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IFREC SLAS SG Concepts Chpt 8&9

<p>Chapter 8 &amp; 9 - Property Rights, Estates, Multiple Ownership, &amp; Ownership Restrictions</p>
STUDY
PLAY
Land ( mentioned )
Land and all natural improvements ( Note 1 Land also includes products of nature beneath the surface, such as oil and limestone. Technically, land extends downward to the center of the earth and upward into the air to infinity.)
Property ( mentioned )
Ownership of a bundle of rights
Primary Characteristic Of Land ( mentioned )
Immobility; location is fixed
Real Estate ( mentioned )
The land and all improvements by man or nature
Real Property ( mentioned )
Land plus attached improvements and legal ownership rights that go with them
Realty
Refers to product or business
Bundle Of Rights
Disposition, use, possession, exclusion (DUPE) ( note 1 - this creates the value - for instance a 30 years lease)
Right Of Exclusion
Exclude others from possession and use
Right Of Disposition
Sale, gift or will
Physical Components Of Real Property ( mentioned )
Surface, subsurface, air space ( Note 1 - certain parts or rights are not transferable)
Riparian Rights .( mentioned )
River or stream ( running water )
Littoral Rights .( mentioned )
Ocean, sea, or lake (bodies of water)
Accretion ( mentioned )
Gradual build-up of soil (and land) along bank of river, stream, or shoreline ( note1 land mouth of a river)
Erosion ( mentioned )
Gradual loss of soil (and land) along bank of river, stream, or
shoreline
Personal Property ..( mentioned )
Anything not real property; movable
Chattel ( mentioned )
Article of personal property
Trees Become Personal Property ( mentioned )
By severance ( note 1 by cutting them into Firewood they become Personal Property - other example is Crops )
Fixture (Real Fixture)
Article affixed to real property
Standards To Determine Fixture ( mentioned) ( exam )
Intent, relationship, method, and adaption (IRMA) (Note 1 for the exam which one of the four is contested in court -- Intent ( For example, including a washer and dryer in a sale contract as part of the real property would remove any doubt about the owner's intention.
In disputes between buyer and seller, the terms and conditions of the sale contract usually
are strictly enforced unless there is some indication that the buyer was misled))
Trade Fixture ( mentioned )
Non-residential tenant-owned item that, although attached to an improvement, retains its character as personal property
Freehold Estate ( mentioned )
Estate of ownership; indefinite duration; measured by the lifetime of a person ( Note 1 reflected in the Deed and the Title Search )
Types Of Freehold Estates ( mentioned )
Fee simple and life estate ( Note 1 reflected in the Deed and the Title Search )
Fee Simple Estate ( mentioned )
Indefinite duration; inheritable estate ( Note 1 reflected in the Deed and the Title Search )
Habendum Clause ( mentioned )
Identifies estate in deed (to have and to hold) ( Note 1 reflected in the Deed and the Title Search )
Disposition Of Fee Simple ( mentioned )
Sale, gift or will ( Note 1 reflected in the Deed and the Title Search )
Life Estate ( mentioned )
Ownership for life of a person; the person who owns the life
estate and the person whose life measures the length of the life
estate ("for the life of ... ") may be different ( Note 1 reflected in the Deed and the Title Search )
Remainderman ( mentioned )
Receives estate upon death of life tenant ( Note 1 reflected in the Deed and the Title Search )
Types Of Remainder Interest.
Vested ( note 1 - refers to someone whose legal name is specified.) and contingent ( note 2 refers to someone whose legal name is not specified (such as.
first-born child))
Reversion Estate ( mentioned )
Goes back to grantor or lessor ( Note 1 reflected in the Deed and the Title Search )
Less-Than-Freehold Estate ( mentioned )
Estate of possession but not (freehold) ownership; created by
lease agreement; also called leasehold estate
Types Of Leasehold Estates ( mentioned )
Estate for years, tenancy at will, tenancy at sufferance
Estate For Years ( mentioned )
Created for definite duration of time; multiples or divisions of a year
Tenancy At Sufferance .( mentioned )
Tenant remains in possession after termination of estate for years (holdover); no notice required to terminate ( note 1 - also termed Naked possession and no rights exist for either party ) ( note 2 a "hold-over" tenancy after a lease has expired, but before the landlord has demanded that the tenant quit (vacate) the premises. During a tenancy at sufferance the tenant is bound by the terms of the lease (including payment of rent) which existed before it expired. The only difference between a "tenancy at sufferance" and a "tenancy at will" is that the latter was created by agreement)
Separate Property .
Property owned separately from spouse
Severalty .( mentioned )
Ownership of property by only one person
Tenancy In Common ( mentioned )
2 or more co-owners own undivided interest; NO right of survivorship
Characteristics Of Tenancy In Common( mentioned )
. Shares may be unequal or equal; pass by will or descent (no will)
to heirs
Joint Tenancy ( mentioned )
2 or more co-owners own undivided interest; WITH right of
survivorship
Characteristics of Joint Tenancy ( mentioned )
JTWROS, Shares pass to other co-owners; shares must be equal ( Note 1 must be written in Deed ) ( note 2 - must be concurrent )
4 Unities In Joint Tenancy ( mentioned )
Possession, interest, title, time (PITT)
Tenancy By The Entireties ( mentioned )
Exclusively for husband and wife; survivorship (protects the owning surviving spouse); applies to all real property purchased by husband and wife together during the marriage
Conveyance Of Tenancy By Entireties ( mentioned )
Both spouses must sign instrument ( note 1 not in all states )
Divorce Terminates Tenancy By Entireties ( mentioned )
Creates tenancy in common
Homestead Estate .( mentioned )
Own title plus permanent residence
Extent Of Homestead Land ( mentioned )
Up to 160 acres or 1/2 acre
Protection Of Homestead ( mentioned ) ( Exams )
Exempt from forced sale except for property taxes, special assessments, mortgages and construction liens
Protection of Non-Owner Surviving Spouse
Sole owner spouse dies; receives fee simple if no lineal
decendants of sole owner or life estate if sole owner decedant had lineal decendants
Exemption From Taxation
Up to assessed valuation of $25,000
Additional Exemption
$25,000 additional exemption on assessed value from 50,001 -
75,000 on City and County taxes ONLY
Entire $50,000 Exemption
On assessed value more than $75,000
Elective Share ( mentioned )
30% of net distributable estate of deceased spouse except for homestead property and statutory exemptions ( Note 1 this takes precedence over a will / prenuptial and only is protected with action of a trust )
Condominium Ownership ..( mentioned )
Own unit plus interest in common elements ( note 1 - fee simple ownership and e.g. box in sky - south beach )
Condominium Association
Operates plus maintains common elements
Condominium
Right to refund of escrow deposit; 3 business days on resale, 15 calendar days on new construction
Cooperative Ownership ( mentioned ) ( exam )
Corporation owns real estate; individuals own shares and have proprietary lease and occupancy agreement
Timeshare Estate
Own specified period of time
Cancel Timeshare Contract
Within 10 days of signing or 10 days after receiving offering
statement, whichever later
Governmental Limitations ( mentioned )
Eminent domain, police power, taxation, escheat
Eminent Domain ( mentioned )
Government takes title to privately owned land; condemnation;
can also be exercised by delegated private entities such as railroads
Requirements For Eminent Domain ( mentioned )
Public use, due process, just compensation ( equates to fair compensation )
Police Power
Government restricts owner's use and occupancy of land
Examples Of Police Power. ( mentioned and exam)
Zoning, building codes, environmental regulation ( note 1 also includes Health Standards )
Right Of Taxation ( mentioned )
Local government has right to levy property tax
Escheat ..( mentioned )
Title escheats (reverts) to state; no will and no heirs
Private Limitations ( mentioned )
Lease, deed restrictions, easements, liens ( DELL)
Deed Restrictions
Covenants restricting use of land
Enforcement Of Covenants
Civil action; NOT governmental agency
Easement.. ( mentioned )
Right to use land of another person for specific use
Easement Appurtenant ( mentioned )
Gives one owner of a lot the right to use and benefit from another owner's adjacent lot, such as right-of-way
Easement in Gross ..( mentioned )
Benefits an individual or business entity and often established over several parcels, such as utility easement
Creation Of Easement .( mentioned )
By agreement; prescription (20 years of open, unterrupted use); necessity
Types of Easements .( mentioned )
Easements by prescription and easements which run with the land ( note 1 exam )
Termination Of Easement
Agreement, merger, abandon, court order
Parties To Lease Agreement .( mentioned )
Lessor (landlord) and lessee (tenant); lessor owns freehold estate, lessee holds leasehold estate
Landlord Access To Premises
Per terms of lease and in case of emergency
Consideration For Lease
Money (rent), services, provisions
Security Deposit And Advance Rents ( mentioned ) .( for landlord )
Separate non-interest bearing account OR interest bearing account and pay tenant interest OR bond + 5% interest to tenant ( Exam assurance up to $50K)
Statute Of Frauds ( mentioned )
Leases longer than 1 year MUST be in writing and signed to be enforceable; leases for 1 year or less SHOULD be in writing to avoid misunderstanding
Repairs-Nonresidential
Tenant generally has responsibility
Repairs-Residential
Landlord must comply with building, housing and health codes: if no codes, landlord must maintain roof, windows, doors, floors,
and all other structural components in good repair
Sublease Of Lease ( mentioned )
Tenant transfers right of possession to sublessee but retains
rights of lessee under original lease; tenant leases part of space to
another for balance of lease term or all of the space for part of the time remaining
Assignment Of Lease ( mentioned )
Lessee transfers all rights under original lease agreement to
assignee
Profit Calculation
Sale Price
- Cost of Invest. (Purchase Price)
Profit
Percent Profit Calculation
% Profit = Made
Paid
Usually requires 2 steps

Sold ?
-Paid ~
Made/
Made (or Loss)
Paid
(or Loss)
= % of profit or loss
Gross Lease
Tenant Oessee) pays fn::ed rent and the landlord (lessor) pays all
expenses associated with property. Associated with residential
and office building leases
Net Lease
Tenant 0essee) pays f:ixed rent plus property costs for
maintenance and operating expenses (taxes, insurance, utilities).
Typical for commerical properties. Usually referred to as triplenet
Percentage Lease
Tenant pays rent based on gross sales received by doing business on the leased property. Common with large retail stores
Variable Lease
Tenant pays specified rent increases at predetermined dates in the future. Usually tied to an index, such as the consumer price index (CPI)
Lien
Right to have property sold to satisfy debt
Examples Of Liens ( mentioned ( exam)
Property tax, special assessment, mortgage
General Lien ( mentioned ) ( Exam)
May affect all properties of a debtor. Judgement, income tax,
estate
Specific Lien ( mentioned ) ( exam)
Only apply to a specified property. Mortgage, property tax, special assessment, construction, vendors
Commercial Lien ( mentioned ) ( Exam)
Commercial broker may place a lien on the proceeds of the sale to safeguard commissions
Tenancy at Will ( mentioned )
May be terminated at will by of either party; 15 days notice required for month-to-month tenancy. or some other agreeable timeframe.