Physical Characteristics of Land
immobility, indestructibility, heterogeneity
Economic characteristics of Land
demand, utility, scarcity, transferability, situs
Ownership of real estate and the bundle of rights associated with owning the real estate
real property
Ownership of anything that is not real estate, and the rights associated with owning the item (chattels or personalty)
personal property
Physical, visible and material
tangible property
abstract, having no physical existence in itself, other than as evidence of one’s ownership interest
intangible property
Types and uses of real property
residential, industrial, commercial and agricultural
Property that has a unique use for the persons who own and use it, such as churches, hospitals, schools and government buildings - public open space and rec areas
special purpose real estate
Land can be laterally severed into what?
surface, air and subsurface rights
Rights that concern properties that border bodies of water that are NOT moving
littoral
Rights that concern properties that border moving water (steams and rivers)
Riparian Rights
Personal property item that has been converted to real property by attachment to real estate
fixture
Federal land regulations primarily concern
broad standards of real property usage, natural disaster, land description and discrimination
State land regulations primarily concern
primary regulatory entities of real estate business, license laws and qualification
Local land regulations focus on
land use control, control of improvements, taxation - have the power to levy real estate taxes
Judicial land regulation primarily concerns
real estate ownership and use through decisions based on case law and common law, distinguished from statutory law
accurately locates and IDs the boundaries of the subject parcel to a degree acceptable by courts of law in the state where the property is located
legal description
What is a legal description required for
public recording, creating a valid deed of conveyance or lease, completing mortgage docs, executing and recording other legal docs
IDs the boundaries of a parcel of real estate using reference points, distances and angles
ALWAYS IDs an enclosed area by starting and retiring to the origin point (pob)
metes and bounds
Inadequate as a legal description method for irregular shapes
rectangular survey system
Single designated meridian for identifying townships in the geographical jurisdiction
principal meridian
every 24 miles east and west of a principal meridian
guide meridian
designated lien for identifying townships
base parallel
every 24 miles north and south of a base parallel
correction line
24x24 square created by the intersection of guide meridians and standard parallels
check or quadrangle
North and South area between meridians
range
East and West area between two parallels
tier or township strip
used to describe properties in residential, commercial and industrial subdivisions
recorded plat method
standard elevation reference points
datums
local elevation markers that provide elevations for nearby properties
benchmarks
ownership of any combo of the bundle of rights to real property, including the rights to possess, use, transfer, encumber and exclude
interest
owner’s interest in a property in which 2+ parties share ownership
undivided interest
if a private interest holder does not have the right to possess the interest is an __
encumbrance
if the interest holder is not private the interest is some form of
public interest - police power, eminent domain, or escheat
an estate limited to the life of the owner
life estate
freehold estate of potentially unlimited duration is a
fee simple estate
Perpetual estate that is NOT conditioned by stipulated or restricted uses - may be freely passed on to heirs
fee simple absolute
ownership can continue indefinitely, provided the use of the property conforms to certain stated conditions
fee simple defeasible
types of fee simple defeasible
determinable and condition subsequent
freehold estate that is limited in duration to the life of the owner or other named person - upon the death of the owner, the estate passes to the original owner or another named party
life estate
examples of legal life estate
homestead, dower, and curtesy and elective share
life tenant damages or misses the property
act of waste
Estate for years
has a definite beginning and ending date
does not require notice to terminate at the end of term
renewal is not automatic
Estate from Period to Period
No definite ending date
either party may terminate tenancy by giving proper notice to the other party
Estate at will
landlord lets you stay without a lease
notice can be given by either party without warning
death of either party immediately terminates tenancy
Estate at Sufferance
Holdover tenant is in unlawful possession of the property
Landlord must evict a tenant through the courts; cannot lock the tenant out, turn off utilities, or forcibly remove the tenant
Tenant acquires a _ interest
leasehold
Landlord acquires a _ _ estate
leased fee
buyers and creditors must take their respective interests subject to the terms of the lease
conveyance of leased property
if a single party owns the fee or life estate, the ownership is a tenancy in severalty
sole ownership
- 2+ owners
- identical rights
- interests individually owned
- electable ownerships shares
- no survivorship
- no unity of time
- partition suit
tenancy in common
- unity of ownership
- equal ownership
- transfer of interest
- survivorship
joint tenancy
types of co-ownership
- tenancy in common
2. joint tenancy
How to create a joint tenancy?
all owners must acquire the property at the same time, use the same deed, acquire equal interests, and share in equal rights of possession
sale of an interest, bankruptcy, foreclosure or partition suit
termination of joint tenancy
- survivorship
- equal, undivided interest
- no foreclosure for individual debts
tenancy by the entireties
termination of tenancy by the entireties happens when
death of either spouse, divorce, mutual agreement or foreclosure
property rights of legal spouses before, during and after marriage as well as after death of either spouse
community property
_ property belongs to one spouse, _ property belongs to both spouses
separate, community
a spouse may GAIN equitable interest in separate property it
- value of the separate property increases during the marriage
- community property funds were used to discharge any debt on the separate property
rules of the ups apply to partnership formation, asset ownership, fiduciary duties, dispute resolution and partnership termination
tenancy in partnership
fee owner transfers legal title to a fiduciary who manages the estate for the benefit of the beneficiary
estate in trust
_ has fiduciary duties to the _ and the _ to maintain the condition and value of the property
trustee, trustor and beneficiary
allows the trustor, during their lifetime, to convey title to a trustee for the benefit of a third party
living trust
structurally and mechanically the same as a living trust, except that it takes effect only when the trustor dies
testamentary trust
allows the trustor to convey the fee estate to the trustee and to name themselves the beneficiary - applies only to real property
land trust
beneficiary’s interest in a land trust is
personal property
co-op lease is called a _ lease because the tenant is an owner (proprietor) of the corporation that owns the property - lease has no stated or fixed rent
proprietary
fee or leasehold interest in a property whose owners or tenants agree to use the property on a periodic, non-overlapping basis
time share
tenant agrees to rent the property on a scheduled basis according to the terms of the lease
time share lease
another’s right to use or take possession of a legal owner’s property, or to prevent the legal owner from enjoying the full bundle of rights in the estate
encumbrance
interest in real property that gives the holder the right to use portions of the legal owner’s real property in a defined way
easements
gives a property owner a right of usage to portions of an adjoining property owned by another party
easement appurtenant
granted because of a circumstance of necessity, most commonly the need for access to a property
easement by necessity
generally provide for severalty ownership of half of the wall by each owner, or at least some fraction of the width of the wall
party wall agreements
personal right that one party grants to another to use the grantor’s real property - can be commercial or personal
easement in gross
Easements may be created by
- voluntary action
- necessity
- prescriptive operation of law
- grant or reservation
- implication
- government power of eminent domain (condemnation)
Easements are terminated by
- express release of the right by the easement holder
- purposeful abandonment by the dominant tenement
- condemnation through eminent domain
unauthorized, physical intrusion of one owner’s real property into that of another - may diminish property’s value, particularly when being sold
encroachments
personal right that a property owner grants to another to use the property for a specific purpose - not transferrable, do not attach to the land - cease on death of either party or sale of property
license
limitation imposed on a buyer’s use of a property by stipulation in the deed of conveyance or recorded subdivision plat - are covenants or conditions
deed restrictions
if a property is being sold, all liens should be paid in full before the property transfers ownership
lien effect on title
if statutory law imposes an involuntary lien
statutory lien
if a court action imposes an involuntary lien
equitable lien
receive first payment from the proceeds of a foreclosure
superior liens
examples of junior liens
ad valorem, assessment, estate tax
federal income tax, state corporate income tax, state intangible tax, state corporation franchise tax
debtor may obtain a writ of execution if
proceeds from foreclosure does not cover all debt
which estates are exempt from judgement liens?
homestead and joint tenancy
secures a purchase money mortgage, a seller’s loan to a buyer to finance the sale of a property
vendor’s lien
may be placed by a buyer when the seller has not delivered the title after all other terms of the contract have been satisfied
vendee’s lien
recorded if the owner can prove that they have a net worth of at least 2x the amount of the bail - homesteads cannot be levied against
surety bail bond lien
if an employer owes back wages to an employee
wage lien
secures the cost of labor, materials and supplied incurred in the repaid or construction of real property improvements
mechanic’s lien
someone who possesses all ownership interests owns _ _
legal title
right to obtain legal title to a property in accordance with a contract between the legal owner and a buyer
equitable title
learning something through direct experience or communication
actual notice
knowledge of a fact that a person could have or should have obtained - recordation of ownership docs in public records
constructive notice or legal notice
types of title transfers
voluntary alienation and involuntary alienation
public/private grant - a living owner makes a private grant by means of a deed of conveyance
voluntary alienation
transfer by will
private grant that occurs when the owner dies
transfer without the owners consent - occurs by the processes of descent and distribution, escheat, foreclosure, eminent domain, adverse possession and estoppel
involuntary alienation
In the Torrens System, title passes only when
the deed has been registered on the certificate of title and a transfer certificate has been issued to the new owner
Validity of deeds of conveyance
- delivered and accepted
- competent grantor and legitimate grantee
- be in writing
- contain a legal description
- contain a granting clause
- include consideration
- be signed by the grantor
- be acknowledgeable
describe the details of the transfer
conveyance clauses
present the grantor’s assurances to the grantee
covenant clauses
covenants are defined in law and do not need to be fully stated in the deed
statutory deeds
“I own, but won’t defend”
bargain and sale deed
“I own and will defend”
general warranty deed
“I own and will defend against my acts only”
special warranty deed
“I may or may not own, and I won’t defend”
quitclaim deed
deed tailored to the requirements of specific parties, properties and purposes
special purpose deed
examples of special purpose deeds
personal representative’s deed, guardian’s deed, sheriff’s deed, deed of trust, deed in trust, master deed, partition deed, patent deed, tax deed
state law usually requires payment of a documentary stamp _ on a conveyance of real property
tax
include transfers within the immediate family or between government entities
exemptions
takes effect only after the testator’s death
last will and testament
amendatory
can be charged at any time during the maker’s lifetime
Types of wills
witnessed, holographic, approved, nuncupative
to be valid, wills must
- testator of legal age and mentally competent
- testator indicates that the will is the “last will and testament”
- signed
- completion of the will be witnessed and signed by the witnesses
- will be completed voluntarily, without duress or coercion
settles a dependent’s estate, whether they died testate or intestate
probate
having left a valid will
testate
not having left a valid will
intestate
someone who uses another’s property without the knowledge of the owner, or with the knowledge of an owner who fails to take any action over a statutory period of time
adverse possession
to claim legal title, the adverse possessor must:
- be able to show a claim of right or color title as reason for the possession
- have notorious possession
- maintain a consistent claim of hostile possession
- occupy the property continuously for a statutory period of time
- in some states, pay taxes
perfects a person from claiming an interest that is inconsistent with the person’s previous statements or actions
estoppel
contain history of every parcel of real estate in the county
title records
refers to the succession of property owners of record dating back to the original grant of title from the state to a private party
chain of title
To remove a clouded title, the owner may need to initiate what to clear the title record of any unrecorded claims
suit to quiet title
written, chronological summary of the property’s title records, and other public records affecting rights and interests in the property
abstract of title
each state prescribes procedures for recording in public title records: forms, proper execution, acknowledgement, and witnessing
recording system
title passes only when the conveyance has been duly registered on the title certificate itself - encumbrances likewise have no legal effect until they are recorded
Torrens System
to demonstrate marketable title to a buyer, seller must show that the title is free
title evidence
the seller must show that the title is free of
- doubts about the identity of the current owner
- defects
- claims that could affect value
- undisclosed or unacceptable encumbrances
What are the principal forms of evidence the owner can use to support title evidence?
Torrens certificate, title insurance policy, attorney’s opinion of the title abstract, title certificate
also acts as a deed of conveyance, title and encumbrances are recorded on the certificate
Torrens certificate
indemnifying the policy holder against losses from title defects; the insurer’s “guaranty”
title insurance policy
a written statement from an attorney stating an opinion of marketability based on examination of the title abstract
attorney’s opinion
statement of the condition of title as of the date of the certificate
title certificate
legal process by which a defaulting borrower loses their interest in the property used as collateral for a mortgage loan or deed of trust
foreclosure
what happens when a borrower loses a home to foreclosure?
any equity which existed is most likely lost, foreclosure becomes public record, borrower’s credit is damaged
what are the types of foreclosure?
judicial and non-judicial
allows the sale of the mortgaged property under the supervision of the court, with the proceeds going first to satisfy the mortgage, then other lien holders, and finally the borrower if any proceeds are left
judicial foreclosure
lacking the “power of sale” provision, the lender must file what suit and undertake a court proceeding to enforce the lien?
foreclosure suit
foreclosure suit asks the court to
- terminate the defendant’s interests in the property
- order the property sold publicly to the highest bidder
- order the proceeds applied to the debt
if a borrower has filed to meet the loan obligations, the lender can _ the loan
accelerate
gives public notice that the mortgaged property may soon have a judgement issued against it
lis pendens
only legal notice of a pending action that involves the title to, or possession of, a specific piece of real estate - can not be used in a suit to cover attorney fees or broker commissions
notice of pendency
right to reclaim a property that has been foreclosed by paying off amounts owed to credits
borrower’s right of redemption
right to redeem property between the time of the default and the foreclosure sale
equitable right of redemption
statutory periods of up to 1 year following the sale for the owner of a foreclosed property to redeem the estate
statutory right of redemption
authorize’s an official to seize and sell the foreclosed property
writ of execution
steps of a judicial sale
- all parties are notified in writing of the sale
- the sale is advertised in a newspaper with general circulation
- property is sold to the highest bidder
winning bidder receives a _, not a deed
certificate of sale
the person holding the certificate will receive a _ deed only after the sale has been confirmed
sheriff’s
Sale proceeds, in order of payment
- cost of the sale
- any special assessment taxes and general (or ad valorem) taxes
- first mortgage
- whatever is recorded next
enables the lender to attach and foreclose a judgement lien on other real or personal property the borrower owns
deficiency judgement
when there is a “power of sale” provisions in the mortgage or trust deed document - can force the sale of the liened property without a foreclosure suit
non-judicial foreclosure
if the borrower fails to cure the default or use other legal means to stop the sale, the lender may conduct
public auction
a court proceeding that gives the lender title directly instead of giving cash proceeds from a public sale
strict foreclosure
steps in a strict foreclosure
- lender must give appropriate notice to the delinquent borrower
- lender preps and records paperwork
- lender files suit in court
- court orders the borrower to pay the mortgage debt by a certain date
2 alternatives for foreclosure
deed in lieu of foreclosure and short sale
transfers legal title to the lienholder
deed in lieu of foreclosure
occurs when a lender allows a borrower in default on mortgage loan payments to sell the mortgaged property for less money than necessary to satisfy the loan in order to avoid the delay and expense of a foreclosure suit
short sale
what are the goals of land use control
- preservation of property value
- promotion of the highest and best use of property
- balance between individual property rights and public good
- control of growth to remain within infrastructure capabilities
- incorporation of community consensus into regulatory and planning activities
overall guideline for creating and enforcing zones, building codes and development requirements
master plan
what are the objectives of planning?
amount of growth, growth patterns, and accommodating demand
sets specific guidelines on how much growth the jurisdiction will allow - too much growth can overwhelm services and infrastructure
amount of growth
defines what type of growth will occur and where
growth patterns
make plans for accommodating expanding or contracting demand for services and infrastructure
accommodating demand
responsible for long term implementation of the master plan, creating rules that support policies and administering land use regulation on an everyday basis
planning departments
what is the planning commission responsible for?
approving site/subdivision plans and building permits and ruling on zoning issues
at the local level, county and city governments control land use through what authority?
police power - zoning
enacted by the local government to specify land usage for every parcel within jurisdiction
zoning ordinances
zoning that regulates density and values and aesthetics - some areas adopt buffer zones
residential zoning
zoning that regulates the location of office and retail land usage - density of usage
commercial zoning
zoning the regulates intensity of usage, type of industrial activity and environmental consequences
industrial zoning
zoning that restricts land use to farming, ranching, and other agricultural enterprises
agricultural zoning
zoning that restricts land use to public services and recreation
public zoning
zoning that restricts use to development of whole tracts that are designed to use space efficiently and max open space
planned unit development zoning
clearly differs from current zoning
nonconforming use
conflicts with ordinances that were in place before the use commenced
illegal nonconforming use
allows a use that differs from the applicable ordinance for a variety of justifiable reasons
zoning variance
grant authorizes a use that is not consistent with the zoning ordinance in a literal sense, yet is clearly beneficial or essential to the public welfare and does not materially impair other uses in the zone
special exception
property owner may petition the zoning board for an outright change in the zoning of a particular property
amendment
allow the county to protect the public against the hazards of unregulated construction
building codes
places limits on the use of the property
deed restriction
can terminate a private deed restriction
quitclaim deed
may restrict certain uses of a property - if the condition is violated, ownership reverts back to the grantor
deed condition
promises by those who purchase property in the subdivision to limit the use of their property in a way that is contrary to the recorded
restrictive covenants
states that if a property owner is lax in protecting their rights, the property owner may lose those rights
doctrine of laches
types of environmental controls
air quality, soil and water quality, other ambient and natural conditions
air quality significant threats
asbestos, carbon monoxide, formaldehyde, lead, mold, radon
soil and water quality - problems subject to controls
dioxins, lead and mercury, MTBE, PCB, USTs, wetlands
Other ambient and natural conditions
EMTs, noise, earthquake and flood hazards
for their own protection, licensees should
- be aware of potential hazards
- disclose known material facts
- distribute the HUD booklet
- know where to seek professional help
there are NO federal taxes on _ property
real
States may legally levy taxes on real property, but most delegate this power to
counties, cities, townships and local taxing districts
property taxes are based on the _ of the property
assessed value
county and local governments establish _ _ to collect funds for providing specific services
tax districts
determined according to state law, usually by a county or township assessor or appraiser
assessed value
how often are ad valorem taxes paid?
annually
value may be adjusted by multiplying by a uniform percentage for the municipality
level of assessment
what can a jurisdiction establish to level out the unevenness of valuations?
equalization factors
Real property tax exemption criteria:
- use to which the property is put
- owner’s ability to pay taxes
- desire of the state and local governments to encourage certain economic or social activities
how does a property owner generally qualify for a homestead exemption?
they are the head of a family or resides on the property to a required length of time
uncles commercial, industrial and utility properties and some vacant land
non-homestead class
other exemptions to real property taxes include
government owned properties and properties owned by non-profit organizations
total of the appraised of assessed values of all real property within the area’s boundaries, excluding partially or totally exempt properties
tax base
determines how much of a tax levy the tax base will receive
tax rate
derived every year, since budget requirements and revenue tallies are performed on an annual cycle
tax levy
tax levied against specific properties that will benefit for a public improvement - creates a specific lien against the property until it is paid
special assessment
lien against a property for the failure to pay property taxes - when property is transferred, this should be paid first
tax lien
one that is directed against a thing, rather than a person
in rem proceeding
buyer of a _ _ agrees to pay the taxes due
tax certificate
some type of auction usually conducted by the sheriff
tax sale
contract that is legally enforceable by virtue of meeting certain requirements of contract law
valid contract
enforceable within a statutory period
valid contract
some contracts are enforceable only if they are in writing
valid by unenforceable
does not meet the tests for validity, and therefore is no contract at all
void
subject to rescission by a party to the contract who is deemed to have acted under some kind of a disability
voidable
restricts the time period for which an injured party in a contract has the right to rescind or disaffirm the contract
statute of limitations
requires that certain contracts must be in writing to be enforceable, it concerns the enforceability of a contract - not its validity
statute of frauds
makes it illegal in many states to use electronic signatures in electronic transactions
uniform electronic transactions act
expresses the offeror’s intention into a contract with an offeree to perform the terms of the agreement in exchange for the offeree’s performance
offer
for an _ to be valid, the offeree must manifestly and unequivocally accept all terms of the offer without change and so indicate by signing the odder, preferably with a date of signing
acceptance
created by changing any terms of the offer
counteroffer
extinguishes the offer and the offeree’s right to accept it
revocation
contract in which all the terms and covenants of the agreement have been manifestly stated and agreed to by all parties
express contract
contract that is an unstated or unintentional agreement that may be deemed to exist when the actions of any of the parties suggest the existence of an agreement
implied contract
contract in which both parties promise to perform their respective parts of an agreement in exchange for performance by the other party
bilateral contract
contract in which only one party promises to do something, provided the other party does something
unilateral contract
contract that has been fully performed and fulfilled; neither party bears any further obligations
executed contract
contract in which performance is yet to be completed
executory contract
contract is one that unduly favors the party with superior bargaining power
unconscionable contract
contract is one dictated by the party who has the greater bargaining advantage
adhesion contract
contract in one whose effects are triggered by the occurrence of a change event
aleatory contract
failure to perform according to the terms of the agreement
breach of contract
when the ground at a building site is level, the developer can use what type of foundation?
slab on grade
first floor joists are completely covered with sub-flooring to form a platform upon which exterior walls and interior partitions are erected
platform frame construction
exterior wall studs continue through the 1st and 2nd stories
balloon frame construction
wider beams are spaced up to 8ft apart
post and beam construction
consists of a system of sills, girders, joists or floor trusses and sub-flooring that provides support for floor loads and gives lateral support to exterior walls
floor framing
wooden support member that is laid on top of and bolted to the foundation wall
sill plate
categories of insulation
loose fill, batts, blankets, rigid board, spray and reflective
most common type of heat pump
air-source
amount of heat energy needed to raise the temperature of 1 pound of water by 1 degree F
British thermal unit (BTU)
