Foldvary, Econ 156
Characteristics of real estate
Property is anything that can be controlled by human beings.
Ownership is a bundle of rights to property.
The legal term for ownership is title.
The bundle of rights to real estate include air rights, mineral rights, and water rights,
but these bundles may be held separately from others.
Real estate, real property, and real immovable property are synonyms.
Real property is real estate.
All other property is personal property.
Personal property is also called chattel.
Movable property is “personal property.”
Real estate is land and the capital goods attached to a site.
Land in economics means natural resources.
Land: three dimensional space, the electro-magnetic spectrum,
and natural material resources.
Spatial land has a fixed location and a fixed extent.
Capital goods are those which have been produced but not yet consumed.
Real estate consists of:
1.Land;
2.Capital goods which is affixed to the solid surface;
3.Capital goods which are incidental or appurtenant to land; and
4.Capital goods which are immovable by law.
Appurtenances defined.
A thing is deemed to be incidental or appurtenant to land
when it by right is used with the land for its benefit,
as in the case of a way or watercourse,
or of a passage for light, air, or heat from or across the land of another.
For mining,
sluice boxes, flumes, hose, pipes, railway tracks, cars, blacksmith shops, mills, and all other machinery or tools used in working or developing a mine are deemed affixed to the mine.
Personal property that becomes attached to a site is called a fixture,
except for property used in a trade or business, trade fixtures.
Fixtures include things such as landscaping, water heaters, and drapes.
Some fixtures such as a chandelier can be designated as personal property in the sales contract.
Fixtures defined.
A thing is deemed to be affixed to solid land when it is attached to it by roots,
as in the case of trees, vines, or shrubs,
or imbedded in it, as in the case of walls,
or permanently resting upon it, as in the case of buildings,
or permanently attached to what is thus permanent,
as by means of cement, plaster, nails, bolts, or screws.
Regarding a tree occupying lands of an adjacent owner -
Ownership is determined from the trunk.
Trees whose trunks stand wholly upon the land of one owner belong exclusively to that owner although their roots grow into the land of another.
Trees whose trunks stand partly on the land of two or more coterminous owners belong to them in common.
2
If a contract does not specify whether an item is a fixture, there are two criteria that apply.
The test of attachment is that the removal of the fixture would cause damage.
For example, built-in appliances.
The second is the test of adaptability, items which have been specifically adapted to other fixtures.
Rights to land that holds water.
Riparian rights are about rights to bodies of water.
The owner of real estate by the ocean usually owns the space up to the high-water mark.
Owners of property next to fresh water can have the right to use the water.
Under riparian rights, all owners of sites next to or including water have equal rights
to use the water, as long as the use does not deprive others.
If the owner has prior appropriation rights, then it's first come, first served.
The first person to use the water has the legal right to use all he wants, but subject to regulations.
Titles to real estate
Ownership of real estate is called estates in land.
Lessor: person who has title, the owner.
Lessee: person who has possession in exchange for paying a rental to the lessor.
A leasehold contract provides the lessee with the right to possess real estate,
subject to paying a rental to the lessor.
The landlord has a leased fee estate.
If a tenant no longer has a leasehold but continues to have possession,
he has a tenancy at sufferance.
A freehold estate provides the title holder
with rights of possession and the income or rental from land.
A life estate is a freehold estate that terminates upon the death of a named person.
A fee simple absolute estate provides the greatest amount of rights to real estate.
These rights are alienable, meaning the owner may transfer the property.
Inalienable rights are those which you may not dispossess yourself of.
When 2 or more persons own the same real property, they have concurrent estates.
They are tenants in common when each owner has an undivided interest.
Each owner may dispose of his share.
In joint tenancy, each owner has the same percentage interest.
The others have the right of survivorship, automatically inheriting the property.
California and some other states have community property titles,
a type of ownership that came from the Spanish.
The husband and wife jointly own the property acquired during the marriage.
Real estate in a marital community can only be sold with the permission of both spouses.
Property acquired prior to the marriage or by inheritance
is not automatically part of community property.
A condominium consists of individual units and common elements.
Each member has a fee simple title to a unit, and a percentage interest in the common elements, owned as a tenant in common.
The member is an owner of the condominium association, and pays a monthly assessment. The member has a contract with all the other co-owners.
A member's vote is proportional to his percentage interest.
In a residential association or homeowners' association,
the members have a fee simple ownership of their units such as a single-family house and land.
The association owns the common elements as a corporation.
The member pay assessments to the association, and vote for the members of the board.
Possibly a tenant resident also has a vote.
In a cooperative, the members own stock in a nonprofit corporation.
A member has a proprietary lease, the right to occupy a particular unit
for an indefinite period of time.
New members require the approval of the board of directors.
The members pay a periodic fee.
The board is elected with each member having one vote.
A concurrent estate or co-tenancy is a concept in property law which describes the various ways in which property is owned by more than one person at a time.
If more than one person own the same property, they are referred to as co-owners, co-tenants or joint tenants.
An interval ownership or time share
is a concurrent estate that divides ownership by time, usually by the week.
Owners have a fee interest time share, with a fee-simple title for a particular week.
Often, they rent their units or swap with others.
There can also be a right-to-use time share, a leasehold interest for a particular time interval.
A land trust is like a corporation, having title to land.
The residents have a leasehold on their plots of land, but own their buildings.
They pay rent to the trust in exchange for using the land and obtaining services from the trust,
such as open space, meeting places, and streets.
There is also land owned by a government.
Government land can be a commons, where anybody may enter with no charge,
or excludable, like a military base.
Deeds
Deeds require a legal description of the location and extent of the land.
California uses the rectangular survey system.
This is based on principal meridians or longitude lines, and east-west base lines.
The area is divided into north-south range lands, and east-west township lines.
The lines form squares, called townships, with an area of six-mile squares,
36 sections each one square mile. A square mile has 640 acres.
The term "township" also is used for governmental jurisdictions in eastern states,
which do not use the rectangular system.
In urban communities, plots of land are described by a combination of a rectangular survey
and metes and bounds.
Metes are the distances, and bounds are the directions of the boundaries.
The description often uses iron pins which are put in the ground.
Properties can also be described by plats, drawings of parcels, with the lots numbered.