CH. 6 Owning it: Estates and Interests

Question 1

What does the term real estate mean?

Answer 1

“The land all natural and artificial improvements permanently attached to it.”

Question 2

What is an improvement?

Answer 2

Something that is built on and permanently attached to the land.

EX: A house, detached garages, landscaping, walks, and driveways.

Question 3

What does real property mean?

Answer 3

“Land, natural, and artificial improvements, and all the rights, benefits, and interests that go with owning a piece of land and the improvements.

Question 4

What is Personal Property?

Answer 4

Anything portable, moveable, and not permanently attached to the real estate. (Anything of Value that is not real estate)

Question 5

What is something that was personal property and now real estate called?

Answer 5

a fixture

Question 6

If lumber is delivered to a home to build a deck, is there lumber considered personal property?

Answer 6

At the time of delivery, the lumber is personal property, but once it is used to create a deck, the lumber is not part of the real estate, it is a FIXTURE.

Question 7

Are grandma’s ornamental trees and pushes in the yard personal property?

Answer 7

The seller must dig these up before listing the property or specify in the contract that they are to be removed.

Question 8

Are agricultural crops a fixture or personal property?

Answer 8

Personal property. It depends on when land was sold.

Question 9

What 4 legal tests are commonly used to determine if a piece of personal property is a fixture?

Answer 9

Adaptation of an item to the real estate: When personal property is customized to fit in the house. (EX- a custom bar in a finished basement)

Existence of an agreement: An agreement between 2 parties in advance to define what is considered personal property and what is a fixture.

Method of attachment: Deals with how personal property is attached to the building. ( A bookcase with one screw in wall- personal, and a bookcase with a mold and base attached to wall- a fixture)

Relationship of the parties: When a tenant, usually in a rental property attaches fixtures. (A jewelry store attaching Jewlery cases). The tenant is usually able to take and required to remove.

***If tenant leaves these, landlord can claim them. These are called trade fixtures.

Question 10

What is the bundle of rights?

Answer 10

A theory describing the specific rights associated with real estate ownership.

Question 11

What rights are included in the Bundle of Rights?

Answer 11

Rights included:

To use and occupy
mine and farm
develop the property
Will, give, and restrict others
Not do any of these with property

Question 12

What are the characteristics of a freehold estate? Name the two main types of freehold estates.

Answer 12

Must include ownership of real estate and must last for an indefinite or indeterminate period of time that be forever, or for the lifetime of the person with the interest in the real estate.

Fee estates
Life estates

Question 13

Describe Fee Simple

Answer 13

Also called: “Fee Simple Absolute” or “Indefeasible Fee”

The Fee estate is the most complete form of ownership without limitations on rights of ownership.

Exception: there can be both public and private restrictions on what can be done with the property (EX: Zoning ordinances and deed restrictions)

Question 14

What are the 3 Fee simple Qualified estates?

Answer 14

Has limitations.
3 types of Fee simple qualified estates:
Fee simple condition precedent
Fee simple condition subsequent
Fee simple determinable

Question 15

Fee simple condition precedent

Answer 15

Ownership(Title) won’t pass from one person to another until a particular condition is met.

EX: Someone who donates property to the county for use as a park with the stipulation that nature trails must be built before the title passes.

Question 16

Fee simple condition subsequent

Answer 16

The form of estate where the grantor (original owner) can reclaim property if some condition isn’t met after the title has been passed to next owner.

EX: Property donated to county requires nature trails be made, however county decides to create something else. Grantor can take action to reclaim property.

Right of reentry- Right to reclaim property.

Question 17

Fee simple determinable

Answer 17

Title remains with the new owner as long as conditions of ownership are being met. When the conditions stop being met, ownership of property automatically reverts back to the original owner without original owner having to take action.

Question 18

What is a Life Estate

Answer 18

Grants possession and limited ownership of a property to a person for the duration of the recipient’s life or the life of another person.

Question 19

What is the main difference between a Fee estate and a Life Estate?

Answer 19

A Fee estate has no time limit while a Life estate does have a time limit.

Question 20

What are the two types of Life Estates?

Answer 20

Ordinary life estate
Life estate pur autre vie

Question 21

Ordinary Life Estate

Answer 21

The length of time of the estate interest is the lifetime of the person receiving the estate.

Question 22

What is a “remaindermen”?

Answer 22

A person(s) who is entitled to a life estate after the death of the recipient.

Question 23

What does Pur Autre Vie mean?

Answer 23

For another life

Question 24

Life estate pur autre vie

Answer 24

The length of time of the estate interest is the lifetime of a third party.

Question 25

What are littoral rights?

Answer 25

Water rights for properties abutting: a bay, large lake, ocean, or sea.

Owners have unrestricted right to use of water.

Have ownership of the land up to the average mean high water mark. Government owns land below that point.

Littoral rights= Appurtenant (They come with the land).

Question 26

What does Appurtenant mean?

Answer 26

Something that comes with the land.

“_____ is Appurtenant to the land.”

Question 27

What are Riparian rights?

Answer 27

Rights of property owners who own land abutting a stream or river.

If the body of water is navigable, then the government claims ownership. The property owner only owns the land up to the water.

If the water is not navigable, the landowner owns the water.

In either situation, the property owner still has a right to use of water.

Cannot contaminate, drain, or interrupt flow of water.

Question 28

Doctrine of prior appropriation

Answer 28

Places the right to control water in the hands of the state. This law can vary state to state. Usually used in states where water resources are limited.

Question 29

Explain Air rights

Answer 29

A landowner has right to the infinite airspace above their land so long as they do not interfere with aircraft traffic.

A property owner can sell the airspace as well while retaining ownership to the land and building.

EX: A property owner sells a 3-story property. The original owner still owns the land below and the 3-story building. However, if the new owner decided to build on top of the 3-story building, the new owner would own this part of the building.

Question 30

Describe surface rights

Answer 30

Right to do whatever is legally permitted on the surface of the property.

Generally, include construction of structures and physical improvements of all kinds like planting crops.

Question 31

Development Rights

Answer 31

Right to build on a piece of property. Can be sold separately from the land.

Question 32

Subsurface and mineral rights

Answer 32

Right to use the property beneath the surface or to permit others to use it.

EX: Many permit companies to extract oil and gas from beneath their property. This includes the development of structures to do so.

Many also sell their land while retaining their mineral rights.

Question 33

Mineral rights

Answer 33

Right to take minerals out of the ground. Usually, oil and gas. Can be sold separately.

Question 34

Land, Improvements, and all the rights of ownership is a good definition of:

A. land ownership
B. real estate
C. real property
D. property

Answer 34

B. real property includes the land, structures, and all rights associated with the ownership.

“Real estate” - only includes the land and structures.

Question 35

Which of the following is not a fixture?

A. A fence
B. A Dishwasher
C. A painting hanging on the wall
D. A dining room chandelier

Answer 35

C. A painting hanging on the wall.

Question 36

When antwon wants to donate property to a conservation group, he agrees that the organization can take title to the property as soon as the education center is built on the property. What kind of estate is antwon creating?

A. Fee simple Absolute
B. Fee simple condition precedent
C. Fee simple condition subsequent
D. Fee simple determinable

Answer 36

B. Fee simple condition precedent

(This gives the condition that something must be done before the transferring of ownership/title)

Question 37

Sally owns a house that she will allow her sister Fran to live in for the rest of Fran’s life. After Fran’s her death, the house will go to Sally’s children. Which of the following best describes the situation?

A. Ordinary life estate
B. Life estate pur autre vie
C. Fee simple condition subsequent
D. Leasehold estate

Answer 37

A. Ordinary life estate

(Interest conveyed to a person for the rest of their life)

Question 38

Joe rents office space from Fred. What type of interest does Joe have?

A. Leasehold interest
B. Leasehold fee interest
C. Fee simple defeasible
D. Fee simple absolute

Answer 38

A. Leasehold interest

Question 39

You own property on a river that has regular commercial boat traffic. What rights do you most likely have with respect to the water.

A. You own to the centerline of the river
B. You have no rights to the water
C. You have right to use the water and own to the edge of the river
D. You can use the water and own the land under the water to the midpoint of the river, but the state owns the water.

Answer 39

C. You have right to use the water and own to the edge of the river

Question 40

What are the rights called for oceanfront property?

A. Riparian rights
B. Littoral rights
C. Defeasible rights
D. Qualified rights

Answer 40

B. Littoral rights

Question 41

The right of the state to control water rights in some states is called?

A. the bundle of rights theory
B. littoral rights
C. riparian rights
D. the doctrine of prior appropriation

Answer 41

D. the doctrine of prior appropriation

Question 42

The theory that best describes the rights that you get with a piece of real estate is:

Answer 42

The bundle of rights

Question 43

Receiving back the property you gave in a life estate when the life estate ends is best described as:

A. conveyance
B. transfer
C. reversion
D. remaindering

Answer 43

C. reversion

• A remainder conveys the property to a 3rd party.
  *Conveyance and transfer are usually associated with straight changes in ownership