Unit 8: Property

The Nature of Real Property Real property is immovable and includes: -Land. -Buildings. -Trees and vegetation. -Airspace. -Subsurface (mineral) rights. -Fixtures.

Ownership Interests in Real Property Ownership interests are classified as either Possessory or Non-Possessory: -A Possessory interest such as a fee simple, life or leasehold estate, gives the owner a right to possess the land. -A Nonpossessory interest such as an easement, profit or license, does not give the owner a right to possess the land.

Fee Simple (Absolute) Although not absolute, the fee simple (sometimes called fee simple absolute) gives the owner the greatest aggregation of rights, powers and privileges possible under American law and can assigned to heirs. A “conveyance” (transfer of real estate) “from A to B” creates a fee simple. A is the Grantor and B is the Grantee.

Life Estates Estate that lasts for the life of some specified individual. “A grants Blackacre to B for B’s life” grants B a life estate in Blackacre. When B dies, Blackacre returns to A or his heirs or assigns, or a third party in the same condition, normal wear and tear excepted. Grantor A retains a “future interest” in the property. During B’s life, she can possess, use, and take the fruits of the estate, but not take from the property itself.

Leasehold Estates A real property owner or lessor agrees to convey the right to possess and use the property to a lessee for a certain period of time. Tenancy for Years: -Periodic Tenancy. -Tenancy at Will. -Tenancy at Sufferance.

Non-Possessory Interests An easement is a right of a person to make limited use of another person's real property without taking anything from the property. A profit is the right to go onto land in possession of another and take away some part of the land itself or some product of the land. Property that is benefited by easement/profit carries the interest with the sale of land.

NonPossessory Interests If the owner of the easement or profit is contiguous to the owner of the land, it is said to be appurtenant (‘easement appurtenant”). If the owner’s property is separated, it is said to be gross. AB Appurtenant A B In Gross

Non-Possessory Interests Easements or profits can be created by: -Deed (physical delivery is sufficient). -Will (at Grantor’s death). -Contract between Grantor and Grantee. -Implication: circumstances surrounding creation of easement imply its creation. -Necessity. -Prescription: easement by adverse possession.

Termination of an Easement or Profit By deed back to owner of the land burdened by it. Owner of easement or profit becomes owner of the land burdened with it. Abandonment by the owner of the right.

Licenses Revocable right of a person to come unto another’s land without removing anything from the land. Personal privilege that arises from the consent of the owner of the land that can be revoked.

Transfer of Ownership Ownership in real property can be transferred by: -A written Deed. -A Gift. -A Sale. -An Inheritance. -Adverse Possession. -Eminent Domain.

Deeds A Deed is the instrument setting forth the interests in real property being transferred. Necessary components of a Deed: -Names of Grantor and Grantee. -Words evidencing intent to convey. -Legally sufficient description of the land. -Grantor’s signature. -Delivery of the Deed.

Types of Deeds Warranty Deed. -Special Warranty Deed. Quitclaim Deed. Grant Deed. Sheriff’s Deed. -Period of redemption.

Transfer By Inheritance When the owner of real property dies, her property is transferred by either: -Will (testate). -Without Will (intestate). Title can be transferred at the time of death, as provided in state testate and intestate laws.

Transfer By Adverse Possession One person possesses the property of another for a certain statutory period of time, that person automatically acquires title to the land, just as if there had been a conveyance by deed. Must be: -Actual and exclusive. -Open, visible and notorious. -Continuous and peaceable. -Hostile and adverse.

Limits: Eminent Domain Rights in property are not absolute. They are constrained by federal and state laws, e.g., nuisance, tax and environmental. Transfer By Eminent Domain: The Fifth Amendment gives the government the right to “take” private land for public use with just compensation.

Limits: Zoning Zoning is the State’s power to control the use of land through legislation without having to compensate the owner (unless so severe that it is a “taking”). -Must be rational in advancing state interest and must be non- discriminatory. -Variances. -Building Permits.

Creation of the Landlord-Tenant Relationship Lease Agreement can be oral or written (oral may not be enforceable). Lease gives Tenant the temporary right to exclusively possess the property. Sources of Law: -Common Law. -State and Local Statutes, and -The Uniform Residential Landlord and Tenant Act (URLTA) which has been adopted by 1/4 of the states.

Creation of the Landlord-Tenant Relationship Form of the Lease: -Must express intent to establish the lease. -Provide for transfer of possession to the Tenant. -Provide for the Landlord’s “reversionary” interest. -Describe the property. -Indicate length of the term, amount of rent, when and where rent paid.

Implied Warranty of Habitability Applies to major (substantial) defects if Landlord knew or should have known about & he had a reasonable time to repair. To determine breach, Courts consider: -Whether Tenant caused damage. -How long defect existed and age of building. -Defects impact on Tenant’s safety and health. -Whether defect contravenes relevant statutes.

Habitability: Tenant’s Remedies If Landlord breaches the warranty of habitability, depending on state law, Tenant may: -Withhold rent -- put in escrow. -Repair and Deduct -- notify, repair, and deduct repair from rent. -Cancel the Lease -- must be constructive eviction or breach of habitability. -Sue for Damages -- difference between what paid for and what received.

Medicare and Medicaid Medicare and Medicaid are very different. Medicaid is a federal program for low-income, financially needy people, set up by the federal government and administered differently in each state.

Medicare Medicare was created to deal with the high medical costs that older citizens face relative to the rest of the population -- especially troublesome given their reduced earning power. However, eligibility for Medicare is not tied to individual need. Rather, it is an entitlement program; you are entitled to it because you or your spouse paid for it through Social Security taxes.

Medicare and Medicaid Although a client may qualify for and receive coverage from both Medicare and Medicaid, the client must meet separate eligibility requirements for each program; being eligible for one program does not necessarily mean he or she is eligible for the other.

Medicare Who is Eligible: Medicare covers almost everyone 65 or older, certain people on Social Security disability, and some people with permanent kidney failure. Who Administers the Program: Medicare is a federal program whose rules are the same all over the country. Medicare information is available at your Social Security office.

Medicaid Who is Eligible: Medicaid covers low-income and financially needy people, including those over 65 who are also on Medicare. Who Administers the Program: Medicaid is administered by the 50 states; rules differ in each state. Medicaid information is available at your local county social services, welfare, or department of human services office.

Quiz Prep What is a deed? How can you create a right to use a common driveway by neighbors? What is a covenant (in a deed)? What will an abstract of title not show? If you own a condo, what can you do and not do? What does the Fair Housing Act regulate? What is the warranty of habitability? What is zoning? What is foreclosure? What is fee simple?

Do you have any questions?