1. Real Estate Property Rights
Lecture 6
Real Estate Property Rights

2. “What is Real Estate?” Two major physical components
Land
Improvements and Fixtures
Bundle of Legal Rights

3. Common Ownership Rights
Legal Concept of Land
Land ownership contains “land rights.” Rights are referred to as the claim or the interest to which the land owner is justly entitled under law or custom.
Common Ownership Rights
Surface (on which improvements are constructed)
Rights to Light
Water Rights (Riparian System)
Improvements and Fixtures
Mineral or Subsurface (from the surface to the Earth’s Core)
Air (extends “to the sky” or “to the heavens”)

4. Water Rights
Riparian System
Doctrine of Prior Appropriation

5. Improvements and Fixtures
Improvements: Buildings, structures, fences, driveways, retaining walls, etc.
Improvements “to the land” – Changes to land (improvements to drainage, grading, filling, water/sewer, stormwater retention, gas lines, electric, etc.). Also referred to as “horizontal development”
Improvements “on the land” – Permanently erected man-made structures

6. Improvements and Fixtures
Fixtures: Personal property that is legally considered real estate because it is attached to land or an improvement, which is in itself attached to the land.
Factors Determining a Fixture: Method of attachment, intention of party making the attachment, purpose for which personal property is used.

7. Legal Concept of Land
Mineral: 20,000’ below surface, restricted by land size
Air: 1,500’ above surface, restricted by Federal Government for airline use

8. Mineral and Air Rights AIR RIGHTS SURFACE RIGHTS MINERAL RIGHTS 1,000’
20,000’

9. Transferring Real Property
Lecture 6
Transferring
Real Property

10. Deed
Legally conveys real estate interests from one party to another

12. Legal Descriptions Four Types
1. Lot and Block System (“plat map system”)
2. Metes and Bounds System
3. Government Rectangular System
4. Combination Legal Description (Metes & Bounds plus Government Rectangular System)

13. Legal Descriptions: Lot and Block System
Utilizes Publicly-Recorded Plats
Legal Descriptions include specific lots, blocks, and subdivisions

17. Legal Descriptions: Metes and Bounds System
Describes an Exterior Perimeter of a Property
Starts with a specified “Point of Beginning”, and ends as a specified “Closure” point

20. Legal Descriptions: Government Rectangular System
Utilizes baselines and principal meridians to identify tracts of land

22. Levels of Real Estate Interest
Lecture 6
Levels of Real Estate Interest

23. Rights of Real Estate Ownership
Real Estate Interests
Rights of Real Estate Ownership
Right to Use the Property
Right to Possess the Property
Right to Exclude others from the Property
Right to Dispose the Property

24. Freehold Estate (Lifetime Duration)
Real Estate Interests
Freehold Estate (Lifetime Duration)
Highest Form of Real Estate Ownership: Fee-Simple
-Owner has all four ownership rights

25. Less-Than-Freehold Estate
Real Estate Interests
Less-Than-Freehold Estate
Use, Possession, Exclusion (limited), NOT Disposition
Most commonly found in Landlord/Tenant relationships

26. Less-Than-Freehold Estate
Real Estate Interests
Less-Than-Freehold Estate
Leased-Fee Interest: LANDLORD
Leasehold Interest: TENANT

27. Four Categories of Less-Than-Freehold Estates
Real Estate Interests
Four Categories of Less-Than-Freehold Estates
Estate for Years: Continues for a definite period of time
Estate from Year to Year: Continued tenancy after “Estate for Years;” reestablished for a maximum term of one year
Tenancy at Will: Duration not specified; termination of lease agreed by either party (with notice) or death of either party
Tenancy by Sufferance: Tenant retains possession against owner’s wishes

28. Non-Possessory Interests in Land
Lecture 6
Non-Possessory Interests in Land

29. Non-Possessory Interests
Profits
Licenses
Security Interests
Liens
Primary vs. Mechanics Liens
Covenants and Deed Restrictions
Easements

30. Easements Two Types of Easements
“An easement is the right of one person to use the property of another for a specified purpose and under certain conditions that specify the extent of the allowable usage. The person holding the easement does not possess the property, nor does that person have the right to dispose the property.”
Two Types of Easements
1. “Runs with the land”
2. Does not “Run with the land”

35. Easements Easements which “Run with the Land”
(Can be passed from one owner to the next)
Easement Appurtenant: At least two parcels, where one at least one parcel benefits from the use of another parcel
Dominant Estate: Receives benefit from easement use
Servient Estate: Allows use of land to benefit dominant estate
Commercial Easement in Gross: A right-of-way over one piece of land
Railroads, pipelines, municipal utilities
Easements which do not “Run with the Land”
(Cannot be passed from one owner to the next)
Easement-in-gross: Involves only ONE parcel of real estate; cannot be sold

37. Easements Creation of Easements
1. Express Agreement: Contractual agreement
2. Necessity of Implication: Circumstances requiring legal efforts; as easement is required for land access