© OnCourse Learning Chapter 3 : Rights and Interests in Land

Exclusive Right to Use of Land Feudal System Allodial System © OnCourse Learning

Government Rights Property Tax The right of government to tax private property. © OnCourse Learning

Government Rights Eminent Domain The right of government to take private property for public use upon payment of just compensation. © OnCourse Learning

Government Rights The right of government to regulate private property for the protection of the general public’s health, morals, and welfare. Police Power © OnCourse Learning

Government Rights Escheat When a person dies and leaves no heirs and no instructions as to how to dispose of real and personal property. Ownership of property passes to the government © OnCourse Learning

 The largest, most complete bundle of rights one can hold in land; land ownership. © OnCourse Learning Fee Simple

The Fee Simple Bundle of Rights Real estate ownership is, in actuality, the ownership of rights to land. The largest bundle available for private ownership is called “fee simple.” © OnCourse Learning

Real Estate as a Bundle of Property Rights Property rights are what gives value to the real estate. Private property rights are subject to limitations imposed by government. Thus, this can limit the value of the investment. © OnCourse Learning

Removing Sticks from the Fee Simple Bundle Note that the fee simple bundle shrinks as an owner voluntarily removes rights. © OnCourse Learning

Control Mortgage Lease Impose covenants or conditions Grant easement Grant license Build or remove structures Use & Enjoy Occupy as residence Use as place of business Farm Mine/drill for oil, etc. Place of recreation Exclusion Maintain privacy Non-trespass Disposition Sell or refuse to sell Give Will Abandon Right or BenefitStick in Bundle Real Estate as a Bundle of Property Rights © OnCourse Learning

Commonly Found Easements © OnCourse Learning

Commonly Found Encroachments © OnCourse Learning

Other Estates Qualified Fee Estates Life Estates Statutory Estates Freehold Estates Leasehold Estates © OnCourse Learning

Rights and Interests in Land © OnCourse Learning

Cross Section of Estates and Rights in Land © OnCourse Learning

Cross Section of Estates and Rights in Land (continued) © OnCourse Learning

Checkpoint In the absence of any other factors, which bundle of rights has a higher value? © OnCourse Learning

Key Terms Chattel Easement Eminent domain Encroachment Encumbrance Estate Fee simple Lien Title © OnCourse Learning