Real Property

Chapter 49Real PropertyCopyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Real Property (Definition):Land, including anything permanently affixed to the land49-2“Fixture” (Definition):Any item that was originally a piece of personal property, but became part of realty after it became permanently attached to real property49-349-4Exceptions To “Fixture” Status:Written agreement between parties that specific items will continue to be treated as personal property Personal property attached to realty for use of a business renting property (in a commercial lease arrangement)Such property is known as a “trade fixture”Example: Barber chairs in a barber shop49-5Interests In Real PropertyFee Simple Absolute: Right to possess for life and devise (will) to heirs upon death; the most complete interest in real propertyConditional Estate: Interest comparable to fee simple absolute, except that interest will terminate on occurrence/non-occurrence of a specified conditionLife Estate: Granted for lifetime of an individual; right to possess property terminates upon life estate holder’s death, and property will pass to another party designated by original grantor49-6Interests In Real Property (Continued)Future Interest: Person’s right to property ownership and possession in the futureLeasehold Estate: Right to possess property for a stipulated period of timeEasement: Irrevocable right to use a portion of another’s land for a specified purpose49-7Nonpossessory EstatesEasement: Irrevocable right to use some part of another’s land for a specific purpose without taking anything from the landExample: Utility easementProfit: Right to enter another’s land and take part of the land, or take away a product of itExample: Right to harvest timberLicense: Temporary, revocable right to use another’s propertyExample: Theatre ticket49-8Co-Ownership Of Real PropertyTenancy In Common: Equal/unequal shares may be held, creditors can attach any owner’s interest, and deceased owner’s share is transferred to heirsJoint Tenancy: Equal share, creditors can attach any owner’s interest, and deceased owner’s share reapportioned equally among surviving joint tenantsTenancy By The Entirety: Available to married couples only; shares are equal, one owner’s creditors cannot attach property, and deceased owner’s share passes to surviving spouse49-9Co-Ownership Of Real Property (Continued)Condominium Ownership: Owner acquires title to a “unit” within a building, with undivided interest in the land, buildings, and improvements of the common areas of the developmentCooperative Ownership: Investor resident acquires stock in the corporation owning the facility and receives a permanent lease on one unit of the facility49-10Voluntary Transfer of Real Property Requires:Execution—preparation and signing of deed;Delivery—of deed to grantee, with intent of transferring ownership to grantee;Acceptance—grantee’s expression of intent to possess and own property;Recording—filing deed with appropriate county office to protect interests of grantee49-11Deed RequirementsIdentification of grantorExpression of grantor’s intent to convey the propertyLegally sufficient description of the property (including its physical boundaries and any easements)Any warranties/promises made by grantor with the conveyance49-12General Warranty Deed Contains the following promises/representations:Grantor owns interest he/she is conveyingGrantor has right to convey the propertyNo mortgages/liens against property that are not stated in deedGrantee will not be “disturbed” by anyone who has better claim to property title, with promise to defend grantee’s title against such claims, or to reimburse grantee for any money spent in defense and/or settlement of such claimsGrantor will provide grantee with any additional documents that grantee needs to perfect his/her title to property49-13Other Types of Deeds:Special Warranty Deed: No representation of guarantees contained in “general warranty” deed; grantor is merely promising that he/she has not done anything to lessen value of property transferredQuitclaim Deed: No warranties; grantor simply conveys whatever interest he/she holds49-14Types of Involuntary Transfers:Adverse Possession: When person openly treats real property as his/her own, without protest/permission from real owner, for statutorily-established period of time, ownership is automatically vested in that personCondemnation: Government acquires ownership of private property for “public use” for “just compensation” over the protest of the property owner49-15Restrictions On Land UseRestrictive Covenants: Promises to use/not to use land in particular waysZoning: Restriction of use of property to allow for the orderly growth and development of community and to protect “health, safety, and welfare” of its citizens