Prentice Hall © PowerPoint Slides to accompany The Legal Environment of Business and Online Commerce 5E, by Henry R. Cheeseman Chapter 28 Real Property and Land Use Regulation

Prentice Hall © What is Real Property? The land itself as well as buildings, trees, soil, minerals, timber, plants, and other things permanently affixed to the land

Prentice Hall © Forms of Real Property Land and buildings Land is the most common form – surface rights Buildings constructed on land are also considered real property. Subsurface rights Mineral rights beneath the land surface

Prentice Hall © Forms of Real Property Plant life and vegetation Growing plants are considered real property. Includes natural and cultivated plants Fixtures Goods that have been affixed to real property

Prentice Hall © Estates in Land Freehold estate – owner has a present possessory interest in real property Estates in fee Fee simple absolute Highest form of ownership Owner has right to exclusive possession and use. Fee simple defeasible Ownership may be taken away if a specified condition occurs or does not occur.

Prentice Hall © Estates in Land Life estate Interest in property lasts for the life of a specified person. Tenant has the right to possess and use the property during the term of the life estate.

Prentice Hall © Concurrent Ownership Joint tenancy Deceased tenant’s interest automatically passes to surviving co-tenants. Tenant may transfer his or her interest without consent of co-tenants. Tenancy in common Deceased tenant’s interest passes to his or her estate. Tenant may transfer his or her interest without the consent of co-tenants.

Prentice Hall © Concurrent Ownership Tenancy by the entirety Deceased tenant’s interest automatically passes to his or her spouse. Neither spouse may transfer his or her interest without the other spouse’s consent. Community property Surviving spouse automatically receives 1/2 of community property; other 1/2 passes to heirs. Neither spouse may transfer his or her interest without the other spouse’s consent.

Prentice Hall © Multiple-Dwelling Buildings Condominium Purchasers have title to individual units. Common areas are owned as tenants in common with other owners. Cooperative A corporation owns the multiple-dwelling building and residents own shares in the corporation.

Prentice Hall © Future Interests Future interest – the interest that the grantor retains for himself or herself or a third party Reversion Right to possession of real property returns to the grantor after the expiration of a limited or contingent estate. Remainder Right to possession of real property goes to a third person upon the expiration of a limited or contingent estate.

Prentice Hall © Transfer of Ownership of Real Property Sale or conveyance Deed describes ownership interest. Deed is delivered at closing or settlement. Recording statutes Deed or mortgage should be filed in county recorder’s office. Recording gives “constructive notice” of owners’ interest in the property.

Prentice Hall © Transfer of Ownership of Real Property Adverse possession A person who wrongfully possesses another person’s land may obtain title to the land. Requirements Possession for the statutory period of time Open, visible, notorious Actual and exclusive Continuous and peaceful Hostile and adverse

Prentice Hall © Nonpossessory Interests in Real Property An easement is an interest in land that gives the holder the right to limited use of another’s real property. Easement appurtenant Easement over a servient estate that benefits a dominant estate Easement in gross Easement that grants a person a right to use another’s land

Prentice Hall © Nonpossessory Interests in Real Property License Grants a person the right to enter upon another’s real property for specified event or time Profit Grants holder the right to remove something from another’s real property

Prentice Hall © Landlord-Tenant Relationship A relationship created when the owner of a freehold estate (landlord) transfers a right to exclusively and temporarily possess the owner’s property to another (tenant)

Prentice Hall © Types of Tenancies Tenancy for years Continues for the duration of the lease and then terminates automatically without notice Periodic tenancy Continues from payment interval to payment interval May be terminated by either party with adequate notice

Prentice Hall © Types of Tenancies Tenancy at will Continues at the will of the parties and may be terminated by either party at any time with adequate notice. Tenancy at sufferance Arises when a tenant wrongfully occupies real property after the expiration of another tenancy or life estate. Continues until the owner either evicts the tenant or holds him or her over for another term.

Prentice Hall © The Lease Rental agreement between landlord and tenant Statute of Frauds requires that leases for longer than one year be in writing.

Prentice Hall © Implied Warranty of Habitability Leased premises must be fit, safe, and suitable for ordinary residential use. If the warranty is breached, a tenant generally may: Withhold from his or her rent the amount by which the defect reduced the value of the lease Repair the defect and deduct the cost from rent Cancel the lease Sue for damages

Prentice Hall © Zoning Functions of zoning ordinances Establish use districts Restrict height, size and location of buildings on a site Establish aesthetic requirements for buildings Variance – permission to use property for different use than permitted under zoning Nonconforming use – continuing to use property in the way it was used before the zoning was changed, even though the use does not fit with the ordinance

Prentice Hall © Eminent Domain The right of the government to acquire private property for public use The Due Process Clause of the U.S. Constitution allows an owner to make a case for keeping the property. The Just Compensation Clause of the 5 th Amendment to the U.S. Constitution states that the government must compensate the property owner when it exercises its power of eminent domain.