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Real Estate, North Carolina
Terms in this set (89)
Real Estate; Real Property; Realty
Land and everything that is permanently attached to land.
Includes surface of the earth, the area below the surface to the center of the earth, and the area above the surface, theoretically, to the highest heavens. (Surface, Subsurface, Air Rights)
Physical Characteristics of Land
Also called Chattel or Personalty.
Every thing that is not land or that is not permanently attached to land, and is readily movable.
Bill of Sale
Instrument that may be used to transfer ownership of personal property.
Land cannot be relocated from one place to another, and contribute to making the market for land a strictly local market.
Requires brokers to have specific knowledge of their local real estate market to serve their buyers and sellers.
Aka Indestructibility. Land is a permanent commodity, and it cannot be destroyed.
Makes land attractive as a long-term investment.
When changing conditions adversely affect the value of land.
For example, an interstate highway can radically affect land values.
Aka Non-homogeneity or Heterogeneity. No two parcels are identical.
If a seller contracts to sell his real property, the law does not consider money a substitute for this duty.
Prevents breaches of contracts where sellers decide to not sell their property. Financial damages are typically no substitute for specific performance.
Economic Characteristics of Land
2. Permanence of Investment
Aka Availability. Land has a fixed supply base. No additional physical supply of land is being produced to keep pace with increasing population.
Permanence of Investment
The physical characteristics of immobility and indestructibility of land, combined with the investment of capital and labor to create improvements to the land and on the land is a long-term investment.
Aka Situs. Has the greatest effect on property value. Is a socioeconomic characteristic.
If demand for the area is high, the land will have a substantially increasing value.
Highest and Best Use
The use which will provide the owner the best possible return on an investment over a specified time period, resulting in the highest possible present value of the land.
Attained by the intelligent use of capital, labor and other resources to improve the land and its productivity.
Value of the land at the time of the appraisal.
Land Use Controls
Public land use controls: city planning and zoning, state and regional planning, building codes, environmental controls.
Private land use controls: protective or restrictive covenants
Increase in market value during the time the investor holds the property.
Positive Cash Flow
Exists when the gross effective income produced by the property exceeds the total expense.
Real Estate Investment Objectives
Primary purpose us to produce income or profit. Examples:
1. Positive Cash Flow
2. Tax Advantages
A registered trademark of the National Association of Realtors (NAR), and it identifies licensees who are also members of the local, the state and national association.
Not all licensees are REALTORS, and must be referred to as Brokers until they become members of the associations.
Is one in which the buyer and seller negotiate a purchase and sale without undue pressure, urgency, or outside influence other than the principle of supply and demand.
Factors Affecting Supply and Demand
Examples include interest rates, availability of financing for purchase and construction, population migrations, government regulations, local and national economic conditions, availability and cost of building sites.
A contract wherein a property owner employs a real estate broker to market his or her property.
Buyer's Brokerage or Buyer's Agency Agreement
A contract where in a broker contracts with a buyer to act as the buyer's agent.
Offer to Purchase / Contract
A binding contract to buy and sell real property.
The completion of the real estate transaction, which occurs at closing.
Provisional Broker Status
Status of a licensee until the education and experience requirements are met.
Must be supervised or sponsored by a Broker-in-Charge (BIC).
Bundle of Rights
Includes the rights of ownership, possession, use, and disposal of the property.
Fruits of the Soil; things that do not require planting or cultivation but that grow naturally and are perennial. These are included in Real Property.
Annual crops, such as corn, wheat, melons and soybeans; also used to denote the right of the tenant to reenter the property and harvest after the termination of the tenancy.
Fruits of the Industry; things that require planting and cultivation, such as emblements.
Something that cannot exist by itself but depends on a principal item to which it appends or attaches. It transfers with the title to the land.
An interest in real property that allows the owner to take minerals from the earth.
Ownership of and the rights to the area above the surface of the earth.
The appurtenant rights of an owner of property bordering a flowing body of water, or river.
Owners own up to the bank, or to the edge, of the water.
If an owner owns the land surrounding a body of water, he owns the land under the water.
If two or more owners own the land surrounding a body of water, each owns to the center of the water.
The rights of landowners whose property borders an ocean of lake.
The mean point to which an owner owns land that borders an ocean or a lake. This is the mean high tide mark.
The state-owned land between the mean high watermark and the low watermark.
Land is extended by natural forces by land deposits; becomes property of the riparian property owner.
Land is extended by natural forces of water receding; becomes property of the riparian property owner.
Land is lost gradually by the movement of water; the riparian owner loses title to the land.
Land is gained or lost rapidly by natural forces; the owner can reclaim the lost land.
The right of land to be supported in its natural state by adjacent land.
The right to have one's land supported from below.
Personal property that is attached to the land or a permanent improvement on the land.
Total Circumstance Test
Used to determine an item's identification as a fixture in the absence of a contractual agreement:
1. Intention (intended to make permanent improvements)
2. Relation to the attacher (owner vs. renter)
3. Method (how it's attached; if removal will cause damage)
4. Adaptation (if adapted to fit the real property)
Personal property items that are used in the course of a business operating in a leased property.
Real property items that are used in a leased farm operation, such as corncribs and silos.
Uniform Commercial Code
Provides for the lender to retain a security interest in a chattel until they are paid in full. These items are not legally classified as fixtures, or part of the property, until the security agreement has been satisfied by full payment. The lender can remove these items if the borrower defaults in payment.
The king owns, everyone else uses. Individuals cannot own land.
Title to real property may be held by individuals, but still subject to the powers of the federal and local government.
1. Police Power
2. Eminent Domain
Power of the government to enable it to fulfill its responsibility to provide for the health, safety, and welfare of the public.
Examples are zoning ordinances, subdivision ordinances, building codes and environmental protection laws.
Power of the government to take private property for public use as long as 1) the property is for the use and benefit of the general public, and 2) the property owner is paid fair market value of the property.
The taking of property under the power of eminent domain.
Fees imposed on owners by the government for the ownership of land. These fees are imposed upon property ad valorem, or according to value.
The process whereby property left behind by a deceased individual and there is no one legally eligible as designated by statute to receive the property (no heirs), and this property goes to the state.
Property owner dies and leaves a valid will
Property owner dies without a valid will, and property is distributed to heirs by statute, or by "intestate succession".
An interest in the property sufficient to give the owner of the estate the right to possession of the property.
An interest in Real Property that includes a present or future right of possession. pg 25
2 Types of Estate in Land
Freehold and Nonfreehold
An interest in land of at least a lifetime and is therefore gerenally identified with the concept of ttiitle or ownership.
2 Types of Freehold Estates
Estates of Inheritance (Inheritable)
Estates not of Inheritance (Noninheritable)
2 Types of Inheritable Estates
Fee Simple Absolute
Provides the greatest form of ownership available in real property. Entitles owner to "bundle of rights". (transferrable)
3 Types of Fee Simple Estates
1. Fee Simple Absolute
2. Fee Simple Determinable
3. Fee Simple Conditional
Fee Simple Determinable
An estate granted for a specific purpose or use. If not used for that purpose, the title automatically terminates and reverts back to original grantor.
(defeasible; automatic termination; 1 purpose)
Fee Simple Conditional
An estate granted by a grantor who restricts the future use of the property in some way.
(defeasible; NO automatic termination; condition, i.e. "cannot ever use a landfill")
Capable of being annulled, voided or terminated
Estates "pur autre vie" (for the life of another); measure by the lifetime of a person other than the person receiving the title; always a Freehold estate.
Estates good only for the life of the tenant, and do not pass on to his or her heirs, but are disposed of by some other route.
2 Types of Noninheritable Estates
1. Conventional life estate
2. Marital life estate
Conventional life estate
Estate for tenant's own life; noninheritable freehold estate; created only for the life of the named life tenant
Estate reverts back to grantor or to his heirs
An individual other than the grantor and his heirs whom receives the estate
Martital life estate
Created in NC by the intestate succession statutes governing the distribution of property of one who dies intestate (without a will).
The right of the life tenant to transfer his or her title to another person or pledge the title as security for debt.
Life Tenant Responsibilities
1. No waste
2. Right to estovers
3. Cannot will the property
4. Pay property taxes
5. Pay assessments levied
6. Duty to make repairs
The right of a life tenant to cut and use a reasonable amount of timber from the land to repair buildings or to use for fuel, but does not allow the tenant to cut and sell the timber for profit.
Confer a rental interest in real property; leasehold estate; does not last a lifetime.
4 Types of Nonfreehold Estates
1. Estate for years
2. Estate from year to year
3. Estate at will
4. Estate at sufferance
Estate for years
Fixed period of time; automatically terminates at the end of that period.
Estate from year to year
A periodic estate that automatically renews at the end of its period of the parties do no provide otherwise.
NC Required Termination Notice for Lease or Rental
Week to week: 2 days
Month to month: 7 days
Year to year: 30 days
Estate at will
An estate for an indefinite time and may be terminated by either party instantly by giving notice to the other party. Emblements applies.
Estate at sufferance
Not truly an estate, but rather a holdover situation created when the tenant's lease has expired and she fails to vacate. (illegal) Emblements do not apply.
THIS SET IS OFTEN IN FOLDERS WITH...
NORTH CAROLINA REAL ESTATE PRELICENSING
Chapter 1-Basic Real Estate Concepts
Real Estate Exam - State Portion - NC - Study Cards
Superior School of Real Estate - Chapter 3
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