Florida Real Estate Principles, Practices & Law 39th Edition Unit 8: Property Rights: Estates and Tenancies, Condominiums, Cooperatives, and Time-Sharing

Land, Real Estate, and Real Property Surface and everything attached to it by nature (earth’s center to infinity) Real estate Land and human-made improvements Real property Real estate plus the legal bundle of rights

Definition of Real Property, F.S. 475 Real property or real estate means any interest or estate in land and any interest in business enterprises or business opportunities Includes mineral rights Does not include cemetery lots nor the renting of a mobile home lot or recreational vehicle lot in a mobile home park or travel park

Physical Components of Land Surface rights include land and water rights Riparian rights Littoral rights Subsurface rights also referred to as mineral rights Air rights involve space above

Riparian vs. Littoral Rights Riparian rights associated with land abutting moving water Banks of a river or stream Littoral rights associated with land abutting tidal bodies of water Oceans and seas Ponds and lakes Water is not flowing

Definitions Associated with Water Rights Accretion Process of land buildup from water-borne rock, sand, and soil Alluvion New deposits resulting from accretion Erosion Loss in land due to natural forces Reliction Receding of water, uncovering additional land

Real vs. Personal Property Two basic types of property Real property (realty) Personal property (chattel) Personalty indicates personal property Real property becomes personal property by act of severance Personal property becomes real property by attachment

Fixtures Fixture—was personal property, now permanently attached to or made part of the real property Intent of the parties Relationship or agreement of the parties Method or degree of attachment Adaptation of the item

Basic Property Rights Disposition Enjoyment Exclusion Possession “C”ontrol

Estates and Tenancies The degree, quantity, nature, and extent of the interest (ownership rights) Two general groups Freehold – indefinite length (unknown) duration Leasehold – (nonfreehold) fixed (known) duration

Freehold Estates Ownership interest for an indefinite period (unknown duration) Two types Fee Simple – inherited Life Estate – measured by a person’s life span

Freehold Estate Fee simple Most comprehensive Absolute and complete ownership Can be inherited Also, fee or fee simple absolute Power to use, dispose, descend to heirs

Freehold Estate Life Estate - own property for the period of a lifetime (the owner’s or other designated person) Conventional life estate created by the person who holds title Legal life estates created by law; homesteaded property

Freehold Estate Life Estate Estate in reversion Remainder estate Property reverts to the original grantor Remainder estate Property goes to remainderman Vested (named) Contingent (name not specified)

Homestead Right to homestead permanent (principal) residence Protections and benefits Protection of the family (legal life estate) Protection of homestead from forced sale Tax exemption of up to $50,000 Size restriction of protected homestead is 160 acres outside city or .5 acre within city Personal property protection ($1,000 value)

Nonfreehold or Leasehold Estates Measured in calendar time (known duration) Not freehold because it does not exist for an indefinite period Nonfreehold or less-than-freehold Not an ownership interest Transfer of use and possession rights for a period of time

Leasehold Estates Estate for years (tenancy for years) Specific starting and ending date (designated period) Created by written lease agreement Establishes tenant interest in property but does not convey legal title

Leasehold Estates Tenancy at will Lease agreement with a beginning date but no fixed termination date Tenancy without specific term Notice to terminate set in statute Week to week: 7 days notice Month to month: 15 days notice

Leasehold Estates Tenancy at sufferance Tenant stays in possession of property beyond ending date and without landlord’s consent Tenant holds over If with written consent of landlord, then it becomes a tenancy at will

Sole and Concurrent Ownership In Severalty Property is held by one person Sole ownership “Severed” ownership Concurrent Ownership Concurrent ownership Two or more persons own property at the same time Three types Tenancy in common Joint tenancy Tenancy by the entireties

Tenancy in Common Two or more people Acquire title at same or different times Undivided interest (interest in whole property) Equal or unequal shares of ownership Heirs inherit (no right of survivorship)

Joint Tenancy Right of survivorship—share of a co-owner who has died goes to surviving co-owner(s), not to heirs Four unities Possession—undivided Interest—equal ownership interest Title—acquire title on same deed Time—acquire interests at same time Specific wording in the deed must provide for survivorship

Tenancy by the Entireties Husband and wife only Must be married to each other when they take title Four unities of a joint tenancy must exist Actions affecting property require consent of both spouses When one spouse dies, ownership interest transfers to surviving spouse by right of survivorship

Cooperatives (F.S. 719) Multi-family building owned by corporation Unit owners purchase shares of stock Stock ownership entitles purchaser to a proprietary lease and right to occupy Property taxes assessed on each unit Owners can deduct real estate taxes and mortgage interest Shareholders pay a pro rata share of property taxes and the corporation pays the tax bill

Cooperative Disclosures and Cancellation Disclosure in contract with developer Buyer has right to cancel within 15 calendar days of signing contract and receipt of cooperative documents Disclosure in resale contract, either Buyer has received documents at least 3 business days before signing, or Buyer has right to cancel within 3 business days of signing contract and receipt of cooperative documents

Condominiums (F.S. 718) Consists of condo units and common elements Own condo unit in fee simple plus an undivided fractional share of common elements Deed conveys ownership Common elements legally attached to each unit and transfer with unit Property taxes levied on individual units

Condominium Documents Declaration of condominium Condo is created by recording Articles of incorporation Bylaws of the association Operational requirements, rules and regulations FAQ Information regarding leasing units, assessments Estimated operating budget

Disclosures and Cancellation Period Developers File condo documents with Division of Florida Condominiums, Timeshares, and Mobile Homes 20+ units also file a prospectus Copy of prospectus and condo docs must be given to prospective purchasers Purchaser has 15 calendar days to cancel contract After signing contract and Receiving condo docs

Disclosures and Cancellation Period Resale purchase disclosures Declaration Articles of incorporation Bylaws Rules of association FAQs Most recent year-end financial information Governance form 3 business days to cancel contract After signing contract and receiving docs

Time-Sharing (F.S. 721) Units are divided into time segments of ownership, usually 52 weeks Deeds or other ownership evidences are prepared for each ownership segment Statutory disclosure—10 days to cancel

Listing Agreement Required Disclosure FREC requires written disclosure in listings, advertisements, and sale contracts: No guarantee of time share sale In addition, it is illegal to collect an advance fee for a time share listing

Time-Share Ownership Interval ownership—fee simple ownership Fractional interest transferred by deed Right-to-use Usage of time-share is limited to a certain number of years Ownership of time-share remains with developer