Property Classification

 

•        Property: Legally protected rights and interests in anything with an ascertainable value that is subject to ownership.

 

•        Real Property: Land and everything of value attached to it, such as foliage and permanent structures, or found under it, such as minerals and water.

 

•        Personal Property: Property that is movable --sometimes referred to as chattel or personality. There are two types of personal property:

 

•        Tangible Personality: Personal property, such as a television set or car, that has physical substance; and

 

•        Intangible Personality: Personal property, such as stocks, bonds, patents, and copyrights, the value of which does not depend on physical existence.

 

•        Fixtures: Buildings and other improvements that are attached to real property in such a way that (i) the fixture cannot be removed without causing substantial damage to the real property, or (ii) the fixture is so adapted to and takes on the characteristics of the real property that it becomes part of that real property.  Requires intent to become a fixture- that is, via the attachment of the property to the realty.

 

Consider trade fixtures:  installed for commercial purposes by a client (washers, etc.) upon removal, client fixes damages to the building resulting from these trade fixtures removal.

 

 

PROPERTY OWNERSHIP

                                                                         

 

•         Fee Simple: Absolute ownership entitling the property owner to possess, use, or dispose of the property as he or she chooses.  In other words, they have the right to sell, give, lease or destroy the property.

 

•         Concurrent Ownership

 

•        Tenancy in Common: Co-ownership of property in which each party owns an undivided interest in the whole property.   Passes via will, not to co owner.

 

•        Joint Tenancy: Joint ownership of property in which each co-owner owns an undivided interest in a portion of the whole property.  Passes to survivor of the co-owners.

 

•        Tenancy by the Entirety: Joint ownership of property by husband and wife, where neither party can transfer his or her interest in the property without the other’s consent.

 

•        Community Property: Joint ownership of property by husband and wife in which each spouse owns an undivided one-half interest in property acquired during marriage.

 

•        Separate property:  non marriage/before marriage/inheritance.

 

          In other words, notice the distinction between divided versus undivided interests.

 

          Consider:

·        ·         Possessory Estates:

              Fee Simple

                             Life Estate

                             Leasehold (tenancy)

 

·        ·         NonPossessory Estates:

                             Easements

                             Licenses

 

 

ACQUIRING OWNERSHIP: VIA GIFTS

 

•        Gift: Any voluntary transfer of property made without consideration, past or present.

 

•        In order for a transfer of property to be considered a gift, the following conditions must be satisfied:

 

(1)     Donative Intent: The donor (the person giving the gift) must intend for the transfer to be a gift;

 

(2)     Delivery: The gift must be delivered to the donee (the person for whom the gift is intended), who, as a result of the gift, must be free to exercise dominion (ownership rights) over the property in question; and

 

(3)     Acceptance: The donee must accept the gift.

 

•        Inter Vivos Gift: A gift made during the donor’s lifetime and not in contemplation of imminent death.

 

•        Causa Mortis Gift: A gift made in contemplation of the donor’s death. The donee must survive the donor in order to accept the gift. If the donor does not die as expected, the gift is revoked.

 

Testamentary gifts (via will)/ Inheritance- receipt of property via death.

 

 

ACQUIRING OWNERSHIP: NON-GIFTS

 

•         Ownership of personal property may be obtained in the following non-gift ways:

 

•        Purchase: Property rights may be acquired in exchange for money or other valuable consideration.

 

•        Possession: Property rights may be acquired by taking possession of unclaimed, lost, or abandoned property.

 

•       Production: Property rights may be acquired by creating the property.

 

          •        Accession: Property rights may be acquired by adding value to existing property by personal labor or materials.

 

•        Ownership by accession may be subject to challenge if (i) the accession was wrongfully done, or (ii) the accession greatly increased the value of the property or changed its identity.

 

          •        Confusion: Property rights may be acquired by mixing together goods belonging to two or more persons in such a way so that the separately-owned goods can no longer be identified.

 

 

  

 

More on

REAL PROPERTY

 

ELEMENTS OF REAL PROPERTY

 

• Real property consists of:

 

•        Land, including the soil on the surface of the earth, all of the water contained on or below the surface, oil & gas, etc. (unless separated from the estate via a mineral deed or water rights matter), and most of the airspace above the surface;

 

•        Fixtures: Buildings and other improvements that are attached to real property in such a way that they take on the characteristics of the real property and become part of that real property; and

 

•        Plant Life and Vegetation, both natural and cultivated, as well as the produce of said plant life and other vegetation.

 

 

OWNERSHIP OF REAL PROPERTY

 

•           Fee Simple Absolute: An ownership interest in real property that affords the owner the greatest possible aggregation of rights, privileges, and power. Only an individual and his or her heirs can hold a fee simple absolute.

 

•        Fee Simple Defeasible: An ownership interest in real property that can revert to the grantor of the interest (or his or her heirs or assigns) upon the occurrence or nonoccurrence of a specified event.

 

•        Life Estate: An interest in real property that affords the holder all rights of possession and use of land but exists only for the duration of the life of some person, usually the holder of the life estate.

 

LEASEHOLD ESTATES

 

•           Lease: A contract by which the owner of real property (the landlord or lessor) grants to a person (the tenant or lessee) an exclusive right to use and possess the property, usually for a specified period of time, in return for rent or some other form of consideration.

 

•        Leasehold Estate: An estate in real property held by a tenant under a lease, giving the tenant a qualified right to possess and/or use the land.

 

•        Tenancy for Years: A leasehold estate for a specified period of time.

 

•        Periodic Tenancy: A leasehold estate for an indefinite period conditioned upon the receipt of rent at fixed intervals.

 

•        Tenancy at Will: A leasehold estate that permits either the lessor or lessee to terminate the tenancy, without cause and without notice.

 

•        Tenancy at Sufferance: A situation that arises when a tenant continues to occupy the real property after his or her leasehold estate expires.

 

NON-POSSESSORY INTERESTS

 

•           Easement: A non-Possessory limited right to use another’s property in a manner established by express or implied agreement.  For example, the right to use a road to get to your property, or the right of a utility company to bury a cable on your property at a certain location.

 

•        Profit: The right to enter upon and remove things (e.g., trees, oil, topsoil) from the property of another.

 

•        License: A revocable right or privilege to come onto the land of another.  Consider a baseball ticket at Minute Maid Field.

 

 

TRANSFER BY DEED

 

•           Deed: A document which conveys legal title to real property. A valid deed must contain:

 

(1)      the names of the buyer (grantee) and seller (grantor);

 

(2)      words evidencing an intent to convey the property;

 

(3)      a legally sufficient description of the land; and

 

(4)      the grantor’s signature; and

 

must be delivered to the grantee.

 

•        Warranty Deed: A deed in which the grantor guarantees to the grantee that the grantor has valid, clear title to the property conveyed in the deed.

 

•         Special Warranty Deed: A deed that warrants only that the grantor or seller has not previously done anything to lessen the value of the real estate.

 

•        Quitclaim Deed: A deed intended to pass any titles, interest, or claim that the grantor may have in the property but not warranting that such title is valid and/or clear of any encumbrances.

 

•        Grant Deed: A deed that simply “grants” the property, without any other recitals.

 

•         Some state laws imply a warranty that the grantor owns the property being transferred and has not previously encumbered or conveyed it.

 

•        Sheriff’s Deed: A document giving ownership rights to a buyer at a sheriff’s (foreclosure) sale. The defaulting owner then has a statutory period within which to redeem the property and reclaim title.

 

           

•        Recording Statutes: All states have statutes permitting deeds to be recorded, thereby giving public notice of ownership and, if filed, encumbrances. Deeds are generally recorded in the county (or parish) in which the property is located.