Real Estate Principles, 11th Edition By Charles F. Floyd and Marcus T. Allen

Chapter 2 Property Rights and Legal Descriptions

Real Property vs. Personal Property Property Personal property (also called “chattel”) Real estate – Land and things attached to it Real property – Legal interests in real estate

Transferring Real Property Title – ownership of real estate Deed – Document used to transfer title to real property from grantor to grantee Lease – Agreement (usually a document) that transfers use and possession (but not title) from lessor to lessee

Fixture A personal property item that has become a part of the real property is called a fixture. Tests for fixture status include: – Intent of parties – Test of attachment – Test of adaptability “Trade Fixtures” are personal property, not real property!

Dividing Real Property Physically – Mineral rights – Air rights – Water rights Legally/conceptually – Estates in land

Mineral and Air Rights Mineral rights – The legal interests associated with oil, gas, coal, or other minerals located beneath the surface Air rights – The legal interests associated with the space above the surface

Water Rights The legal interests associated with water that flows across, touches, or is located in or under a parcel of land. – Littoral proprietors – Non-navigable bodies of water Riparian rights doctrine Prior appropriation doctrine

Underground Water Underground or subterranean stream – Water that flows in a defined channel Percolating water – Water in pockets not clearly located See Legal Highlight “Who Can Use the Shore?”

Estates in Land: Freehold Estates See Figure 2.1 Types of Estates in Land Freehold estates – Present interests Fee simple absolute estate Qualified fee estate Life estate – Future interests Reversion interest Remainder interest

Estates in Land: Leasehold Estates Leasehold estates – Tenancy for a stated period – Tenancy from period to period – Tenancy at will – Tenancy at sufferance Owner holds leased fee with a right of reentry

Concurrent Estates (real property jointly owned by more than one owner) Tenancy in common – Two or more owners hold undivided interests in the whole property Joint tenancy – Two or more owners hold equal undivided interests in the whole with right of survivorship

Concurrent Estates: Marital Property Tenancy by the entirety – Joint tenancy with right of survivorship between married persons Community property – Property brought to the marriage is separate property Property acquired during marriage is community property belonging equally to both parties

Other Forms of Joint Ownership Condominium – Condo owner holds title to unit, usually as fee simple absolute estate – All owners own common areas as tenants in common Cooperative – Co-op owner owns share of stock in a corporation that owns the real property – Share of stock gives co-op owner the right to a proprietary lease entitling owner to use and possession of a co-op unit

Timeshares Fee interests – Owner has fee simple absolute estate for the property for specified time during each year Right to use – Program participant has a leasehold estate for the property for a specified number of years during each year

Legal Descriptions Every parcel of real estate is unique so we need to be able to uniquely identify each parcel. Three methods of legal descriptions – Metes and bounds – Rectangular survey – Recorded plats

Metes and Bounds Start at a designated point of beginning and, through specific distances (metes) and directions (bounds), locate the boundary lines of the parcel. – Distances are measured in feet (to the nearest tenth or hundredth). – Directions are measured in degrees, minutes, and seconds. (Note that no angle is greater than 90 degrees.) – Property corners are marked by reference points.

Rectangular Survey Principal meridians are north-south lines Base lines are east-west lines Range lines are parallel to meridians and six miles apart Township lines are parallel to base lines and six miles apart

Rectangular Survey, cont. Townships are formed by range and township lines Townships are identified in a specific way Townships are six miles square with 36 one- square-mile sections Sections within townships are numbered in a specific way Sections are divided in a specific way

Combined Use of Metes and Bounds and Rectangular Survey Systems For a given parcel of land, the point of beginning might be described using the rectangular survey system, and then a metes and bounds description might follow.

Reference to Recorded Plats Many jurisdictions require developers to prepare accurate engineering drawings of their subdivision projects called plats. These plats are then recorded as legal documents that can be referred to as needed to identify individual parcels of land that are included in the plat. With a properly prepared and recorded plat, a legal description for a property can be as simple as “Lot 4 of Block G of Grassy River Estates.”