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Property Rights Revisited

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)

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Property Rights Revisited

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  1. 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

  2. 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:

  3. Estates In Land • Titles and Ownership • Title - Right of ownership of the property • Deed – Written Document that conveys title to Real Estate

  4. Estates In Land Cont. Present Interest Future Interest Tenancies(manner of holding current estates) Fee simple absolute Absolute Inheritance or Gift With right of inheritance Determinable (automatic termination) Defeasible fee (restricted) Possible reversion to original grantor or heirs Freehold Estates (Ownership) Conditional (not automatic) Interest in Real Property Dower (Wife) Legal life estate Without right of inheritance Curtesy (husband) Homestead right Remainderman Conventional life estate Life tenancy Tenancy for life of another (pour autre vie) Non-Freehold Estates (lease or rental interests)

  5. Limitations on Property Rights • Encumbrance - Claim against the titleof 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

  6. 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

  7. 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

  8. Building Codes Why do they exist? To protect the safety of the public. Insurance Companies need them.

  9. Zoning • 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

  10. Forms of Ownership • Sole Ownership • Co-Ownership • Joint Tenancy • Tenancy in Common • Tenancy by the Entirety • Community Property • Corporation • Personal Trusts

  11. Home Ownership Considerations • Single Family Homes • Condominiums • Cooperatives • Hybrid/Duplex • Time-Share

  12. Trusts 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

  13. 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.

  14. REITS • 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

  15. Real Estate Contracts • Purchase of Sales Contract • Needs to be in writing • Commercial Contracts (usually done by attorney) • Legally Enforceable

  16. 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

  17. 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

  18. Requirements in Contract of Sale • Competent Parties • Offer to sell • Acceptance of Offer (or counter offer) • Consideration Exchange • Legal Objectives

  19. Types of Real Estate Contracts • Listing Contract • Contingency Sale Contract • Back up Contract • Purchase Option

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