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Real Estate
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Real Estate
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PROPERTY (What is owned?) The rights or interests which the owner has in the thing he owns. The owner has a Bundle of Rights (e.g., The right to possess, to use, to sell, to enter, to give away, to lease, to encumber, to dispose, to exclude, to do nothing) subject to governmental powers (police power, escheat, taxation, eminent domain) and the claims of others (easements, leases, trust deeds, etc.). The owner may dispose of the whole bundle or any one of these rights at any time. Holding these rights to the exclusion of others defines ownership. All property is either personal property or real property.
A. PERSONAL PROPERTY (A chose, chattel, personalty) - Generally movable property.
1. Mortgages, trust deeds and stock in a real estate syndicate are personal property.
2. Personal property can be alienated, be hypothecated, or can sometimes become real property.
B. REAL PROPERTY (Realty) - Generally immovable. It includes:
1. Land - Material of the earth including the soil, rock, minerals, oil and other substances. Minerals are real property until they are mined at which time they become personal property. Mineral rights are automatically transferred when property is sold. Land may be divided vertically or horizontally. The owner of land:
a. Owns the space beneath the surface to the center of the earth and the airspace above it.
b. Has the right to lateral and subjacent support.
c. May have water rights, which are usually not listed in the county records, title insurance policy or the deed. These rights are not absolute.
(1) Riparian Rights - The right of a landowner to the reasonable and appropriate use of water from a stream, river or watercourse touching his land.
(2) Littoral Rights - The right of a landowner to the reasonable and appropriate use of water from a lake, sea or ocean touching his land.
(3) Appropriation - Only the state can give permission to a nonriparian owner to take water from a river or lake.
(4) Surface Waters - Owner may build a dike to protect his land from flood waters but may not dig a trench or divert the water onto nearby land.
(5) A water table denotes the depth where water is found.
(6) Land is deeded to the mean high tide line in tidal areas.
(7) Underground waters not in a defined channel are called percolating waters.
2. Anything Affixed to the Land - May be attached by roots (e.g., plants, vegetation and trees), imbedded in it, permanently resting on it, or permanently attached to a building that is resting on it.
a. Fixtures - Items of personal property which now are attached (physically or legally) to the land and are now considered real property (e.g., screens, Venetian blinds, wall bed). They are incorporated into the land. There are five tests to determine if an item is a fixture or not:
(1) The method of attachment.
(2) The adaptability of the item.
(3) The relationship of the parties.
(a) Emblements (growing annual crops, industrial crops, cultivated crops) are considered real property between buyer and seller.
(b) Emblements are personal property between landlord and tenant. The tenant farmer has the right to harvest his crops even after his lease has expired.
(c) Industrial crops, when cut, mortgaged, or sold, become personal property.
(4) The intention of the person attaching it.
(5) Agreement between the parties.
b. Size and cost of the item or time of attachment are not tests for a fixture.
c. Trade Fixtures - Articles of personal property that a tenant has attached to real property which are necessary in his trade or business. May usually be removed by the tenant, if removed without damage to the property. They are not considered real property.
d. Real property can become personal property and vice versa (e.g., a fence which is removed by the owner and placed on the ground would be personal property).
3. Appurtenances - Anything used with the land for its benefit. Appurtenances "run with the land." They do not need to be mentioned in the deed or contract. They pass automatically to the new owner.
a. Easements
b. Stock in a mutual water company.
c. Watercourses and streams.
d. Dwellings, fences, etc.
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Copyright © 1998, Real Estate Trainers, Inc.