Real Property Rights

1
Real Property Rights

• Real Estate 310
• Principles of Real Estate
• Dr. Longhofer

2
What is Real Estate?

• Real estate is defined as land at, above, and
  below the earths surface, plus all things
  permanently attached to it, whether natural or
  artificial
• Mineral rights relate to everything below the
  surface
• The rights to extract minerals are often sold
• Subsurface rights may also be acquired to
  construct subways and other underground
  structures
• Air rights relate to control of everything above
  the surface
• Solar and view rights are an evolving area of
  real estate law
• Although unlimited in principle, mineral rights
  are constrained by legal and technological
  restrictions

3
What about the Water?

• What about the water that runs across the land or
  is adjacent to it?
• The answer depends on the statein which the land
  is located
• The riparian rights doctrine isused in most
  Eastern states
• Each land owner has equal rightsto use the
  water, as long as they dont interfere with the
  rights of other riparians
• Ownership of the land usually extends to the
  mid-point of the river or stream

4
What about the Water?

• The prior appropriation doctrine usually applies
  in arid Western states
• Under this doctrine, the first land owner to use
  the water for some beneficial economic purpose
  has the right to all the water needed
• A permit system is typically used to assign
  water rights among users
• http//www.ksda.gov/appropriation/

5
Real Property Rights
6
Real Property vs. Personal Property

• Ownership of real estate entails more than just
  the physical possession of land and buildings
• Real property refers to the interests, benefits,
  and rights that are included in the ownership of
  real estate
• A legal interests in any other type of property
  is called personal property
• Items that can be moved, such as cars,
  furniture, appliances, and clothing, are
  personal property

7
Fixtures and Trade Fixtures

• A fixture is personal property that has become a
  part of the real estate because it is permanently
  attached to the land or an improvement
• Fixtures generally must remain with the real
  estate unless they are specifically excluded
• Trade fixtures are articles owned by a tenant but
  attached to a rented space or building, and are
  used in conducting a business
• Trade fixtures may be removed by the tenant
• The cost of repairing any damage is the
  responsibility of the tenant

8
Tests for Fixture Status

• When conflicts arise as to whether an item of
  personal property is a fixture, the courts apply
  several tests to determine if an item is a
  fixture
• Intent Test Did the person who installed the
  item intend it to remain permanently with the
  real estate?
• Test of Attachment Was the item permanently
  attached to the real estate? Can it be removed
  without causing damage to the surrounding
  property?
• Test of Adaptability Has the item been
  specifically adapted for use with the real
  estate? Would removal of the item substantially
  alter the usefulness of the remaining real
  estate?

9
Fee Simple Ownership

• The most complete interest you can own in real
  estate is a fee simple absolute estate
• This is the most common form of title (legal
  right to ownership of real estate)
• Someone holding a fee simple interest can
• Possess the property
• Use and modify the property within legal
  constraints
• Exclude others from the property
• Sell or give the property to whomever he wishes,
  including his heirs

10
Can You Own Less Than aFee Simple Interest?

• A qualified fee interest is one that can be lost
  in the future
• This is a legal right that is subject to the
  occurrence or nonoccurrence of some event
• Example Land might be donated to the city on the
  condition that it always be used as a park
• The person to whom the property would be
  transferred holds a reversion interest
• An ordinary life estate is an interest that ends
  upon the death of a named person
• The person who receives the property after the
  death holds a remainder interest

11
Leasehold Interests

• When a property owner leases her real estate to
  someone else, the rights are separated into two
  parts
• The tenant obtains a leasehold interest that
  gives him the right to possess and use the real
  estate, within the limits of the lease
  agreement
• The landlord, however, still owns the real
  estate (a leased fee interest with the right of
  reentry)

12
Joint Ownership of Real Estate

• Real estate can be jointly owned by two or more
  people
• Dont confuse joint ownership with a partnership
  although multiple people may belong to a
  partnership, legally it is a single entity
• A tenancy in common is the traditional form of
  joint ownership
• Each owner has equal rights to use and possess
  the real estate, although the size of their
  interests may differ
• Tenants in common can transfer or mortgage their
  interests without the consent of other co-owners,
  and the interest may be passed on to the owners
  heirs

13
Joint Ownership of Real Estate

• Joint tenancy is very similar to a tenancy in
  common
• Co-owners retain the right of survivorship in a
  joint tenancy, meaning that when one owner dies
  the other owners receive his interest
• In a joint tenancy,
• Each owner must hold the same percentage interest
  in the real estate
• Each owners interest must reflect the same legal
  estate (e.g., fee simple)

14
Condominiums vs. Coops

• With condominiums, residents have independent
  ownership of their individual units and jointly
  own the common areas
• As a result, each resident may mortgage or sell
  his unit independently
• With cooperative ownership, residents purchase
  shares in a nonprofit corporation that owns the
  real estate
• Shareholders dont have full rights to sell or
  mortgage their individual units
• Coops make joint financing of the building
  possible

15
Time Shares

• A time share is a joint ownership structure in
  which each co-owner has the right to possess the
  real estate for a certain period of time
• Time share interests can be ownership interests
  (as in a condominium) or leasehold interests