Unit 7: Interest in Real Estate

Question 1

Accretion

Answer 1

The amount of land an individual owns may be affected by the natural action of water

An owner is entitled to all land created through accretion–increases in the land resulting from the deposit of soil by the water’s action

Question 2

Appurtenant Easement

Answer 2

Attached to the ownership of one parcel and allows the owner the use of a neighbor’s land. For an appurtenant easement to exist, two adjacent parcels of land must be owned by two different parties

An appurtenant easement is part of the dominant tenement. If the dominant tenement is conveyed to another party, the beneficial easement transfers with the title, or “runs with the land”

Question 3

Avulsion

Answer 3

The sudden removal of soil by an act of nature. It is an event that causes the loss of land much less subtly than erosion

For example, a major earthquake or mudslide can cause an individual’s land holdings to become much smaller very quickly

Question 4

Condemnation

Answer 4

The process by which the government exercises the eminent domain right, by either judicial or administrative proceedings

It is the actual process of taking the property

Question 5

Conventional Life Estate

Answer 5

Created intentionally by the owner. It may be established either by deed at the time the ownership is transferred during the owner’s life or by a provision of the owner’s will after the owner’s death

Question 6

Deed Restrictions

Answer 6

Private agreements that affect land use

Once placed in the deed by a previous owner, they “run with the land,” limiting the use of the property and binding to all grantees

Deed restrictions are enforced by an owner of real estate and are included in the seller’s deed to the buyer

Covenants, conditions, and restrictions (CC&Rs) are private agreements that affect land use

Question 7

Doctrine of Prior Appropration

Answer 7

Whether for agricultural, recreational, or other purposes, waterfront real estate has always been desirable. Each state has strict laws that govern the ownership and use of water, as well as the adjacent land

Where water is scarce, a state may control all but limited domestic use of water according to the doctrine of prior appropriation

Question 8

Dominant Tenement

Answer 8

The dominant tenement is the dominating party benefitted by the easement

For an appurtenant easement to exist, two adjacent parcels of land must be owned by two different parties. The parcel over which the easement runs is called the servient tenement; the neighboring parcel that benefits is called the dominant tenement

Question 9

Easement

Answer 9

The right to use the land of another for a particular purpose. Easements are by agreement at any time or created by a seller when a property is conveyed

An easement is commonly created by a written agreement between parties that establishes the easement right. It may be created by the grantor in a deed of conveyance. in which the grantor either reserves an easement over the sold land or grants the new owner an easement over the grantor’s remaining land

Question 10

Easement by Condemnation

Answer 10

Acquired for a public purpose, through the right of eminent domain. The owner of the servient tenement must be compensated for any loss in property value

Question 11

Easement by Necessity

Answer 11

An easement that is created when an owner sells a parcel of land that has no access to a street or public way except over the seller’s remaining land is an easement by necessity

An easement by necessity is created by court order based on the principle that owners must have the right to enter and exit their land–the right of ingress (enter) and egress (exit); they cannot be landlocked

Question 12

Easement by Prescription

Answer 12

If the claimant has made use of another’s land for a certain period of time as defined by state law, an easement by prescription may be created

To create a prescriptive easement, the claimant’s use must have been continuous, exclusive, and without the owner’s approval (“adverse”)

The use must be visible, open, and notorious

NACHO: Notorious, Adverse, Continuous, Hostile, Open

Question 13

Easement in Gross

Answer 13

An individual or company interest in or right to use someone else’s land

For example, a railroad’s right-of-way, utility easements (such as for a pipeline or high-tension power line)

Question 14

Eminent Domain

Answer 14

The right of the government to acquire privately owned real estate for public use, private or economic development purposes

Question 15

Enroachment

Answer 15

Occurs when all or part of a structure (such as a building, fence, or driveway) illegally extends beyond the land of its owner

An enroachment usually is disclosed by either a physical inspection of the property or a spot survey

Question 16

Encumbrance

Answer 16

A claim, charge, or liability that attaches to real estate

A right or an interest held by someone other than the property owner that affects title to the real estate but does not necessarily prevent a transfer of title

May decrease the value or obstruct the use of the property

Encumbrances can be liens (usually monetary charges) and physical encumbrances (restrictions, easements, licenses, and enroachments)

Question 17

Equity in Eminent Domain Act

Answer 17

This law places the obligation on the government to prove that an area is blighted before forcing property owners to sell their property for private development projects

The act helps owners receive fair market value for their property, requires relocation costs for displaced residents and businesses, and pays attorneys’ fees when property owners successfully sue to keep their property

Question 18

Erosion

Answer 18

An owner may lose land through erosion–the gradual and imperceptible wearing away of the land by natural forces such as wind, rain, and flowing water

Question 19

Escheat

Answer 19

Process by which the state may acquire privately owned real or personal property. State laws provide for ownership to transfer, or escheat, to the state when an owner dies and leaves no heirs and also leaves no will or living trust instrument that directs how the real estate is to be distributed

Intended to prevent property from being ownerless or abandoned

In Illinois, real property will escheat to the county
In Illinois, personal property will escheat to the state

Question 20

Estate in Land

Answer 20

The degree, quantity, nature, and extent of an owner’s interest in real property. To be an estate in land, an interest must allow possession, meaning the holding and enjoyment of the property either now or in the future, and must be measured according to time

Estates in land have been classified primarily by their length of time of possession

Question 21

Fee Simple Absolute

Answer 21

The highest interest in real estate recognized by law. Fee simple ownership is absolute ownership; the holder is entitled to all rights to the property

Question 22

Fee Simple Defeasible

Answer 22

A qualified estate–it is subject to the occurrence or nonoccurrence of some specified event

Two categories of defeasible estates: (1) those subject to a condition subsequent or (2) a fee simple determinable (qualified by a special limitation).

These qualified, defeasible estates are created using specific language in the deed. A “condition subsequent” is only created by using the words “on the condition that.”

Question 23

Fee Simple Determinable

Answer 23

It is a fee simple defeasible estate that may be inherited. This estate is qualified by a special limitation (which is an occurrence or event)

The language used to distinguish a special limitation–words such as “so long as”, “while”, or “during” is the key to creating this special limitation

Question 24

Freehold Estate

Answer 24

Last for an indeterminate length of time, such as for a lifetime or forever. They include fee simple, defeasible fee, and life estates.

The first two of these estates continue for an indefinite period and may be passed along to the owner’s heirs

Question 25

Future Interest

Answer 25

The right of reentry and possibility of reverter may never take effect. If they do, it will be only at some time in the future. Therefore, each of these rights is considered a future interest

Question 26

Homestead

Answer 26

Illinois has homestead, a legal life estate in real estate occupied as the family home. In effect, the home is protected from unsecured creditors during the occupant’s lifetime

Every homeowner in Illinois is entitled to a homestead exemption up to value of $15,000 per head of household, and $30,000 for two heads of household (maximum amount)

Question 27

Leasehold Estate

Answer 27

Lasts for a fixed period of time. They include estates for years and estates from period to period

The traditional freehold and leasehold estates found in most states are also recognized under Illinois law

Question 28

License

Answer 28

A personal privilege (not a right) to enter the land of another for a specific purpose

A license differs from an easement in that it can be terminated or canceled by the licensor (the person who granted the license) at any time

If the use of another’s property is given orally or informally, it generally is considered to be a license rather than a personal easement

Question 29

Lien

Answer 29

A charge against property that provides security for a debt or an obligation of the property owner

Real estate taxes, mortgages, and trust deeds, judgements, and mechanics’ liens all represent possible liens against an owner’s real estate

Question 30

Life Estate

Answer 30

A freehold estate limited in duration to the life of the owner or the life of some other designated person or persons

Unlike other freehold estates, a life estate is NOT inheritable

It passes to future owners according to the prearranged provisions of the life estate

Two of the life estates, conventional and pur autre vie, are created through grant or conveyance to another. The third, a legal life estate, is created by statute or law

All three avoid the probate process

Question 31

Life Tenant

Answer 31

Entitled to the rights and benefits of ownership from both possession and ordinary use and profits just as if the individual held a fee simple interest

The life tenant’s ownership may be sold, mortgaged, or leased, but it is always subject to the limitation of the life estate, and under those conditions, the life estate must always be disclosed

A life tenant’s ownership rights are NOT absolute. The life tenant may not injure the property, such as destroying a building or allowing it to deteriorate

Question 32

Littoral Rights

Answer 32

Owners whose land borders commercially navigable lakes, seas, and oceans

Owners with littorial rights enjoy unrestricted use of available waters but own the land adjacent to the water only up to the mean high-water mark

Question 33

Party Wall

Answer 33

An exterior wall of a building that straddles the boundary line between two lots, or it can be a commonly shared partition wall between two connected properties

A written party wall agreement must be used to create the easement rights

Question 34

Police Power

Answer 34

Every state has the power to enact legislation to preserve order, protect the public health and safety, and promote the general welfare of its citizens. That authority is called a state’s police power

Question 35

Pur Autre Vie

Answer 35

A life estate also may be based on the lifetime of a person other than the life tenant. This is called a life estate pur autre vie (“for the life of another”)

Although a life estate is not considered an estate of inheritance, a life estate pur autre vie provides for the life tenant’s “ownership” only until the death of the person against whose life the estate is measured

Question 36

Quick-Take

Answer 36

In certain situations, Illinois law permits a summary proceeding in which a plaintiff/condemnor may obtain immediate fee simple title to real property, including the rights of possession and use. Such a proceeding in Illinois is called a quick-take

In a quick-take, the plaintiff must deposit a sum with the county treasurer that is preliminarily considered by the court to be just compensation; this can be litigated later

Question 37

Reliction

Answer 37

If a property’s boundary extends to the “water’s edge” and the water recedes, the new land is acquired by reliction

Question 38

Remainder Interest

Answer 38

The fee simple owner who creates a conventional life estate must plan for future ownership. When the life estate ends, it is replaced by a fee simple estate. The future owner of the fee simple estate may be designed in one of two ways:

In remainder interest, the creator of the life estate may name a remainderman as the person to whom the property will pass when the life estate ends

Grantor passes title to life tenant, then the tenant passes title to the remainderman

Question 39

Reversionary Interest

Answer 39

The fee simple owner who creates a conventional life estate must plan for future ownership. When the life estate ends, it is replaced by a fee simple estate. The future owner of the fee simple estate may be designed in one of two ways:

In reversionary interest, the creator of the life estate may choose not to name a remainderman. In that case, the creator will recapture ownership when the life estate ends. The ownership is said to “revert to the original owner”

Grantor passes title to life tenant, then the title goes back to the grantor

Question 40

Riparian Rights

Answer 40

Common-law rights granted to owners of land along the course of a river, stream or similar body of flowing water and generally include the unrestricted right to use the water

Question 41

Servient Tenement

Answer 41

The servient tenement is the land that serves the other party

For an appurtenant easement to exist, two adjacent parcels of land must be owned by two different parties. The parcel over which the easement runs is called the servient tenement; the neighboring parcel that benefits is called the dominant tenement

Question 42

Tacking

Answer 42

The concept of tacking provides that successive periods of continous occupation by different parties may be combined (or tacked) to reach the required total number of years necessary to establish a claim for a prescriptive easement

To tack on one person’s possession to that of another, the parties must have been “successors in interest,” such as an ancestor and his heir, a landord and tenant, or a seller and buyer

Question 43

Taxation

Answer 43

A charge on real estate to raise funds to meet the public needs of a government

Taxes on real estate include annual real estate taxes assessed by local governmental entities, including school districts; taxes on income realized by individuals and corporations on the sale of property; and special fees that may be levied for special projects

Question 44

Uniform Probate Code

Answer 44

Most separate or marital property states, including Illinois, have abolished the common-law concepts of dower and curtesy in favor of the Uniform Probate Code. This gives the surviving spouse the right to take an elective share on the death of the other spouse

Question 45

Waste

Answer 45

A life tenant’s ownership rights are NOT absolute. The life tenant may not injure the property, such as destroying a building or allowing it to deteriorate

In legal terms, such injury is called waste. Those who eventually will own the property could seek an injunction against the life tenant or sue for damages if waste occurs