Test 1: Rights; Interests and Estates; Ownership

Wells, driveways, and signs on a parcel of land.

The legal concept of real estate encompasses land and all man-made structures that are “permanently” attached to the land. The phrase “permanently attached” refers primarily to one’s intention in attaching the item. Obviously, very few if any man-made structures can be permanently attached to the land in the literal sense. But if a person constructs a house with the intention of creating a permanent dwelling, the house is considered real estate. By contrast, if a camper affixes a tent to the land with the intention of moving it to another camp in a week, the tent would not be considered real estate.

A chicken coop permanently attached to land.

Improvements to real estate include such things as fences, streets, buildings, wells, sewers, sidewalks and piers. Modifications to land or a developer’s preparations of a parcel of land can include such activities as grading or clearing, neither of which are considered to be ‘improvements’ in this sense of the word

The center of the earth and infinite space above the earth.

The legal concept of land encompasses the surface area of the earth; everything beneath the surface of the earth extending downward to its center; all natural things permanently attached to the earth; and the air above the surface of the earth extending outward to infinity. Land, therefore, includes minerals beneath the earth’s surface, water on or below the earth’s surface, and the air above the surface.

enjoyed by the owner of a property.

This group of rights includes the right to Possess, Use, Transfer, Encumber, and Exclude others from using the property. (Remember: ‘PUTEE’) Transfer rights include the right to sell, rent, donate, assign, or bequeath. The owner may also encumber the item by mortgaging it as collateral for debt.

Any item of property that is not definable as real property.

Personal property is any owned item which is not real estate, and the rights associated with owning the personal property item. Items of personal property are also called chattels or personalty.

pledge the property as collateral for debt..

The right to encumber the property essentially means the right to mortgage the property as collateral for debt. There may be restrictions to this right, such as a spouse’s right to limit the degree to which a homestead may be mortgaged.

transfer of a portion of the bundle of rights.

An ordinary lease is a common example of the transfer of a portion of one’s bundle of rights. The owner relinquishes the right to possess portions of the surface, perhaps a building, in return for rent. The tenant enjoys the rights to possess and use the building over the term of the lease, after which these rights revert to the landlord. During the lease term, the tenant has no rights to the property’s subsurface or airspace other than what the building occupies. Further, the tenant does not enjoy any of the other rights in the bundle of rights: he or she cannot encumber the property or transfer it. To a limited degree, the tenant may exclude persons other than the legal owner from the property.

Yes. The drones infringe on his air rights.

Air rights apply to the space above the surface boundaries of the parcel, as delineated by imaginary vertical lines extended to infinity. Since the advent of aviation, property owners’ air rights have been curtailed to allow aircraft to fly over one’s property provided the overflights do not interfere with the owner’s use and enjoyment of the property. The issue of violation of air rights for the benefit of air transportation is an ongoing battle between aircraft owners, airlines, airports, and nearby property owners.

Navigable lakes, seas, and oceans.

Littoral rights concern properties abutting bodies of water that are not moving, such as lakes and seas. Owners of properties abutting a navigable, non-moving body of water enjoy the littoral right of use, but do not own the water nor the land beneath the water. The legal premise underlying the definition of littoral rights is that a lake or sea is a navigable body of water, therefore, public property owned by the state. By contrast, a body of water entirely contained within the boundaries of an owner’s property is not navigable. In such a case, the owner would own the water as well as unrestricted rights of usage.

the high water mark of the body of water at the shoreline.

Ownership extends to the high-water mark of the body of water. The low water mark would imply that the owner owned the water itself at times of high water levels!

They transfer with the property when the property is sold.

Littoral rights attach to the property. When the property is sold, the littoral rights transfer with the property to the new owner.

Streams and rivers.

Riparian rights concern properties abutting moving water such as streams and rivers. If a property abuts a stream or river, the owner’s riparian rights are determined by whether the water is navigable or not navigable. If the property abuts a non-navigable stream, the owner enjoys unrestricted use of the water and owns the land beneath the stream to the stream’s midpoint. If the waterway in question is navigable, the waterway is considered to be a public easement. In such a case, the owner’s property extends t the water’s edge as opposed to the midpoint of the waterway.

An item of personal property that has been converted to real property.

A personal property item that has been converted to real property by attachment to real estate is called a fixture. Typical examples are chandeliers, toilets, water pumps, septic tanks, and window shutters. The owner of real property inherently owns all fixtures belonging to the real property. When the owner sells the real property, the buyer acquires rights to all fixtures.

the owner originally intended to remove it after a period of time.

One’s original intention can override the test of movability in determining whether an item is a fixture or not. If someone attached an item to real property, yet intended to remove it after a period of time, the article may be deemed personal property. If a person intended an article to be a fixture, even though the item is easily removable, the article may be deemed a fixture. For example, an apartment renter installs an alarm system, fully intending to remove the system upon lease expiration. Here, the alarm system would be considered personal property

Fifty percent of the estate consisting of the indivisible whole of the real property.

An undivided interest is an owner’s fractional interest in an entire (undivided) estate, but not in a physical portion of the real property itself. An owner who has an undivided equal interest with another cannot exercise exclusive rights over a portion of the real estate, which is an indivisible whole.

an estate in land.

Interests are principally distinguished by whether they include possession. If the interest-holder enjoys the right of possession, the party is considered to have an estate in land, or, familiarly an estate. Freehold and leasehold estates in land are further distinguished by whether the duration of the owner’s rights can be determined.

a public interest.

Public entities may own or lease real estate, in which case they enjoy an estate in land. However, government entities also have non-possessory interests in real estate which act to control land use for the public good within the entity’s jurisdiction. The prime example of public interest is police power, or the right of the local or county government to zone. Another example of public interest is the right to acquire ownership through the power of eminent domain.

a freehold estate.

In a freehold estate, the duration of the owner’s rights cannot be determined: the rights may endure for a lifetime, for less than a lifetime, or for generations beyond the owner’s lifetime. By contrast, leasehold estates have expirations.

that the estate is limited by a lease term.

A leasehold estate is distinguished by its specific duration, as represented by the lease term. Further, leasehold tenants only enjoy limited property rights: use; temporary possession, and limited exclusion.

Fee simple defeasible.

The defeasible fee estate is perpetual, provided the usage conforms to stated conditions. Essential characteristics are that the property must be used for a certain purpose or under certain conditions, and, if the use changes or if prohibited conditions are present, the estate reverts to the previous grantor of the estate.

An ordinary life estate.

A life estate is limited in duration to the life of the owner or other named person. Upon the death of the owner (ordinary life estate) or other named individual (pur autre vie life estate), the estate passes to the original owner (a reversionary interest) or another named party (a remainder interest). Thus with the life estate, the owner enjoys full ownership rights during the estate period, and holders of the future interest own either a reversionary or a remainder interest.

a legal life estate.

Homestead, dower, and curtesy are legal life estates. A legal life estate is created by state law as opposed to being created by a property owner’s agreement. The focus of a legal life estate is defining and protecting the property rights of surviving family members upon the death of the husband or wife.

The boat, house, and motorcycle.

Separate property consists of: property owned by either spouse at the time of the marriage; property acquired by either spouse through inheritance or gift during the marriage; property acquired with separate-property funds; and income from separate property. Community property consists of all other property earned or acquired by either party during the marriage. A spouse owns separate property free and clear of claims by the other spouse. He or she can transfer it without the other spouse’s signature. Upon the death of the separate property owner, the property passes to heirs by will or laws of descent. Community property cannot be transferred or encumbered without the signatures of both spouses. Upon the death of either spouse, half of the deceased’s community property passes to the surviving spouse, and the other half passes to the decedent’s heirs.

The right to possess and use the premises.

Leasehold tenants are entitled to possess and use the leased premises during the lease term in the manner prescribed in the lease. They also have restricted rights to exclusion.

the tenant makes, and landlord accepts, regular rent payments.

In an estate from period-to-period, also called a periodic tenancy, the tenancy period automatically renews as long as the tenant pays rent in a timely manner and the landlord accepts it. At the end of a tenancy period, if the landlord accepts another regular payment of rent, the leasehold is considered to be renewed for another period. A conveyance of leased property does not cancel a leasehold interest.

terminates on the death of lessor or lessee.

The estate at will, also called a tenancy at will, has no definite expiration date and hence no ‘renewal’ cycle. The landlord and tenant agree that the tenancy will have no specified termination date, provided rent is paid on time and other lease conditions are met. For example, a son leases a house to his father and mother ‘forever,’ or until they want to move. The estate at will is terminated by proper notice, or by the death of either party.

an estate at sufferance.

In an estate at sufferance, a tenant occupies the premises without consent of the landlord or other legal agreement with the landlord. Usually such an estate involves a tenant who fails to vacate at the expiration of the lease, continuing occupancy without any right to do so. For example, a tenant violates the provisions of a lease and is evicted. The tenant protests and refuses to leave despite the eviction order.

Estate from period to period.

In an estate from period-to-period, also called a periodic tenancy, the tenancy period automatically renews for an indefinite period of time, subject to timely payment of rent. At the end of a tenancy period, if the landlord accepts another regular payment of rent, the leasehold is considered to be renewed for another period.

tenancy in severalty.

If a single party owns the fee or life estate, the ownership is a tenancy in severalty. Synonyms are sole ownership, ownership in severalty, and estate in severalty.

tenancy in common.

The tenancy in common, also known as the estate in common, is the most common form of co-ownership when the owners are not married (though tenants in common can be married). The defining characteristics are: two or more owners; identical rights; interests individually owned; electable ownership shares; no survivorship; and no unity of time. With ‘identical rights’, co-tenants share an indivisible interest in the estate, i.e., all have equal rights to possess and use the property subject to the rights of the other co-tenants.

Parties must acquire respective interests at the same time.

To create a joint tenancy, all owners must acquire the property at the same time, use the same deed, acquire equal interests, and share in equal rights of possession. These are referred to as the four unities.

cannot will their interest to a party outside the tenancy.

The survivorship feature of joint tenancy presents an advantage to tenancy in common, in that interests pass without probate proceedings. On the other hand, joint tenants relinquish any ability to will their interest to parties outside of the tenancy.

Legal life estate.

A legal life estate is created by state law as opposed to being created by a property owner’s agreement. The focus of a legal life estate is defining and protecting the property rights of surviving family members upon the death of the husband or wife.

A homestead interest cannot be conveyed by one spouse.

A homestead is one’s principal residence. Homestead laws protect family members against losing their homes to general creditors attempting to collect on debts. Homestead laws generally provide that: the homestead interest cannot be conveyed by one spouse; both spouses must sign the deed conveying homestead property.

sell or transfer his interest without the consent of the other tenants in common.

All tenants in common have distinct and separable ownership of their respective interests. Co-tenants may sell, encumber, or transfer their interests without obstruction or consent from the other owners. A co-tenant may not, however, encumber the entire property.

Income derived from community property

If an income-producing property has been defined as community property, the revenue accruing from the investment is likewise community property.

The beneficiary

A land trust allows the trustor to convey the fee estate to the trustee and to name himself or herself the beneficiary. The land trust applies only to real property, not to personal property. The agreement, or deed in trust, grants the beneficiary the rights to possess and use the property, and to exercise control over the actions of the trustee.

The Buick and the second property

Community property laws define property rights of legal spouses before, during, and after their marriage, as well as after the death of either spouse. Community property law distinguishes real and personal property into categories of separate and community property. Separate property belongs to one spouse; community property belongs to both spouses equally. Separate property is that property which is acquired prior to the marriage, by gift or inheritance during the marriage, property acquired by separate-property funds, or income from separate property.

A cooperative may hold an owner liable for the unpaid operating expenses of other tenants.

Since the corporation owns an undivided interest in the cooperative property, debts and financial obligations apply to the property as a whole, not to individual units as in a condominium.

The owners enjoy an indivisible interest.

The tenancy in common, also known as the estate in common, is the most common form of co-ownership when the owners are not married (though tenants in common can be married). The defining characteristics are: two or more owners; identical rights; interests individually owned; electable ownership shares; no survivorship; and no unity of time. With ‘identical rights,’ co-tenants share an indivisible interest in the estate, i.e., all have equal rights to possess and use the property subject to the rights of the other co-tenants.

sell her interest to a third party without the consent of Robert

All tenants in common have distinct and separable ownership of their respective interests. Co-tenants may sell, encumber, or transfer their interests without obstruction or consent from the other owners. A co-tenant may not, however, encumber the entire property.

It passes by probate to the deceased tenant’s heirs.

A deceased co-tenant’s estate passes by probate to the decedent’s heirs and devisees rather than to the other tenants in common. Any number of heirs can share in the ownership of the willed tenancy.

The tenants have an equal and indivisible ownership interest.

In a joint tenancy, two or more persons collectively own a property as if they were a single person. Rights and interests are indivisible and equal: each has a shared interest in the whole property which cannot be divided up. Joint tenants may only convey their interests to outside parties as tenant-in-common interests. One can not convey a joint tenant interest.

there is a single title to the property.

Whereas tenants in common hold separate title to their individual interests, joint tenants together hold a single title to the property. This is referred to as unity of ownership.

the new owner becomes a tenant in common with the other owners, who continue to hold a joint tenancy with each other and a tenancy in common with the new owner.

A joint tenant may transfer his or her interest in the property to an outside party, but only as a tenancy in common interest. Whoever acquires the interest co-owns the property as a tenant in common with the other joint tenants. The remaining joint tenants continue to own an undivided interest in the property, less the new co-tenant’s share.

It passes to the surviving joint tenants.

In most states, joint tenants enjoy rights of survivorship: if a joint tenant dies, all interests and rights pass to the surviving joint tenants free from any claims of creditors or heirs. When only one joint tenant survives, the survivor’s interest becomes an estate in severalty, and the joint tenancy is terminated

If they are married.

Tenancy by the entireties is a form of ownership reserved exclusively for husband and wife. It features survivorship, equal interests, and limited exposure to foreclosure.

The trustee.

In an estate in trust, a fee owner– the grantor or trustor– transfers legal title to a fiduciary– the trustee– who holds and manages the estate for the benefit of another party, the beneficiary. The trust may be created by a deed, will, or trust agreement.

sell or mortgage the unit without impediment from individual owners of neighboring units.

Condominium units can be individually sold, mortgaged, or otherwise encumbered without interference from other unit owners. An owner may not sell interests in the apartment separately from the interest in the common elements. Unit owners exclusively possess their apartment space, but must share common areas with other owners.

the unit’s pro rata share of the property value as defined in the declaration.

The unit’s pro rata share of the property’s ownership as defined in the declaration determines the amount of a unit owner’s assessment. For example, if a unit represents a 2% share of the property value, that unit owner’s assessment will be 2% of the property’s common area expenses.

the corporate entity of the cooperative association.

The corporate entity of the cooperative association is the only party in the cooperative with a real property interest. The association’s interest is an undivided interest in the entire property. There is no ownership interest in individual units, as with a condominium.

shares in a corporation or association and a proprietary lease in a physical unit.

In a cooperative, or co-op, one owns shares in a non-profit corporation or cooperative association, which in turn acquires and owns an apartment building as its principal asset. Along with this stock, the shareholder acquires a proprietary lease to occupy one of the apartment units.

undivided interests in the property as tenants in common.

In a freehold time-share, or interval ownership estate, tenants in common own undivided interests in the property. Expense prorations and rules governing interval usage are established by separate agreement when the estate is acquired.

If a tenant with a leasehold estate for years remains in possession of the leased premises after lease
expiration, a holdover lease is created. In the absence of a new lease agreement stating otherwise, the
holdover tenancy becomes a periodic tenancy.