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Quote of the Day
“It is a comfortable feeling to know
that you stand on your own ground.
Land is about the only thing that
can’t fly away.”
Anthony Trollope,
English author
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Nature of Real Property
 The grantor is the conveyor of property;
the grantee is the one receiving it.
 Real property includes:
• Land
• Buildings
• Subsurface Rights
• Air Rights
• Plant Life
• Fixtures --an object considered to be a
permanent part of the property.
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Estates in Real Property
 Rights in real estate usage and
ownership vary from unrestricted use
and right to sell, to a lesser right of
usage, but not the right to transfer it.
 The rights that someone can hold are
called estates, or interests.
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Business Law for a New Century
Freehold Estates
 The owner of a freehold estate has the
present right to possess the property
and to use it in any lawful way.
 A fee simple absolute provides the
owner with the greatest control.
 A fee simple defeasible may terminate
upon the occurrence of some event.
 A life estate is an estate for the life of
some named person.
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Non-Freehold Estates
 Is actually a lease, where the owner
permits someone to use and possess
the property.
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Business Law for a New Century
Concurrent Estates
 A concurrent estate is when two or
more own property at the same time.
• Tenancy in Common – two or more people
own the property, each with the right to
convey her interests or to pass it down to
her heirs.
• A joint tenancy includes the right of
survivorship
 All co-tenants have an absolute right to
partition (division of property).
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Types of Estates in Marriage
 Tenancy by the Entirety – form of
ownership in more than half the states.
• The husband and wife each own the entire
property, and they both have a right of
survivorship.
 Community Property – form of
ownership in nine states.
• Property brought to the marriage or given to
one spouse may remain individually owned,
called separate property.
• Income or assets earned during the
marriage is community property, which
must be equally shared.
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Condominiums and
Cooperatives
 In a condominium, the owner of the
apartment typically has a fee simple
absolute in his particular unit.
 In a cooperative, the residents generally
do not own their particular unit.
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Business Law for a New Century
Future Interests
 Interests that can be sold now, but do
not convey possession; this ability to
possess may or may not develop later.
• Reversion – the coveyor of a life estate in
property regains possession after the life
tenant dies.
• Remainder – a named, third person, gains
possession of a property after a life tenant
dies.
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Nonpossessory Interests
 An easement gives one person the right
to enter land belonging to another and
make a limited use of it, without taking
anything away.
• An easement can be created when the
landowner expressly grants it, when he
implies it (such as in granting permission to
access an area accessible only by crossing
your land), or by necessity (when there is
no other way to reach the property.)
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Easements, (cont’d)
 Easement by Prescription
• An easement by prescription happens
when someone makes use of someone
else’s property openly, without permission
and for the number of years determined by
local statute. If the owner does not stop the
unauthorized use, the user is granted an
easement by prescription.
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Business Law for a New Century
Nonpossessory Interests (cont'd)
 A profit gives one person the right to
enter land belonging to another and
take something away.
 A license given the holder temporary
permission to enter upon another’s
property.
 A mortgage is a security interest in real
property, given to the institution loaning
a buyer the money to buy the real
estate.
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Sale of Real Property
 Seller’s Obligation Concerning Property
• Most states now impose an implied
warranty of habitability on a builder who
sells a new home.
• The seller of a home must disclose facts
that a buyer does not know and cannot
readily observe, if they materially affect the
property’s value.
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Business Law for a New Century
Closing and Deeds
 A general warranty deed normally
contains the covenants of:
• Seisin –the seller owns the property
• Right to Convey – the seller has the right to
sell this property
• (No) Encumbrances – property is free of
easements, profits, mortgages, etc.
• Quiet Enjoyment – no other person can
lawfully claim the property
• Warranty – seller agrees to defend the
grantee if a third party makes a claim
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Adverse Possession
 To gain ownership of land by adverse
possession, the user must prove:
•
•
•
•
Entry and exclusive possession
Open and notorious possession
A claim adverse to the owner; and
Continuous possession for a statutory
period.
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Business Law for a New Century
Land Use Regulation
 Nuisance Law
• A nuisance is an unprivileged interference
with a the use and enjoyment of property.
 Zoning
• State laws that permit local communities to
regulate building and land use.
 Eminent Domain
• Eminent domain is the power of the
government to take private property for
public use.
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“Real property is ancient in
origin and terminology, but
every bit as potent as it was
1,000 years ago.”
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Business Law for a New Century
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Business Law for a New Century
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