McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 23 Personal Property, Real Property, and Land Use Law

23-2 Personal Property Personal property is tangible and moveable. In a business context, goods, vehicles, inventory, and equipment for business operations such as computers are all examples of personal property.

23-3 Leased Personal Property: UCC Article 2A Leases governed by both principles of property law and commercial law. Lease agreements are a form of personal property contract and are governed by state statutory laws that are modeled after Article 2A of the UCC.

23-4 Real Property: Ownership Rights (1) rights related to the use and enjoyment of the land; (2) subsurface rights; (3) water rights; and (4) airspace rights.

23-5 Real Property: Forms of Ownership Interests Four common ownership interests that are important to business owners: (1) fee simple; (2) life estate; (3) leasehold estate; and (4) easements.

23-6 LAWS GOVERNING LANDLORD-TENANT KEY POINT The law tends to offer more protection to residential tenants than to commercial tenants because a certain level of business and legal acumen is imputed to business owners and managers.

23-7 Tenant Remedies In the case of a violation of the tenant’s rights, the tenant may either: terminate the lease and sue the landlord for damages, or continue the lease and recover damages.

23-8 Landlord Rights and Remedies Landlord may keep any security deposit held by the landlord, and/or Evict (remove) the tenant from the premises.

23-9 Zoning Ordinances When a local government passes a zoning ordinance, it is exercising its police powers to advance legitimate objectives. The Supreme Court has recognized this power, but has also set limits on the government’s control of private property.

23-10 Environmental Regulation Statutes aimed at preservation of open land areas have been found to be a legitimate government regulation of private property. Courts have held that wetlands and coastlands preservation ordinances that restrict the owner’s right to develop, fill, or dredge the land are a legal use of the government’s police powers.

23-11 EMINENT DOMAIN The authority of the state and federal government to take private property is called the power of eminent domain. Derived from the Fifth Amendment that provides “[N]or shall private property be taken for public use without just compensation.”

23-12 learning outcomes checklist Distinguish between tangible property and intellectual property Define and give examples of personal property used in business Explain the concepts of title, bundle of rights, and ownership by possession.

23-13 learning outcomes checklist Identify the individual rights that landowners have in real property List and give examples of the three major forms of real estate ownership interests most commonly held by businesses and individuals.

23-14 learning outcomes checklist Articulate and give examples of the duties, rights, and remedies of landlords and tenants in an agreement to lease real property Identify the differences between legal protections for tenants in commercial leases versus residential leases.

23-15 learning outcomes checklist Distinguish between a sublease and an assignment and explain how each can be used in business planning objectives Give examples of two types of laws that regulate the use of real property by its owners Explain the government’s rights and limits when exercising eminent domain.