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Property Ownership Part 1
Terms in this set (40)
generally moveable and unattached to land. It may be tangible like cars, boats, jewelry, horses, and cattle, or intangible like stocks, bonds, notes, and mortgages.
ncludes the following: trade fixtures, leases, and fructus industriales (emblements). It is also known as personalty and chattel
Articles of tangible personal property that are necessary to a tenant's trade or business.
Growing crops, also known as emblements, that are produced annually through labor and industry, such as corn, wheat, fruits, and vegetables. Fructus industriales is a Latin phrase meaning the "fruits of industry" or "labor."
Rights in Personal Property
Personal property rights include intellectual property (protected by patent or copyright), business reputation (good will), leases (transfers possession and use without ownership), and partnership interests (business association of 2 or more persons).
The term "real estate" is virtually synonymous with the term "real property". However, the term "land" has a more narrow meaning. Like real property and real estate, land includes the surface of the earth and the space above and below it, but only includes natural items like trees, crops, minerals, and water. Unlike land, real property also includes any improvements or fixtures, such as infrastructure, developments, and houses. Unlike personal property, real property is not moveable.
Types of Real Property
Includes land, improvements (valuable additions to land such as buildings and infrastructure development), and real estate (land plus improvements). Houses are a common improvement. Other improvements include
Permanent plantings (perennials) such as flowers, grasses, trees, and bushes. Fructus naturales is a Latin phrase meaning the "fruits of nature." Because they are classified as real property, these items may not be removed from the land absent an agreement (unlike personal property).
Items that were once moveable (personal property), such as fences, buildings, trees, or bricks in a wall, that have been affixed to real estate. Once affixed, such items become real property. When an owner sells her real property, she retains the right to remove her personal property (cars, clothes, jewelry, etc.) as the real property (including fixtures) passes to the new owner. Severance is the act of removing a fixture. Through severance, a fixture can again become personal property. However, some items cannot be severed. Fixtures are real property unless they can be severed.
Fixture Disputes - method of attachment
he permanence with which an object is attached to real property is a factor in determining whether it may be removed. The more permanent the attachment (built-ins), the less likely it may be severed.
Fixture Disputes -adaptation
If an object was specially adapted or made to suit a particular or unique feature of a building, then it is classified as a fixture (book case).
Fixture Dispute- Agreement
An agreement between the parties may permit removal of a fixture, or prevent a dispute about whether an item is or is not a fixture. Written agreements are the best way to avoid fixture disputes, as litigation is always uncertain.
Fixture Disputes - relationships of parties
Residential renters are less likely than commercial renters to be able to sever (compare trade fixtures).
Rights in Real Property
Includes ownership rights in the surface of land, airspace above land, space below the surface (mining rights), any easements (use of land), and use of appurtenant (adjoining) land.
Bundle of Legal Rights
Phrase that is used to describe the 6 distinct principal intangible legal rights of property ownership. These rights are: the right to Possess property; the right to Control property within legal limits; the right to Enjoy property and use it legally; the right to Exclude others from property; the right to Encumber property by lessening one's rights of ownership in any way; and the right to Dispose of property by sale, will, or other transfer. Along with the physical elements of ownership (land, improvements, fixtures, etc.), these intangible rights pass to the new owner in whole or in part with the sale or transfer of land. In short, these rights are: possess, control, enjoy, exclude, encumber, and dispose.
A property owner's entitlement to use and maintain water for agricultural, recreational, or personal use. Water rights are significant in states where water is in limited supply. Most states follow one of the following three legal doctrines to determine who has the intangible right to use or divert water and how much: riparian (reasonable use for those with property bordering moving water), littoral (reasonable use for those with property bordering non-moving water), and prior appropriation (owner who first diverts water has superior rights to all others).
Uses of Real Property
Public (zoning) and private (deed restrictions) controls limit how property may be used and influence its value. Commonly available property uses include: residential, commercial, industrial, agricultural, recreational, specific purpose (churches, hospitals, colleges, cemeteries), and public (state, federal, and municipal land).
Physical Land Characteristics
Land includes the surface of the earth and the space above and below it. Owners may sell or transfer surface, air, and subsurface rights. All land has the following three physical characteristics that influence value: immobility, indestructibility, and uniqueness.
Describes how property cannot be moved from one geographical location to another. Due to this characteristic, the value of real property is directly affected by its external surroundings. However, natural forces (like water and weather) may cause small bits of land to accumulate or erode over time. For example, if soil is gradually deposited by force of water, that is known as accretion.
States that land cannot be destroyed. The concept of indestructibility is the legal basis for neither insuring land nor being able to depreciate it. Its value may be destroyed by changing conditions, but land exists forever.
lso known as heterogeneity, and states that every parcel of real property is distinct—land and improvements are not standard. Parcels of land differ in size, shape, location, and appearance. Uniqueness is the legal basis for specific performance lawsuits, or lawsuits that seek to force the sale of land as agreed upon in a valid contract where the seller refuses to carry through with the sale as promised.
economic Land Characteristics
Land has the following five non-physical economic characteristics that influence its value: scarcity, area preference, improvements, investment permanence, and assemblage.
Economic principle stating that there is a limited supply of land on earth. The concept derives from the fact that the supply of land on earth is fixed and can never be increased. Scarcity can produce an increase or a decrease in the economic value of land depending upon the local supply and demand for land—as available land becomes scarce, its value tends to rise.
Area Preference (Situs)
Refers to a person's preference for one location over another. The phrase "location, location, location" is another way of explaining how a difference in area preference can cause two physically similar parcels of real estate to have very different economic values. Area preference, also called situs, is often identified as the most important economic characteristic of land.
Additions made to land that are intended to enhance its value. Improvements include houses and commercial buildings, as well as sewers, sidewalks, and fences. Not all improvements enhance value, and some improvements may be restricted by government or neighborhood associations.
Describes the permanence of investment in infrastructure improvements. Infrastructure improvements include sewage, drainage, and electricity systems. Combined with the immobility of the underlying land, these types of improvements produce relatively stable and long-term returns. Infrastructure improvements offer greater options for future development than a specific improvement like a residential home or a commercial building.
Describes how combining two or more contiguous parcels of real estate into a single parcel under the same ownership can increase its overall value. Assemblage is viable when the combined property will be more valuable than the sum of the individual parcels. Any increase in value resulting from assemblage is known as plottage value.
Types of Legal Property Descriptions
Method of locating real estate that is sufficiently accurate for a deed, mortgage, or other formal instrument. A property description is legally sufficient if it can be reasonably identified by a typical surveyor. The three principal methods of legally describing real property are: metes and bounds; government survey; and lot, block, and subdivision. Note that in some cases, land is described by referring to another publicly recorded document, such as a deed or a mortgage. Such a reference is legally valid only if the referenced document contains a valid legal description.
Principal Legal Descriptions
Legal descriptions are essential for deeds and titles (but not listing agreements, which may use non-legal descriptions).
Metes and Bounds
Method of legally describing real property, which identifies the outer edges of a parcel by establishing a well-marked starting point, called a point of beginning or POB, then describing in which direction and how far the property boundary runs from the POB. For easier locating, POBs are usually marked by permanent artificial monuments, like a survey stake. A legal metes and bounds description must start and finish at the POB or the description is defective. Metes and bounds is well suited for identifying irregularly shaped parcels because one can navigate in any direction from the POB, unlike other methods that rely on regular shapes, like the government survey method. A mete is an old term for "measure," and a bound is a term for "boundary."
Distance measured in inches, feet, yards, and sometimes miles. This usually requires reference to a compass setting.
Can be established using artificial monuments (iron pipes, brass disks set into concrete, road intersections, and highways), and natural monuments (lakes, large boulders, and noteworthy trees).
Surveyors define direction through the use of compass angles. A surveyor uses both precision instruments and known natural and artificial bounds to measure the exact angles and distances in order to establish the boundaries of a parcel.
Method of surveying land adopted by the United States in 1785 to facilitate the government's sale of large tracts of land as the population rapidly expanded westward. The government survey method is also known as the geodetic or rectangular survey system, and it is used in more than 30 states, mostly in the mid-west. This method employs the use of imaginary lines running north/south and east/west. These lines form a checkerboard pattern as they intersect, which are further divided into smaller units. This method works well for identifying large parcels, but not so well for describing small or irregularly shaped lots.
Series of numbered imaginary lines running from north to south across the United States, created by the government for the purpose of surveying land. Land surveyors using the government survey method depend on principal meridians to survey land.
Series of imaginary lines that run east-west, established by the Government, which intersect principal meridians.
Rectangles formed by principal meridians and base lines may be subdivided as follows: checks (24 miles per side), townships (6 miles per side within a check), and sections (640 acres, or 1 square mile within a township).
Lot, Block, and Subdivision (Recorded Plat)
Method of legally describing property, which begins with a large tract of land known as a subdivision plat. Subdivision plats are initially located by either metes and bounds or government survey. A subdivision plat is a large map which notes the layout of lots and their numbers. Once established and named, subdivision plats are further divided into blocks and lots. Before they may be recorded, subdivision plats must be pre-approved by local governmental units in charge of zoning. Each recorded plat receives a book and page reference number, and all plat books are available for public inspection. If a parcel of real property is part of a recorded plat, the legal description need only include the lot and block number, tract name, map book reference, county, and state.
Geodetic surveys include both horizontal and vertical land description methods that rely on a series of permanent ground markers (monuments, or benchmarks) and a datum (imaginary markers that serve as baselines for horizontal and vertical measures).
Method of describing real property for convenience only, and not for the purpose of a deed, mortgage, or other instrument requiring a legal description. While deeds and titles require legal property descriptions, consumers often use less formal descriptions to discuss and characterize real property (can be used in advertising or listing agreements). The most common example of such informal methods is the street address. The street address is useful in locating real property, but it is insufficient to locate real property borders by survey. However, the simple street address of a parcel is a sufficient description in a sales contract. Front footage is another example of a non-legal description of property (portion of land that abuts a street or water).
Usage of Legal Property Descriptions
Any document filed in land records concerning a property must identify the property using the legal description, rather than an informal description such as the property address. Examples include: deed, deed of trust/mortgage, easement, or power of attorney.
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