L8: Property Rights, Estates, Condos, HOA, Etc.

Question 1

What are the bundle of rights associated with real estate ownership?
(6)

Answer 1

1) Right of exclusion (no trespassing)
2) right of possession (a.k.a. right to use, occupy/live)
3) right of disposition (a.k.a. ride to transfer, sell/lease/will)
4) right of quiet enjoyment
5) right of control (alter, change or improve)
6) ride to encumber (put property as collateral)

Question 2

Surface rights

Answer 2

Rights to access the surface area of the parcel (natural elements and structures)

Question 3

Subsurface rights

Answer 3

Ownership rights to everything found beneath the surface
A.k.a., mineral rights

May be sold separate from surface rights and has priority over it

Cannot undermine lateral support (adjacent properties) or subjacent support (underline earth)

Question 4

Air Rights

Answer 4

Right to use air space above the surface of land

Question 5

Riparian Rights versus Littoral Rights

Answer 5

Riparian Rights:
- currents use of flow and water (EX. River, creeks, etc.)
– has right to use, but no ownership when navigable,
- rights to use to water’s edge when non-navigable,
- rights to use to midpoint

Littoral Rights:
- Always navigable, governs rights to use lakefront and ocean front properties
– right to use but cannot artificially change water’s location

Question 6

Accession

Right

Answer 6

Right to all that the property produces (naturally or by human action)

Question 7

Accretion

Answer 7

GRADUAL increase in land area through deposits of soil by natural forces

Question 8

Alluvion

Answer 8

Soil that gets deposited through accretion

Question 9

Erosion

Answer 9

Gradual loss of the land over time

Question 10

Reliction

Answer 10

Gradual increase in land when water gradually withdraws

Question 11

Avulsion

Answer 11

SUDDEN Loss of land by flood or stream/river change of direction/course

Question 12

Land VS. Real estate VS. Real property

Answer 12

Land = includes surface of the earth, minerals under an air above

Real estate = land + improvements (non-natural structure built or affixated to land)

Real property = land + improvements + bundle of rights associated with real estate ownership (lifespan is usually forever and conveyed by deed) + fructus naturales (trees, uncultivated plants, decorative)

Question 13

Personal property

Answer 13

Unattached, movable asset that usually goes with the seller (unless specified in a contract), A.k.a., chattel

Normally has a limited lifespan and it’s conveyed by a bill of sale or requested in a will

Fructus industriales & emblements (Annually cultivated crops)

Question 14

Fixture and Trade Fixture

Answer 14

Fixture = Real property + object that is firmly attached to the land

Trade fixture = personal property owned and needed for a tenant’s business. Are property of the tenant.

Question 15

Affixation/Annexation

Answer 15

Process of creating a fixture (from personal to real property)

Types:
– close association (conceptual linkage to property, ex. Garage door opener)
– adoption (customization of personal property for use with real property, ex. Drapes)
– agreement

Question 16

Severance

Answer 16

Converting real property into personal property

Question 17

Tests to see if it is a fixture

4

Answer 17

1) Method of attachment (probable damage to remove = fixture)
2) adaptability (adapted or integral to home = fixture)
3) relationship or agreement of the parties (business or personal)
4) intent (when item was installed)

Question 18

Right of Survivorship

Co-ownership

Answer 18

Right that gives the right to the property when co-owner dies to the surviving party and not deceased’s heirs.

Question 19

Tenancy in Common

Answer 19

TIC Agreement

Type of co-ownership agreement that has:
- right of inheritance
– ability to own unequal shares of the property
– unity of possession (enjoy the property)

Question 20

Joint Tenancy

Answer 20

Type of co-ownership agreement in which:
– parties have equal and undivided interest in the property
– has the right of survivorship

If shares are sold while alive, the new owner becomes a tenant in common

Question 21

What does it mean to “have an estate“?

Answer 21

To have a possessory interest in real property
It is a present interest

Can be: freehold or leasehold

PS: non-possessory interest = future interest

Question 22

Freehold Estate

Answer 22

Individual with interest have some degree of ownership for an undetermined/unspecified time

Can be Free Simple or Life Estate

Question 23

Free Simple Estate and the types (2)

Answer 23

A type of Freehold Estate

The most unlimited an absolute and most common for average homeowner

Can be:
ABSOLUTE = without restriction
DEFEASIBLE = perpetual ownership on the condition of that property is used for a certain purpose under specific conditions. If stipulation is violated, ownership reverts to original owner.

Has full bundle of rights connected to the property

Question 24

Encumbrance

Answer 24

Restriction or limitation on a property that runs with the land and burdens the title

Question 25

Types of Defeasible Estate | freehold estate

Answer 25

Based on the conditions attached, can be: A) Determinable = title automatically reverts to original owner if deed requirements are violated, there is no need to take legal action. B) Condition subsequent = grantor of the estate must prove in court the condition was violated, the change of ownership is not automatic.

Question 26

Life Estate and types (2)

Answer 26

It is a type of Freehold Estate. - It is limited to the duration of a measuring life. - can create future interest for next in line to receive it (reversionary or remainder interest) - can be: Conventional Life Estate or Legal Life Estate

Question 27

Reversionary VS. Remainder interest | Life estate future interest

Answer 27

They are types of future interest created in Life Estate. Reversionary Interest = upon death of owner, full ownership reverts back to grantor. A.k.a., Right of Reverter Remainder interest = upon death of person whom the Life Estate is based on, the interest will pass to another party other than the grantor. Future remainder interest recipient is the Remainderman.

Question 28

Act of waste

Answer 28

When life estate tenants do something to diminish the value of the property

Question 29

Conventional life estate and types (2)

Answer 29

Any estate created by owner through grant Can be: A) Ordinary = measure in life is that of the tenant B) Pur Autre Vie = Measuring life is someone other than the tenant

Question 30

Legal life estate and types (3)

Answer 30

Type of life estate created by state law with the focus to look out for a deceased’s survivors Can be: A) Power & Courtesy = right to inherit upon spouse’s death, not recognized in FL. B) Elective Share Law = allows for living spouse to make a claim to their deceased spouse‘s property despite will. In FL can be claimed up to 30%. C) Homestead Law = prevents someone’s primary residence from being forcibly sold to pay certain types of debt. Requires the signature of both spouses to sell. Properties that are homesteaded are exempt property.

Question 31

``` Leasehold Estate (what, parties involved & types) ```

Answer 31

Interest in the occupation of a property established through a lease. Doesn’t include ownership, just occupancy. Have a definite duration set through the lease. Parties: - landlord (lessor), permanent interest, reversion Estate – tenant (lessee), temporary interest, leasehold Estate Types: - Estate for Years - Periodic Estate - Estate at Will - Tenancy at Sufferance

Question 32

Estate for Years | Type of Leasehold Estate 1/4

Answer 32

Type of Leasehold Estate Has a specific starting and ending date Once lease is expired, no need to act to terminate it Does NOT automatically renew

Question 33

Periodic Estate | Type of Leasehold Estate 2/4

Answer 33

Type of Leasehold Estate Exists for a fixed period of time without specific end date Renews automatically (“Periodic Tenancy “) One of the parties must act to terminate it

Question 34

Estate At Will | Type of Leasehold Estate 3/4

Answer 34

Type of leasehold Estate Has a starting point but not an actual ending point Can be an oral agreement, once rent is paid it becomes a Tenancy at Will Requires action from one party to terminate it

Question 35

Tenancy at Sufferance | Type of Leasehold Estate 4/4

Answer 35

Type of Leasehold Estate Created when a tenant overstays the term of the lease without consent from landlord Tenant = holdover tenant Accepting rent doesn’t create a rental agreement and rent can be charged double

Question 36

Community development district

Answer 36

Special district created by developers and gives designated support infrastructure to a specific community CDD does special assessments Properties in CDDs must provide disclosure above contract signature line

Question 37

Condominium

Answer 37

Type of common interest ownership property Owner has separate interest in their own unit and undivided interest in common areas Ownership levels: - Interior of unit = fee simple absolute - Common elements = tenants in common Limited common elements = areas of undivided interest but only used by a few or one (ex.marked parking) Owners must pay maintenance fees to HOA Can be self-managed (owners + board) or property manager-managed Condominium Association = nonprofit ran by Board of Directors for operating purposes

Question 38

Condominium Disclosure Documents | 4+2 or 4+3

Answer 38

1) condominium declaration (once filled, it creates the condominium) 2) articles of incorporation 3) bylaws 4) FAQs If buying from developer (15 to cancel if purchased): 5) Propsectus 6) Estimated Operating Budget If resale (3 days to cancel): 5) Most recent annual financial report 6) Rules of Condo Association 7) Governance form

Question 39

Co-ops

Answer 39

Build owned by a corporation (residence or shareholders) Owners have proprietary lease is for their unit Ownership is in the corporation/co-op, not the unit itself There is maintenance fee and board The corporation has Fee Simple or Leasehold Estate state on land New buyers must be approved by the board It’s a type of Common Interest Ownership Property

Question 40

Co-op Disclosure Documents | 1 or 4

Answer 40

Co-ops with 20+ units must provide: prospectus (15 cancellation period) Re-sale must provide (3 day cancellation): 1) articles of incorporation 2) rules of the association 3) bylaws 4) FAQs

Question 41

Timeshares | Types of ownership/use + disclosure docs

Answer 41

Type of common interest ownership of property Has: A) interval ownership = portion of unit owned as fee simple & interest is proportional to time purchased or B) right to use = it’s in the state for ears and at the end of the agreement, ownership reverts to developer Disclosure documents (10 day cancellation): 1) listing agreement 2) contract

Question 42

Tenancy by Entirety

Answer 42

For married couples only Has: - right of survivorship - each spouse has equal & undivided interest in the property Requires unity of person

Question 43

Separate property

Answer 43

Property owned by a married person that is separate and not co-owned by their spouse

Question 44

HOA

Answer 44

Homeowners association Corporation responsible for the operation of a development and with the power to charge fees and levy assessments Membership is mandatory