Chapter 7
Real Estate Property Rights,
Fixtures and Ownership
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Major Topics
 What is real property?
 Legal methods of Property
description
 Holding title to the real property
 Property owner rights
Surface, Water, Air
Duration of ownership
Fixtures
Subsurface
 Forms of ownership
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Real Property Includes More Than
Just Land
 Surface of Land
 Attachments to that surface
 Area beneath surface
 Rights in the air
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Water Rights
 Riparian System
 Doctrine of prior appropriation
 The state owns the land ownership
of land located beneath the river
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Fixtures
 Items that are attached to real
property and have become integral
part of the building’s function
 An item classified as fixture is
transferred as part of real property
 Determining whether an item is a
fixture or not:
Intent
Attachment
Uniqueness or adaptation to the
property
Ownership
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Subsurface Rights
 Mineral Rights
Oil and Gas
Air Rights
Right to Light
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Legal Description Necessary
for Transfer of Property
 Importance of legal descriptions
 Metes and Bounds System
 Rectangular Survey System
 Plat Maps and Survey
 G.P.S.
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Metes and Bounds
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Rectangular Survey System
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Plat Maps and Survey
Most common in major urban
areas, esp. residential
A survey is done to establish
the proposed land development
The general shape of the lot is
drawn on the plat map
The Plat map is typically
recorded in the local county
courthouse and a book and plat
number assigned
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Plat Map Illustrated
1
2
3
4
5
1
Casey Hambleton Lane
120.9’
8
9
175.8’
7
175.5’
6
10
120.6’
For Apple Orchid Plat #389 Book# 210 Page 17
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Geographic Positioning Systems
 Latitudes and Longitudes
 G.P.S. (Global Positioning System)
accuracy of 2 feet
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
The Freehold Estates
 Fee simple or Fee simple absolute
 Fee simple determinable
 Fee simple subject to a condition
subsequent
 Fee simple defensibles
 Life estate
Tax benefits
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Co-Ownership & Business Ownership
Tenants in common
Joint tenancy
Tenancy by the entirety
Community Property
Trust
Multi-Unit Ownership
 Condominiums and Landominiums
 Cooperative
 Townhouses or Landominiums
 Time Sharing
 Business (Investors):
 General Partnerships
 Limited Partnerships
 Corporations and S-Cooperations
 Limited Liability Corporations
 Real Estate Investment Trusts
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“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Tenancies in Common
‘Tenants in common’ hold title
together to same property
Each has an individual interest
in the property
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Joint Tenancies
Four unities of a joint tenancy:
Time, Title, Interest &
Possession
Joint tenants must own equal
shares
Joint tenants must have equal
right of possession
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Tenancy by the Entirety
 A joint tenancy with one additional
unity: Marriage
 A tenancy by the entirety with right
of survivorship between husband
and wife
 Not recognized by all states of U.S.
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Community Property
 A system of marital property ownership
(Spanish origin)
 Both spouses contribute equally to the
benefit of the property as “community
property”
Trust
 Three-party arrangement in which legal and
equitable title to property are separated
 Owner (trustor) transfers title to trustee
with the responsibility of administering the
property and distributing income to the
beneficiaries of the trust
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Condominiums
 A condominium owner holds a ‘fee
simple’ interest in the unit he/she
occupies
 Right to sell, lease, mortgage and
convey by will the condominium
interest
 When the development includes
separate fee simple ownership of
lots upon which the condominium
unit is placed and also shared
common areas, the it is referred as
“landominium”
Created by CCR
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Cooperatives
The dwellers of a multi-housing
own an undivided interest in
their unit through their
ownership of a corporation
(shares) that owns the entire
land and building
Cooperative affords existing
owners more control over the
transfer of the units
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Time-Sharing Properties
A time share interest in real
property for a limited duration at
a fixed time each year
(recreational lease)
Most commonly seen in resort
areas to allow the exclusive use
of the premises for vacational
purposes
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
General Partnerships
Partnership (UPA): “voluntary
association of two or more
persons as co-owners in a
business for profit”
Partnership (IRS): “a syndicate,
group, pool, joint venture, or
other unincorporated
association”
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Limited Partnerships
At least one partner has full and
complete liability and is known
as “general partner”
Liability of other “limited
partners” is limited to their
capital contribution to the
partnership
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Corporations
A corporation is a non-human
entity with permanent legal
existence and is owned by
individual investors
S Corporation
Internal Revenue Code permits
slight variation on the “double
taxation” by flowing its income
and losses through its
shareholders
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Limited Liability Companies (LLC)
A statutorily-created entity
offering limited liability of
corporation and flow-through
advantage of partnership
Pays no federal taxes on its
income. All income and losses
flow through owners
(members/shareholders)
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
REITs
Real Estate Investment Trust: A
statutory entity that permits
investors to hold diversified real
estate holdings by being
beneficiaries in a trust
REITs might be “public” or
“private”
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Non-Possessory Interests in Land
 Easements
 Profits
 License
 Security
 Liens
 Covenants and Deed Restrictions
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
Easements
“A right to another’s property”
 Easement appurtenant
 Easement in gross
 Express easement
 Implied easement (or Easement by
necessity)
 Easement by prescription
Easement across A
Water
Dominant
Tenement B
Servient
Tenement A
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner
road
END
“Real Estate Principles for the New Economy”: Norman G. Miller and David M. Geltner