Why Study Real Estate ?

Ownership and Rights
Property Rights Revisited
• Basic Legal Rights or Real Estate Ownership
• Right of Possession
• Right of Control
• Right of Quiet Enjoyment
• Right of Disposition
Water Rights
Land that borders water allows for:
• Riparian Rights (Rivers)
• Littoral Rights (Lakes)
Land can be gained or lost over a period of
time through:
Short Period
Long Period
 Accretion
 Avulsion
 Erosion
Estates In Land
Titles and Ownership
• Title - Right of ownership of the property
• Deed – Written Document that conveys title to
Real Estate
Estates In Land Cont.
Present Interest
Future Interest
Tenancies(manner of holding current estates)
Fee simple absolute
With right of
Freehold Estates
Defeasible fee
(automatic termination)
(not automatic)
Interest in
Real Property
Without right
life estate
Curtesy (husband)
Life tenancy
life estate
Tenancy for life of
Non-Freehold Estates
(lease or rental interests)
reversion to
original grantor
or heirs
Dower (Wife)
Homestead right
Inheritance or Gift
(pour autre vie)
Limitations on Property Rights
• Encumbrance - Claim against the title of the
property which prevents the passing of
full and complete title.
• Easement – The right to use another persons
property for a specific purpose.
• By Express Grant
• By Necessity
• By Reservation
• Implied Easement
• Easement by Prescription
• Adverse Possession
• Profit Easement
• License Easement
Limitations on Property Rights
Encroachments – Occur when a building or other
improvement illegally intrudes into the
property of another.
Lien – Charge or claim against a persons
property, made to enforce the payment
of money.
Does not prevent the transfer/sale of property.
• Mortgage Lien
• Mechanics Lien
• Judgment Lien
• Tax Lien
Govt. Limitations on Rights
Ownership of land is subject to other
interests. So that enjoyment of land does
not interfere with others.
Government Regulations
• Police Powers
• Eminent Domain
• Taxation
• Escheat
Building Codes
Why do they exist?
To protect the safety of
the public.
Insurance Companies need them.
Local Zoning tells us what purpose the land can be used
for, building and lot sizes, and appearance
• Categories of Zoning
• Residential
• Commercial
• Agricultural
• Zoning Boards Dictate the following
• Lot Size
• Square Feet
• Parking
• Set Backs from lot lines
Forms of Ownership
Sole Ownership
1. Joint Tenancy
2. Tenancy in Common
3. Tenancy by the Entirety
4. Community Property
Personal Trusts
Home Ownership
• Single Family Homes
• Condominiums
• Cooperatives
• Hybrid/Duplex
• Time-Share
Personal Trust – Title to real land and
personal property is transferred to a
trustee (bank) to be managed for the
benefit of some beneficiary
Grantor – Owns property puts it in trust
Trust Agreement – Actual Legal Document
Trustee – Manager of the trust
Types of Trusts
• Living
• Testamentary (After Death)
• Land
• Only name of Trustee appears
in public record
•Judgments against beneficiaries
cannot be attached to the trust.
Real Estate Investment Trusts
• Similar to a corporation
• Been around for 100 years
• Indirect Investment
• Diversify a portfolio
• 100 % Shareholders
• 90% of Profits must be returned as dividends
• Tax form K-1 no double taxation
Real Estate Contracts
• Purchase of Sales Contract
• Needs to be in writing
• Commercial Contracts (usually done by attorney)
• Legally Enforceable
Obligation of Seller
• Deliver clear title on specific date
• Maintain property until closing
• Make any agreed upon repairs
• Allow buyer to inspect property
• Reimburse buyers at closing for taxes
• Pay brokerage commission
Obligation of Buyer
• Pay price agreed to in contract
• Obtain mortgage financing
• Change utilities over to buyers name
• Reimburse seller for any pre-paid expenses
Requirements in
Contract of Sale
• Competent Parties
• Offer to sell
• Acceptance of Offer (or counter offer)
• Consideration Exchange
• Legal Objectives
Types of Real Estate
• Listing Contract
• Contingency Sale Contract
• Back up Contract
• Purchase Option