Real Estate Terms (Chapter 1) Flashcards
The earth’s surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects.
Land
Land, plus all things permanently attached to it naturally or artificially.
Real Estate
Real estate, plus the interests, benefits, and rights automatically included with real estate ownership.
Real Property
Everything that is not real property
Personal Property
Permanent, man-made attachments that include things such as fencing, buildings, and walkways
Improvements
Real Property Rights
Enjoyment - Right to (Legally) use the property however the owner desires
Disposition - sale
Possession - Right to occupy the property
Control - Right to determine how others may use the property
Exclusion - Right of no trespass
These are improvements to the infrastructure of the property (roads, underground water, wastewater, natural gas, or electric installations) which generally will always be an appreciating investment.
Permanence of investment
The geographic location of land is fixed; it can never be changed.
Immobility
While improvements may deteriorate over time, the land itself cannot be destroyed.
Indestructibility
One parcel (a piece of land) will not be exactly like another. This is the concept of non-homogeneity.
Uniqueness
More desirable areas which real estate increases in value at a quickened pace because of the location.
Area Preference
Use is defined as the legal and feasible use of a property that would return its highest value. Assuming the property is vacant and open.
Highest and Best Use
What are the four items we check when searching for highest and best use?
- Is it legally allowable (or permissible)
- legally nonconforming - permitted but are anomalous to the area zoning. If the original property is destroyed, or has degradation to the point of destruction then the zoning law might not be reinstatable.
- Physically Possible - Must be obtainable logically with the size and grade of the land including features like lakes and ponds. If it is a dumb idea like building in landslide area its not physically possible.
- Financially Feasible - If the value is worth the cost of construction, and the use is legally permissible and physically possible, a use will likely be financially feasible. You must also take the current market conditions into consideration when making this decision.
Most of the time when deciding what is the highest and best use most individuals will mostly rely on what is physically possible and financially feasible. Is it the most profitable use of the site?
What are the six ways of private land use controls?
- Deed restrictions
- Conditions, covenants, and restrictions (CC&Rs)—which apply to an entire subdivision
- Subdivision/homeowners association regulations (HOA)
- Liens: a legal claim against property that can be used as collateral to repay a debt.
- Easements - a “nonpossessory” property interest that allows the holder of the easement to have a right of way or use property that they do not own or possess. An easement doesn’t allow the easement holder to occupy the land or to exclude others from the land unless they interfere with the easement holder’s use. (Like a road to a house behind another house). Can not impede any owner to their property (either party)
- Illegal Restrictions - Most of the time these are discriminatory deed restrictions that were put in place long ago. They are not followed but remain because it’s difficult to get them removed.
What are the three levels of Public Land Use Control?
- Fed - The federal government enacts pollution control and hazardous waste management regulations that affect how private land can be used nationwide.
- State - control over some public properties, and also enacts environmental regulations specific to the state’s needs.
- Local - planning boards control lands and open spaces, planning and zoning, and subdivision development. They also control budgeting, site plan review, and building codes. Exercise of control tends to be local.
Controls are used by the government at the federal, state, or local level to do what it can to ensure the health, safety and welfare of its citizens. Including environmental regulations.
