1. CHAPTER 16
Real Property

2. Introduction
In tort and product liability cases, defendant’s insurance coverage is often an important factor in how litigation proceeds
Property owners also depend on insurance to protect themselves from liability
Mortgage companies and banks that make loans to finance property purchases require that insurance be carried

3. Real Property The Law Has Divided Property into Two Classifications
Land and all things attached to the land
Real estate
Personal Property
All other property
Tangible
Intangible
Learning Objective: The difference between real property and personal property.

4. Real Property Ownership Rights in Property
Often viewed as a “bundle of rights”
Fee simple absolute
Ownership rights to the greatest degree
Upon the owner’s death, interests in property descend to owner’s heirs
Learning Objective: How one acquires, holds, and transfers ownership rights in property and what procedures are involved in the sale of real estate.

5. Real Property Ownership Rights in Property
Government restrictions on property
May be subject to restrictions
Zoning laws
Eminent domain
Easements
Right of another to use the owner’s land
Limited purpose

6. Real Property Ownership Rights in Property Concurrent ownership
Owners who share the bundle of ownership rights
Tenancy in common
If tenant in common dies, tenant’s ownership rights pass to heirs
Joint tenancy
If joint tenant dies, tenant’s interest passes to surviving joint tenant
Other tenancies
Tenancy by the entirety
Community property

7. Real Property Ownership Rights in Property Life estates
An interest in real property
Transferred to another for life of that individual
Future interests
Fee simple owner conveys property to another conditionally or for a limited time
Original owner still retains interest

8. Real Property The Transfer and Sale of Real Property
Ownership can be transferred in numerous ways
Gift
Inheritance
Lease
Sale
Sale of tangible personal property
Covered by common law of contracts

9. Real Property The Transfer and Sale of Real Property
Contract formation—offer and acceptance
Earnest money
Responding to an offer
The role of the escrow agent
Financing
Mortgage
Inspection of the premises

10. Real Property The Transfer and Sale of Real Property
Title examination and insurance
Checking records carefully to be certain the seller is actually the owner of the property
The closing
Deeds
Closing costs

11. Real Property

12. Real Property
Leases
Contractual agreement under which owner (lessor) agrees to rent property to another (lessee)
Specific period of time
Leases of real estate governed by
Common law of contracts
State statutory law

13. Real Property
Leases
Paralegals frequently draft or review lease agreements
Should be familiar with typical terms of a lease

14. Real Property Commercial Leases
Usually more detailed than residential leases
Special expertise is needed
Terminology follows industry practices
Building Owners and Managers Association International
Gross leasable
Net leasable square footage
Specific discussion of common areas and responsibilities, inspection rights, etc.

15. Real Property Property Law and the Paralegal
Work requires understanding of law governing real property
Handling real estate transactions
Contact with buyers, sellers, and real estate agents
Work with title companies and banking institutions

16. Real Property
Protecting the Real Estate Purchaser: The Legal Due-Diligence Team
The legal due-diligence team
Title due diligence
Survey due diligence
Government regulation due diligence
Lease review
The legal due-diligence team provides value

17. Summary
An insurable interest exists whenever an individual or entity benefits from the preservation of the property to be insured or the continued health or life of the person to be insured
The general principles of contract law are applied to the insurance contract
The insurance industry is also regulated by the states

18. Summary
Defenses against payment to an insured include fraud, lack of an insurable interest, and improper actions on the part of the insured
Some parties prefer to self-insure against risk of loss by setting aside funds for such possibilities
Captive insurance is sometimes employed by large companies that form their own insurance company to handle insurance needs