1. © 2010 by Cengage Learning Chapter 3 ________________ Rights and Interests in Land

2. © 2010 by Cengage Learning Exclusive Right to Use of Land Feudal System Allodial System

3. © 2010 by Cengage Learning 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.”

4. © 2010 by Cengage 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.

5. © 2010 by Cengage Learning Government Limitations The right of government to regulate private property for the protection of the general public’s health, morals, and welfare. Police Power

6. © 2010 by Cengage Learning Government Limitations Eminent Domain The right of government to take private property for public use upon payment of just compensation.

7. © 2010 by Cengage Learning Government Limitations Taxation The right of government to tax private property Further discussion in Chapter 15.

8. © 2010 by Cengage Learning Government Limitations Escheat Ownership of property passes to the government if there is no will or no heirs.

9. © 2010 by Cengage Learning Removing Sticks from the Fee Simple Bundle Note that the fee simple bundle shrinks as an owner voluntarily removes rights from it.

10. © 2010 by Cengage 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

11. © 2010 by Cengage Learning Commonly Found Easements

12. © 2010 by Cengage Learning Commonly Found Encroachments

13. © 2010 by Cengage Learning Other Estates Qualified Fee Estates Life Estates Statutory Estates Freehold Estates Leasehold Estates

14. © 2010 by Cengage Learning Rights and Interests in Land

15. © 2010 by Cengage Learning Cross Section of Estates and Rights in Land

16. © 2010 by Cengage Learning Cross Section of Estates and Rights in Land (continued)

17. © 2010 by Cengage Learning Checkpoint In the absence of any other factors, which bundle of rights has a higher value?

18. © 2010 by Cengage Learning Key Terms Chattel Easement Eminent domain Encroachment Encumbrance Estate Fee simple Lien Title