1. 1 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin CHAPTER 18 REAL PROPERTY RIGHTS Real estate owners receive a bundle of rights, which includes physical and legal rights. Physical real property rights include: –the surface (e.g., improvements “on” and “to” the land), –the subsurface (e.g., mineral, oil, and gas rights), and –the air rights

2. 2 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Real Property and Personal Property Fixtures –intent test –annexation test –adaptation test –relationship-of-the-parties test Trade Fixtures

3. 3 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin REAL PROPERTY RIGHTS Three Fundamental Private Property Rights –the right of exclusive possession and control –the right of quiet enjoyment –the right of disposition

4. 4 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin ESTATES IN REAL PROPERTY The term estate refers to the interest a party holds in real property. Estates in Severalty and Concurrent Estates Freehold Estates and Non-Freehold Estates

5. 5 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin FREEHOLD ESTATES OF INHERITANCE Fee Simple Absolute Determinable Fee (i.e., possibility of a reverter) Fee Simple Subject to Condition Subsequent (i.e., right to reentry)

6. 6 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin FREEHOLD ESTATES NOT OF INHERITANCE Ordinary Life Estate (i.e., remainder interests) Legal Life Estate - Homestead Legal Life Estate - Dower and Curtesy

7. 7 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin NON FREEHOLD ESTATES Estate for Years –leasehold and leased fee estates Periodic Tenancy Tenancy at Will Tenancy at Sufferance

8. 8 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin CONCURRENT ESTATES Direct Co-ownership –joint tenancy –tenancy by the entirities –tenancy in common –community propery

9. 9 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin CONCURRENT ESTATES Direct Coownership –condominium ownership –cooperative ownership

10. 10 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin CONCURRENT ESTATES Indirect Coownership –tenancy in partnership (e.g., general and limited partnerships) –C-, S-, and limited liability corporations –real estate investment trusts (REITs)

11. 11 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin LIMITS ON PROPERTY RIGHTS Government Limitations –police power –taxation –eminent domain –escheat

12. 12 Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin LIMITS ON PROPERTY RIGHTS Private Restrictions –easements –restrictive covenants (i.e., deed restrictions) –liens