal of this item cause? The removal of a wall-to-floor bookshelf may cause a great deal of damage to a wall if the owner has to remove a lot of nails to get it free. If the parties agree that it is personal and there is damage, the owner must repair the damage.

Listing and Sale contracts should clearly define what is real and personal in the agreements. Any personal property should be carefully spelled out on the contract and all parties must be well aware of the situation. In general, it is better not to include personal property in the sale contract between the buyer and seller since each personal item will need a value for lending purposes separate from the property.
Personal Property should always be transferred by a Bill of Sale.
Freehold estates means, "I own the property," It is what is thought of as ownership. There is no definite ending date. An estate will last at least a person's lifetime, because generally, the property can be willed to a person's heirs.

Fee Simple Absolute:

This form of ownership is always clearly stated on the transfer papers (the deed) to the property. It can be called any or all of the three words, but it means the highest and best form of ownership. It means that it has the largest bundle of rights possible. It has unlimited duration and it is inheritable. It is subject only to government powers. (P.E.T.E.)*

Fee Simple Defeasible:

This is sometimes called a "conditional fee" because it is based on an occurrence or a non-occurrence of a specified event. It states that it is an estate "on the condition that..." and an estate that provides the "right to re-enter..."

Example: I will sell my property to you with the condition that alcohol is never served on the premises. If you have a wine and cheese party, then I will have the right to take back the property.

or

Example: After the oil crises of the 1970's, some service station chains began to sell some of their prime corner locations. Some of them were sold to convenience stores, but had the condition that no gas could be sold at this location.

This type of fee is unusual and cannot be written by real estate professionals- it will require the services of an attorney.

* P.E.T.E. stands for the government limitations on private ownership. It stands for police power, eminent domain, taxation and escheat. This will be discussed in Session 9.
Although this is classified as a Freehold Estate, this type is not an inheritable type of Freehold as are the other types. This type of Freehold has all the other rights under the bundle of rights except the right to inherit. In either reversion or remainder, a life tenant owns an incomplete bundle of rights. The property cannot be inherited by the life tenant's heirs. As a life tenant, the life tenant cannot:

will
waste

Conventional Life Estates:

This type of Freehold Life Estate is based on a person's life but upon death of that person, the estate will go to one of two types of situations.

1. An Estate in Reversion:

The grantor (owner of the estate) gives his interest to another party called a life tenant. The life tenant is the person, upon whose life the property relies. At the death of the life tenant, the property goes back to the grantor or his heirs. In other words, the owner of a property gives a second person the chance to live in a property for his lifetime; at the end of his life, the property goes back to the original owner or his heirs. The life tenant cannot will the property nor can the life tenant's heirs inherit the property. When the property returns to the grantor, it returns to Fee Simple Absolute without conditions and is inheritable.

2. An Estate in Remainder:

The grantor (original owner) gives a life tenant possession of the property during the lifetime of the life tenant. The grantor names a third party (called the Remainderman) at the time the property possession is given. At the death of the life tenant, the property is given to the remainderman, rather than the original owner. When it returns to the remainderman, it returns to Fee Simple Absolute without conditions.
Florida Law requires certain disclosures under The Cooperative Act Chapter 719. A copy of the law is available on the internet under Florida Statutes.

Contents of contracts.--Any contracts for the sale of a unit or a lease thereof for an un-expired term of more than 5 years shall contain:

1. The following legend in conspicuous type: THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER, AND RECEIPT BY BUYER OF ALL OF THE ITEMS REQUIRED TO BE DELIVERED TO HIM OR HER BY THE DEVELOPER UNDER SECTION 719.503, FLORIDA STATUTES. THIS AGREEMENT IS ALSO VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF RECEIPT FROM THE DEVELOPER OF ANY AMENDMENT WHICH MATERIALLY ALTERS OR MODIFIES THE OFFERING IN A MANNER THAT IS ADVERSE TO THE BUYER. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 15 DAYS AFTER THE BUYER HAS RECEIVED ALL OF THE ITEMS REQUIRED. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT CLOSING.

2. The following caveat in conspicuous type shall be placed upon the first page of the contract: ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, REFERENCE SHOULD BE MADE TO THIS CONTRACT AND THE DOCUMENTS REQUIRED BY SECTION 719.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE.

The buyer must also be provided with a series of paperwork for disclosure purposes including information with a question and answer sheet, the management contract, the estimated operating budget, copy of floor plan of the unit and survey of the property.
Any contract for the sale of a residential unit or a lease thereof for an unexpired term of more than 5 years shall:

Contain the following legend in conspicuous type: THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER, AND RECEIPT BY BUYER OF ALL OF THE ITEMS REQUIRED TO BE DELIVERED TO HIM OR HER BY THE DEVELOPER UNDER SECTION 718.503, FLORIDA STATUTES. THIS AGREEMENT IS ALSO VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF RECEIPT FROM THE DEVELOPER OF ANY AMENDMENT WHICH MATERIALLY ALTERS OR MODIFIES THE OFFERING IN A MANNER THAT IS ADVERSE TO THE BUYER. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 15 DAYS AFTER THE BUYER HAS RECEIVED ALL OF THE ITEMS REQUIRED. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT CLOSING.
Contain the following caveat in conspicuous type on the first page of the contract: ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, REFERENCE SHOULD BE MADE TO THIS CONTRACT AND THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE.

NEW CONDO DISCLOSURE LAW EFFECTIVE JANUARY 1, 2009

As of Jan. 1, 2009, condo buyers are entitled to receive from a seller (who is not a developer) a disclosure developed by the Florida Department of Business and Professional Regulation (DBPR). This disclosure details the rights and responsibilities of condominium boards and unit owners, voting rights, meeting notices and other governance matters. The disclosure, known as the Condominium Governance Form, is now available in PDF form from the DBPR Web site:
Resale purchase agreements.--

(1) An owner who acquires a timeshare interest for her or his own use and occupancy and later offers it for resale, or any agent of such person, must utilize a resale purchase agreement which complies with the provisions of subsection

(2) to effectuate any resale of the timeshare interest. Any resale purchase agreement must contain all of the following:

(a) The name and address of the timeshare plan and of the managing entity of the timeshare plan.

(b) The following statements in conspicuous type located immediately prior to the disclosure required by paragraph (c):

The current year's assessment for common expenses allocable to the timeshare interest you are purchasing is $_____. This assessment, which may be increased from time to time by the managing entity of the timeshare plan, is payable in full each year on or before __________. This assessment (includes/does not include) yearly ad valorem real estate taxes, which (are/are not) billed and collected separately. (If ad valorem real property taxes are not included in the current year's assessment for common expenses, the following statement must be included: The most recent annual assessment for ad valorem real estate taxes for the timeshare interest you are purchasing is $_____.) (If there are any delinquent assessments for common expenses or ad valorem taxes outstanding with respect to the timeshare interest in question, the following statement must be included: A delinquency in the amount of $_____ for unpaid common expenses or ad valorem taxes currently exists with respect to the timeshare interest you are purchasing, together with a per diem charge of $_____ for interest and late charges.) For the purpose of ad valorem assessment, taxation, and special assessments, the managing entity will be considered the taxpayer as your agent pursuant to section 192.037, Florida Statutes. Each owner is personally liable for the payment of her or his assessments for common expenses, and failure to timely pay these assessments may result in restriction or loss of your use and/or ownership rights.
There are many important documents relating to the timeshare plan which you should review prior to purchasing a timeshare interest, including the declaration of condominium or covenants and restrictions; the association articles and bylaws; the current year's operating and reserve budgets; and any rules and regulations affecting the use of timeshare plan accommodations and facilities.

(c) The following statement in conspicuous type located immediately prior to the space in the contract reserved for the signature of the purchaser:


You may cancel this contract without any penalty or obligation within 10 days after the date you sign this contract. If you decide to cancel this contract, you must notify the seller in writing of your intent to cancel. Your notice of cancellation shall be effective upon the date sent and shall be sent to the seller at (address) . Any attempt to obtain a waiver of your cancellation right is void and of no effect. While you may execute all closing documents in advance, the closing, as evidenced by delivery of the deed or other document, before expiration of your 10-day cancellation period, is prohibited.

(d) The year in which the purchaser will first be entitled to occupancy of a timeshare period associated with the timeshare interest that is the subject of the resale purchase agreement.

(3) If a resale purchase agreement utilized by a person described in subsection (1) does not comply with the provisions of subsection (2), the contract shall be voidable at the option of the purchaser for a period of 1 year after the date of closing.
Florida law, chapter 720 F.S., requires disclosure of important Homeowner's Association, ( HOA) information prior to signing a contract for sale. If the disclosure is not given, the purchaser is not bound and may cancel the contract at any time before closing.

The homeowner association disclosure must be supplied by the developer, or by the parcel owner if the sale is by an owner that is not the developer. Any contract or agreement for sale shall refer to and incorporate the disclosure summary and shall include, in prominent language, a statement that the potential buyer should not execute the contract or agreement until they have received and read the disclosure summary required by this section.

Keep in mind that fully informed buyers make the happiest and best neighbors. Because the HOA documents are recorded, a buyer is presumed to have the information. In other words, the buyer cannot argue that they did not know there was a no pet rule, for example. It is always best that a buyer become familiar with the rules of the community in which they purchase

example:

(a) A prospective parcel owner in a community must be presented a disclosure summary before executing the contract for sale. The disclosure summary must be in a form substantially similar to the following form:

DISCLOSURE SUMMARY FOR (NAME OF COMMUNITY)

1. AS A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU WILL BE OBLIGATED TO BE A MEMBER OF A HOMEOWNERS' ASSOCIATION.

2. THERE HAVE BEEN OR WILL BE RECORDED RESTRICTIVE COVENANTS GOVERNING THE USE AND OCCUPANCY OF PROPERTIES IN THIS COMMUNITY.

3. YOU WILL BE OBLIGATED TO PAY ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE SUBJECT TO PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER . YOU WILL ALSO BE OBLIGATED TO PAY ANY SPECIAL ASSESSMENTS IMPOSED BY THE ASSOCIATION. SUCH SPECIAL ASSESSMENTS MAY BE SUBJECT TO CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER .

4. YOU MAY BE OBLIGATED TO PAY SPECIAL ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY, COUNTY, OR SPECIAL DISTRICT. ALL ASSESSMENTS ARE SUBJECT TO PERIODIC CHANGE.

5. YOUR FAILURE TO PAY SPECIAL ASSESSMENTS OR ASSESSMENTS LEVIED BY A MANDATORY HOMEOWNERS' ASSOCIATION COULD RESULT IN A LIEN ON YOUR PROPERTY.

6. THERE MAY BE AN OBLIGATION TO PAY RENT OR LAND USE FEES FOR RECREATIONAL OR OTHER COMMONLY USED FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS' ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER .

7. THE DEVELOPER MAY HAVE THE RIGHT TO AMEND THE RESTRICTIVE COVENANTS WITHOUT THE APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE PARCEL OWNERS.

8. THE STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE ONLY SUMMARY IN NATURE, AND, AS A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION GOVERNING DOCUMENTS BEFORE PURCHASING PROPERTY.

9. THESE DOCUMENTS ARE EITHER MATTERS OF PUBLIC RECORD AND CAN BE OBTAINED FROM THE RECORD OFFICE IN THE COUNTY WHERE THE PROPERTY IS LOCATED, OR ARE NOT RECORDED AND CAN BE OBTAINED FROM THE DEVELOPER.

DATE:

PURCHASER:

(b) Each contract entered into for the sale of property governed by covenants subject to disclosure required by this section must contain in conspicuous type a clause that states:

IF THE DISCLOSURE SUMMARY REQUIRED BY SECTION 720.401, FLORIDA STATUTES, HAS NOT BEEN PROVIDED TO THE PROSPECTIVE PURCHASER BEFORE EXECUTING THIS CONTRACT FOR SALE, THIS CONTRACT IS VOIDABLE BY BUYER BY DELIVERING TO SELLER OR SELLER'S AGENT OR REPRESENTATIVE WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 3 DAYS AFTER RECEIPT OF THE DISCLOSURE SUMMARY OR PRIOR TO CLOSING, WHICHEVER OCCURS FIRST. ANY PURPORTED WAIVER OF THIS VOIDABILITY RIGHT HAS NO EFFECT. BUYER'S RIGHT TO VOID THIS CONTRACT SHALL TERMINATE AT CLOSING.

(c) If the disclosure summary is not provided to a prospective purchaser before the purchaser executes a contract for the sale of property governed by covenants that are subject to disclosure pursuant to this section, the purchaser may void the contract by delivering to the seller or the seller's agent or representative written notice canceling the contract within 3 days after receipt of the disclosure summary or prior to closing, whichever occurs first. This right may not be waived by the purchaser but terminates at closing.