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. They may be described as both land and personal property.
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. For example: “To A for his life, to B upon A’s Death” is a Life estate for A, and a remainder interest for B.
• 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. For example, a month to month lease, usually after a tenancy for years-usually requires one period’s notice, and in our example, it would be a one month notice.
• Tenancy at Will: A leasehold estate that permits either the lessor or lessee to terminate the tenancy, without cause and without notice. “For as long as both shall agree” Here no payment of rent as in a periodic tenancy has yet occurred. Once the payment is made, it is periodic.
• Tenancy at Sufferance: A situation that arises when a tenant continues to occupy the real property after his or her leasehold estate expires. This is wrongful possession by the tenant.
• 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, usually for a fee.
• License: A revocable right or privilege to come onto the land of another. Consider a baseball ticket at Minute Maid “Juice” Field.
EASEMENTS AND PROFITS
• Easements and profits can be created by
• implication, when the circumstances surrounding the division of a parcel of land imply its creation (for example, you need access to the only water well or sewer system in the combined parcels),
• necessity (e.g., an easement of access to a road to get to your land through another person’s property – the famous landlocked property), or
• prescription, when a person exercises an easement without the owner’s consent but in an open and obvious way that lasts long enough to bar the owner from stopping the use. For example, someone has been using the “back way” over someone’s land to get to their own property despite the fact another route is set aside, and this alternate access route has been used for a very long time.
• Effect of
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
(5) 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.
out the Deed on Exhibit 47-1 page 894- this is a classic “
• 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.
• Most sellers of real estate enlist the services of a licensed real estate agent or broker to present the property to prospective purchasers. In return for those services, the agent or broker receives a commission -- a percentage of the sale price.
• If a prospective buyer decides to purchase a property, she will generally first make a written offer and make a good faith deposit earnest money which will be held by an escrow agent and applied toward the purchase price if the deal closes, but will generally be returned only at the seller’s discretion if the deal falls through.
• All contracts for the sale of real estate should be written, and should include, at a minimum:
• the names and addresses of the parties,
• a description of the property,
• the closing date and time,
• the type of deed to be conferred by the seller, and
• the sale price.
• Title Examination: After the sales contract has been negotiated, a party designated in the contract will examine all recorded transfers of, liens and other encumbrances on, and sales of the subject property to ensure that the seller has a marketable title, free and clear of encumbrances, defects in the chain of title, and other title defects.
• Title is considered marketable even though the property is subject to zoning restrictions or public easements.
• If a title defect is found, the seller has breached the sale contract and the buyer may seek appropriate remedies.
• Buyers of real estate often purchase title insurance to protect against defects in title not discovered during the title examination.
• Mortgage: A loan for the purchase of real property made with the property as collateral.
• Closing/Settlement: The final step in a real estate purchase, in which all necessary documents are signed, title insurance is obtained, and title passes and is recorded on the appropriate deed.
LIMITS ON LANDOWNERS RIGHTS:
ADVERSE POSSESSION AND
• Adverse Possession: Acquiring title to real property by occupying it openly, without the consent of the owner, for a period of time specified by the applicable state statute. The occupation must be:
(1) Actual and Exclusive: The possessor must take sole physical occupancy of the property;
(2) Open, Visible, and Notorious: The possessor must occupy the property for all the world to see;
(3) Continuous and Peaceable: The possessor must occupy the property without abandoning for any period of time and without being interrupted by the true owner and/or the courts; and
(4) Hostile and Adverse: The possessor must claim the property against all the world, and cannot occupy it with the permission of the true owner.
A GOOD EXAMPLE: A surveyor mistakenly says you have five feet of land that in reality you don’t. You put a fence on the “line” you believe it to be, grow flowers, and pay taxes on what you believe to be your land. After about 10 years, you can claim it.
• Eminent Domain: The power of a sovereign government to take land from private citizens (i) for public use and (ii) with just compensation. For example, putting in roads or building dams/reservoirs.
• Zoning laws permit a state or municipality to regulate uses of land without having to compensate landowners. For example, making sure commercial entities don’t build in residential areas or vice versa. Usually these regulations make sense, but sometimes they don’t.
• If, however, the state restricts an owner’s use of property too much, the law will affect a taking (or confiscation), and may invoke eminent domain laws.
• A landowner may obtain a variance, thus permitting her to use her land notwithstanding a zoning law, if:
(1) the landowner cannot realize a reasonable return on the land as zoned;
(2) the zoning ordinance has a particular adverse effect on the person seeking the variance, rather than being similar for all owners in a zone, and
(3) granting the variance must not substantially alter the essential character of the zoned area.
• Building Permit: A permit issued, following review of a proposed building or renovation, by a local review board charged with enforcing zoning requirements and other public interests.
• Restrictive Covenant: A private restriction on the use of land.
• A covenant that applies to the initial purchaser of a property and all subsequent purchasers is said to run with the land and cannot be separated from the property. In order to be enforceable, such a covenant:
(1) must be set forth in a written document;
(2) must intend that the covenant run with the land;
(3) must touch and concern the land
However such covenants cannot run counter to the Constitution- for example, resale restrictions against persons based on race, creed, national origin, etc.