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0

Property AKA Ownership

Legal right to exclude others from resources that are
possessed or acquired without force, theft or fraud

1

Absolute

We can legally seek police or courts to protect some
resource or you can't

2

Property is not infinite

Can't use resources to harm another's resources

3

Examples of resources that aren't protected by our legal system?

Marijuana, sale of proscription drugs, sale of bald eagle
feathers

4

Property is the necessary foundation for...

Private enterprise and market in the modern nation

5

Communism

State requires citizens produce according to their abilities
And share according to needs of everyone else

6

Private property laws

Recognizes and enforces an individual's rights to acquire,
Possess, use and transfer scarce resources

7

3 types of property

Private, public and common

8

Private property

Protects private persons and allows them to exclude others
Including in most instances the state from interfering with
Resources

9

Public property

The states right to exclude people from state monuments,
Buildings, equipment, land and other public resources

10

2 meanings of common property?

1 right to common resources: air, rivers, oceans

2 private ownership by 2 or more people

11

Rule of law

All members of society must have equal guarantee

12

Property promotes incentive

Allowing people to keep and benefit from what they produce,
Property motivates effort in way natural to human beings

People expend more effort when they have protected
Property

13

How does property generate prosperity? 3.

1 promotes incentive
2 capital formation
3 divisibility of resources

14

Capital formation

Quality of resources that produces new and different
resources

Allows for borrowing money and investing

15

Mortgage

Agreement to put up house to secure loans

16

Lenders are willing to loan money at affordable rates because property law guarantees 3 things?

1 borrower's house is identifiable piece of land recognized
By the state
2 state recognizes borrower's claim to house
3 state permits lenders to enforce mortgage agreement
Through courts and sell borrower's house to satisfy loan
Borrower fails to repay

17

Securities markets are vital for...

Capital formation and prosperity in modern nations

18

Divisibility

Relates to capital formation

Refers to how property permits resources to be broken into
parts and used in many ways while owner retains property
Interest in each part

19

Examples of divisibility of property 6

1 sell land for cash
2 sell another part of it on credit
3 hold mortgage to ensure payment
4 have tenants pay rent
5 incorporate part of it and sell shares to investors
6 secure loan against property and start business

20

2 basic legal divisions of property

1 real property

2 personal property

21

Real property law

2 Personal property law

Applies ownership to land and interests in land such as
Meaning rights or leases

2 all other resources are protected under personal
Property law

22

Real estate AKA Realty

Land ownership

23

Fixture

Object of personal property that has become object of
Real property

24

2 ways objects become fixtures

1 physical annexation (attachment) to land or it's building

2 use has become closely associated with the use land
Is put (fixtures go to land with buyers unless written agreement)

25

2 examples of fixtures

Carpet is fixture when nailed to the floor

Manufacturing equipment is fixture when sold along with
Manufacturing plant

26

Rules of contract

Rules under which people exchange resources in property
System

Make exchange of resources between owners legally
Binding

27

What do contracts allow 3 things?

1 allow owners to commit to future exchange of resources

2 make it possible for 1 owner to sue another if exchange
Of resources are broken by 1 of the owners

3 allow lawsuits against those not adequately performing
their agreements

28

Single most important factor to see if country's economy is ready for international trade?

Observing legally enforceable contracts

29

Ownership: rule of first possession

1 first person to reduce previously unowned things to
possession becomes their owner

30

Ownership: Intent

Measure whether previous owner intended to abandon
Something

Lawsuits may follow if unclear whether previous owner
Abandoned possession

31

Possession of lost items

The finder must turn item over to police and place ads for
Certain period of time

If original owner doesn't come forward to claim item during
Period, the finder becomes the new owner

32

Adverse possession

Gives ownership of land under state statute

33

5 requirements of state statute for adverse possession?

1 open and notorious
2 actual and exclusive
3 continuos
4 wrongful
5 prescribed period of time

34

Adverse possession: open and notorious

Possessor must occupy land in such way to put true owner
Of land on notice

35

Adverse possession: actual and exclusive

Possessor must physically occupy land

Fences and buildings constitute occupation of land

36

Adverse possession: continuous

Possession must be uninterrupted

37

Adverse possession: wrongful

Possessor must not have owner's permission to be on
Land

38

Adverse possession: for prescribed period of time

Most state specify 10 to 20 years before possessor becomes
New owner

39

Ownership through confusion

Arises when fungible goods (goods that are identical)
Are mixed together

If no evidence is there when identical goods are sold,
everyone is entitled to an equal share

40

Doctrine of accession

When owner of old airplane engine has built and restored an airplane, the owner of the engine owns the whole airplane

41

Gift

Receiving a gift is way of acquiring ownership

42

Testamentary gift

Gift made through a will

43

4 different types of ownership?

1 Fee simple
2 life estate
3 leasehold estate
4 concurrent ownership

44

Estate

Bundle of rights and powers of land ownership

45

Fee simple

Maximum estate allowed under law

Owner has fullest legal rights and powers to possess, use
And transfer land

46

Fee simple absolute estate

No limitations or conditions attached

47

Fee simple defensible

May have condition attached to estate's transfer

Ex. Seller may convey land to buyer if they develop land
For agricultural purposes

48

Conveyance

Transfer

49

Life estate

Grants ownership in land for lifetime of specified person

When specified person dies, original grantor keeps reversion
Interest in the la d

50

Life estate: remainder interest

Land goes to another person other than grantor after
Death of specified person

51

Leasehold estate

Property right granted to tenants by landlords

52

Concurrent ownership

More than one person owns the same thing

53

Tenancy in common

2 joint tenancy

Tenants in common can own different shares of resources

2 tenants have equal ownership shares

54

Joint tenancy: right of survivorship

One of joint tents dies, the other becomes the sole owner
Of entire resource

55

Tenants

Have qualified possession, use and transfer of land

They can't damage it by law

56

Doctrine of partition

Allows owners or creditors of joint tenancy or tenancy in
Common to force separation of concurrent ownerships

57

Title

Registration of ownership of property

58

Deed

Document of title that transfers ownership of land

Contains precise legal description of land that specifies
Exact location and boundaries according to mapping
And surveying system

59

Grantor
2) grantee

Seller

2 buyer

60

Warranty deed

Promises buyer that grantor has good ownership and
Full power to convey it

61

Quitclaim deed

Makes no guarantee other than grantor surrenders all claim
Against land

62

Registration statutes

Protect buyers and lenders

Law enables buyers to register their deeds to land and
Lenders to register mortgage claims against land

63

Easement

Right of passage to cross over land

64

Bailment

2 bailor
3 bailee

Owner puts object protected by personal property into
Intentional possession of another person with understanding
It will be returned

2 owner
3 possessor of object

65

2 types of security interests

1 mortgages

2 secured transactions

66

Secured transactions

Legal fence that protects holder of security interest from
General claims of all other persons

Can be seized from debtor if they are unable to make their
Payments

67

3 types of security interests in land

1 mortgages

2 deeds of trust

3 land sales contracts

68

Under the Deed of trust

Borrower signs note, which shows borrower's debt to
Lender

Signs deed of trust which grants lender security interest in
Land and building put up to secure the loan

69

Deed of trust: Trustee

Third party that holds full ownership of land under deed of
trust until the debtor repays the entire deed

70

Land sales contract

Owner of land sells it by contract subject to condition that
Seller retains title of land until buyer pays purchase price

Until that time, buyer has legal right to possess and use
Land and is responsible for insurance and taxes

71

Motgagees

2 mortgagors

Creditors

2 debtors

72

Recording statutes

If mortgagees fail to record mortgages, new buyers of
Lands who are unaware of mortgages will take lands
Free and clear of mortgages

73

Foreclosure

Creditor must go through court system to ensure procedure
Is properly followed before debtor's lose home and land

74

Deficiency

Balance owed to mortgagee by mortgagor

75

Right of redemption

Before actual foreclosure allows mortgagor to get back land
Upon payment of full amount of debt including all interest
Costs