CHAPTER 8 - Real Property Rights, Lecture notes of Business

Download CHAPTER 8 - Real Property Rights and more Lecture notes Business in PDF only on Docsity! CHAPTER 8 Real Property Rights SALES ASSOCIATE COURSE Real Estate • Surface of the earth and all improvements (artificial things attached to the land) • Subsurface • Air above the surface • Mineral deposits, wildlife, timber, fish, water and soil Real Property • Real estate plus the legal bundle of rights Nature of Property • Personal property that has been attached to real estate being used in the conduct of business • Not considered part of the real estate • Can be removed at lease terminationTrade Fixture • Real property (Fixture) is included in the sale • Personal property is not included with a sale • Unless listed in the contract. • Disagreement as to whether an item is a fixture • Courts would have to determine, • When in doubt – Write It Out Fixture Four Court Tests: • Intent - item was meant to become part of the real property • Relationship - e.g. landlord/tenant or seller/buyer • Method of Annexation - how item was installed • Adaptation - item designed for or necessary to nature of the property Court Test - Fixture Freehold Estates • Ownership for Indefinite duration • Fee Simple – most comprehensive estate • Life estate • Most comprehensive estate • Absolute and complete • Buyer receives unless contract specifies something less • Four types of Freehold Estates 1. Estate in Severalty 2. Tenancy in Common 3. Joint Tenancy 4. Tenancy by the Entireties Fee Simple Ownership by 1 owner Estate in Severalty Unities of Title • Possession • Interest • Time • Title • Right of Survivorship Joint Tenancy Joint Tenancy • Joint Tenancy • Unities of title must be equal and the same • Must state it has the right of Survivorship • Cannot leave interest in a will • Ownership by legally married spouses • The marriage owns the property • Neither spouse owns any individually • Includes the right of survivorship • Divorce • Ownership converts to a tenancy in common Tenancy by the Entireties Life Estate • Ownership tied to duration of someone’s life • Owner must maintain the property and not permit Waste • While the life estate exists • Reversion estate - ownership will return to the original grantor • Remainder estate - ownership will pass to a third party Life Estate Non-freehold or Leasehold Estates • Not ownership – right of possession and use • Three types • Tenancy at Will • Tenancy for Years • Tenancy at Sufferance • Tenancy at Will - tenant has possession with the owner’s permission • Without specific term • May be terminated with proper notice • e.g. 15 days for a month to month • Tenancy for Years • Definite termination date • Created with a written lease • Owner has estate in reversion • Tenancy at Sufferance - tenant in possession without the owner’s permission • Holdover tenant • May be terminated without notice Non-freehold Estates Probate laws: • Allows property to pass to legal heirs • Owner dies intestate (without a will) • No lineal descendants or lineal descendants of both spouses • Spouse receives fee simple • With lineal descendants not from both spouses • Spouse receives 1/2 • Lineal descendants divide balance of property Owner dies testate (with a will) • Laws of descent and distribution do not apply • Personal representative named in will • Verifies that property was distributed according to will Descent and Distribution • Size • Outside municipality - 160 acres • Inside municipality – Half acre • Tax Exemption • Up to $50,000 maximum deducted from assessed value before calculating property tax • Other exemptions – Chapter 18 Constitutional Homestead Rights • Homestead property is not protected from forced sale for direct liens such as; • Real property taxes • Special assessments • Mortgages • Vendor’s liens • Construction liens Exemption from Forced Sale • Main documents • Rules of the Association • Assessment shares, etc. • Question and Answer Sheet • Provides buyers with answers to common questions Condominiums Condominiums • Rescission Period • 15 days receipt from developer • 3 business days for resale • Title is held by a Corporation • Owners receive shares of stock instead of real estate • Owners receive a proprietary lease • Enjoy same benefits as if they owned unit • Real estate tax deductions • Equity buildup as master mortgage is paid down • Appreciation in property – stock value goes up • Rescission Period • 15 days for New • 3 business days for resale Cooperative Association