Real Esate Exam

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Estate

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Refers to the amount of ownership or interest in property.

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Fixture

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Personal property (personalty) which has become real estate because it is in some way attached to real property.

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Method of Annexation

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Also referred to as Portability. A major factor in determining whether an item is realty or personalty. If it is attached to the land or building it is considered to be real estate. If it can be carried by a person it is then personalty or personal property.

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Real estate

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Also known as realty or real property, is land and almost everything in or attached to it.

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Personal property

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Everything that is not classified as real property.

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Tangible ( personal property)

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Consists of all items which are physical and have substance : chairs, tables, radio, television, etc.

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Intangible (personal property)

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These are more like rights than items and are called "Choses in action". Examples would be: royalties, trade-mark rights and copyrights.

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Corporeal (real property)

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The actual land and all physical items affixed to it.

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Incorporeal ( real estate)

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Any interest in realty which cannot be considered physical and which is not apparent is incorporeal. Under this heading would come easements, rights of way, and licenses.

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Bundle of rights

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1.Possesion

2.Quiet Enjoyment

3.Disposition

4.Control

5.Exclusion

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The limitations on the bundle of rights are:

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1. Eminent Domain

2. Police Power

3. Taxation

4. Escheat

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Eminent Domain

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The right of the state, or a government agency, to take private property for the public use or good. There are two conditions. It must be for public use or good and the government must pay the owner a fair price.

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Police Power

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The power of the government to do whatever is necessary to protect the public welfare.

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Taxation

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A governmental right to levy charges against a property owner for services rendered. A major source of income is property tax. Real estate taxes are AD VALOREM taxes.

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Special Assessments

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Are taxes for municipal improvements which specifically benefit a property and are liens which take precedence over other liens.

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Escheat

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The state government takes over real estate when there is no will and there are no heirs.

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Easement

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A right of a person to use land of another.

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Easement Appurtenant

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A right in another's land (servient estate) which benefits and attaches to the owner's land (dominant estate) and automatically runs with the land.

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Easement in Gross

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When one person crosses someone else's land, but the land is not affected.(powerline, underground pipeline, etc..)

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Affirmative Easement

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One that allows the holder to do certain acts on another's land, such as have access or egress. Negative easement would be that of a utility whose pipeline runs under the property.

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Easements can be created in 3 ways:

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1. By deed : the most common method

2. By necessity

3. By prescription : Adverse possesion

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Estoppel

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Legal doctrine which protects a party who would suffer.

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License

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A right granted to a person for specific use of another's land.

Sometimes limited in time & usually revokable by the owner.

NOT TRANSFERRED BY TITLE.

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Encroachment

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An illegal intrusion or trespass into or over the property of another, such as a wall or fence.

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Nuisance

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Usually something non-physical which interferes with quiet enjoyment-noise, light, dust, odors etc...

Private nuisance affects a small area

Public nuisance affects a larger area and requires city, town, or county action for its removal.

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Appurtenances

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Rights, benefits, and improvements that transfer with title.

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Freehold Estates

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Estates of indefinite duration in which the owner holds the title.

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Encumbrance

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Any right to or interest in real estate, while possibly diminishing the value of the property, does not prohibit the passing of the title.

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Non Freehold Estates

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Estates of limited duration, such as leases.

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Fee Simple Absolute

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Also known as fee simple. This is the highest type of estate and includes complete ownership which is inheritable by the heirs of the owner. It is of potentially infinite duration and is without limitation.

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Fee Simple Determinable

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A type of estate with a condition which, if violated, causes automatic reversion to the former owner.

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Fee Upon condition

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A type of estate with a condition which, if violated gives the former owner the right, but not automatically, to reclaim the estate.

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Life estate

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An estate whose duration is limited to the life of the party holding it and may not be inherited. The estate terminates upon the death of the grantee.

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Tenancy in Common

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Ownership by different persons, each having an undivided interest in the whole without right of survivorship. Your heirs will get your part of the propertt if you die.

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Joint Tenancy

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Property held by two or more persons with each having the right to assume full title upon the death of the other. When someone dies there part of the property automatically goes to the rest of the owners.

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Tenancy by the entirety

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Ownership by husband and wife where, if one dies, the survivor owns the property without probate.

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Tenancy in Partnership

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An agreement between two or more co-owners to conduct a business for profit. Property held in the name of the partnership may be conveyed only with the consent of all the partners.

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Community Property

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Property accumulated through joint efforts of husband and wife. Upon the death of one spouse the survivor automatically owns one half of the property while the other half is distributed according the deceased's will.

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Estates are created and title is transferred in many ways. They are:

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1. Deed

2. Will / Inheritance

3. Adverse possesion

4. Eminant Domain

5. Escheat

6. Foreclosure

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Title by adverse possesion.

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Aka Squatters rights. When a person holds land openly, continuously, notoriously, and adversely for a period of twenty years he is deemed to have legal title even though someone else may have the paper title.

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Lien

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A claim against property that either secures payment of a debt or binds a party to fulfill some other obligation. A lien implies debt and is one type of encumbrance.

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Co-ops (cooperatives)

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Corporations which hold title to the land and buildings. The buyer does not become an owner of the real estate but becomes a stockholder in the corporation and receives a propietary lease to an apartment for the life of the corporation. If enough tenants are unable to pay their monthly rents the entire property could be foreclosed and everybody loses their shares.

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Deed

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A legal written instrument transferring title to real estate. The statute of frauds requires that it be in writing. To become fully effective it must be acknowledged and recorded.

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Contracts

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The type of legal instrument which makes agreements to sell, purchase, or lease binding.