- Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.
Define: Air Rights
- The rights to use the space above the earth, may be sold or leased independently, provided the rights have not been preempted by law.
- The right to use the open space above a property, usually allowing the surface to be used for another purpose.
Define: Annexation
- Process of converting personal property into real property. (e.g., If a landowner buys cement, stones, and sand and mixes them into concrete to construct a sidewalk across the land, the landownder has converted personal property (cement, stones, and sand) into real property, a sidewalk).
Define: Appurtenance
- A right or privilege associated with the property, although not necessarily a part of it.
- A right, privilege, or improvement belonging to, and passing with, the land; "runs with the land."
- Typical appurtenances include parking spaces in multiunit buildings, easements, water rights, and other improvements. An appurtenance is connected to the property, and ownership of the appurtenance normally transfers to the new owner when the property is sold.
Define: Area Preference
- People's desire for one area over another, based on a number of factors such as history, reputation, convenience, scenic beauty, and location.
Define: Bundle of Legal Rights
- The concept of land ownership that includes ownership of all legal rights to the land possession, control within the law, enjoyment, exclusion, and disposition.
Define: Chattel
- Items of personal property including such tangibles as chairs, tables, clothing, money, bonds, and bank accounts are considered "chattels".
- Items, called "chattels", that do not fit into the definition of real property; movable objects.
Define: Emblements
- Plant or crops that require annual cultivation (such as fruit, vegetables, and grains) are legally known as emblements or fructus industriales (fruits of industry). These items are generally considered personal property.
- The legal term for plants that do not require annual cultivation (such as trees, perennial shrubbery, and grasses) is fructus naturales (fruits of nature). These items are considered real estate.
Define: Fixture
- An item of personal property that has been converted to real property by being permanently affixed to the realty. (e.g., Fixtures are heating systems, elevator equipment in high-rise buildings, radiators, kitchen cabinets, light fixtures, and plumbing).
- Almost any item that has been added as a permanent part of a building is considered a fixture.
Define: Improvement
- Any artificial thing attached to the land, such as a building or a fence as well as infrastructures, such as sewers.
- Any structure, usually privately owned, erected on a site to enhance the value of the property (e.g., building a fence or a driveway).
- A publicly owned structure added to or benefiting the land (e.g., a curb, sidewalk, street, or sewer).
Define: Land
- The earth's surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water.
Define: Manufactured Housing
- Dwellings that are built off-site and trucked to a building lot where they are installed or assembled.
- This type of housing includes modular, panelized, precut, and mobile homes.
Define: Nonhomogeneity
- A lack of uniformity; dissimilarity. Because no two parcels of land are exactly alike, real estate is said to be non-homogeneous.
- The concept that no two parcels or property are exactly the same or in the same location.
Define: Personal (Personalty) Property
- All the property that can be owned and that does not fit the definition of real property.
- An important distinction between the two is that personal property is movable.
Define: Real Estate
- Land at, above, and below the earth's surface.
- A portion of the earth's surface extending downward to the center of the earth and upward infinitely into space, including all things permanently attached to it, whether naturally or artificially.
- The term real estate, or realty, is similar to the term land but includes not only the natural components of the land but also all permanent man-made improvements on and to the land.
Define: Real Property
- The interests, benefits, and rights that are automatically included in the ownership of land and real estate. Real property includes the earth's surface, subsurface, and airspace, including all things permanently attached to it by nature or people, and the legal rights innate to the ownership of a parcel of real estate.
- The interests, benefits, and rights inherent in real estate ownership.
Define: Severance
- Changing an item of real estate to personal property by detaching it or separating it from the land (e.g., A growing tree is real estate until the owner cuts it down, literally severing it from the property. Similarly, an apple becomes personal property once it is picked from a tree).
Define: Situs
- The personal preference of people for one area over another, not necessarily based on objective facts and knowledge.
Define: Subsurface Rights
- Ownership rights in a parcel of real estate to the water, minerals, gas, oil, and so forth that lie beneath the surface of the property.
- An owner may transfer surface rights without transferring subsurface rights.
Define: Surface Rights
- Ownership rights in a parcel of real estate that are limited to the surface of the property and do not include the air above it (air rights) or the minerals below the surface (subsurface rights).
Define: Trade Fixture
- An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires (e.g., Some examples of trade fixtures are bowling alleys, store shelves, and barroom and restaurant equipment).
- Trade fixtures must be removed on or before the last day the property is rented. The tenant is responsible for any damage caused by the removal of a fixture. Trade fixtures that are not removed become the real property of the landlord. Acquiring the property in this way is known as accession.
Define: Water Rights
- Special common-law rights held by owners of land adjacent to rivers, lakes, or oceans and are restrictions on the rights of land ownership.
- Water rights are particularly important rights in drier western states, where water is a scarce and valuable public commodity.
True or False:
Manufactured housing is generally considered real property.
False.
The distinction between real and personal property is not always obvious. Manufactured housing is generally considered personal property, even though its mobility may be limited to a single trip to a park or development to be hooked up to utilities. Manufactured housing may, however, be considered real property if it becomes permanently affixed to the land. The distinction is generally one of state law. Real estate licensees should be familiar with the local laws before attempting to sell manufactured housing.
True or False:
Fixtures belong to the owner of the real estate, but trade fixtures are usually owned and installed by a tenant for the tenant's use.
True
True or False:
Trade fixtures are considered a permanent part of a building, but fixtures are removable. Fixtures may be attached to a building so they appear to be trade fixtures.
False.
Fixtures are considered a permanent part of a building, but trade fixtures are removable. Trade fixtures may be attached to a building so they appear to be fixtures.
True or False:
Legally, fixtures are real property, so they are included in any sale or mortgage. Trade fixtures, however, are considered personal property and are not included in the sale or mortgage of real estate, except by special agreement.
True
What are the four "economic" characteristics of land that affect its value as a product in the marketplace?
- Scarcity
- Improvements
- Permanence of investment
- Location or area preference
What are the three "physical" characteristics of land?
- Immobility
- Indestructibility
- Uniqueness
Real estate generally includes all the following EXCEPT:
a. trees b. air rights c. annual crops d. mineral rights
c. annual crops
A woman rents space in a commercial building where she operates a bookstore. In the bookstore, she has installed large reading tables fastened to the walls and bookshelves that create aisles from the front of the store to the back. These shelves are bolted to both the ceiling and the floor. Which of the following BEST characterizes the contents of the bookstore?
a. The shelves and tables are trade fixtures and will transfer when the property owner sells the building. b. The shelves and tables are trade fixtures and may properly be removed by the woman before her lease expires, and the tenant would be responsible to the landlord for any damage that their removal caused to the premises. c.Because the woman is a tenant, the shelves and tables are fixtures and may not be removed except with the building owner's permission. d.Because the shelves and tables are attached to the building, they are treated the same as other fixtures.
b. The shelves and tables are trade fixtures and may properly be removed by the woman before her lease expires, and the tenant would be responsible to the landlord for any damage that their removal caused to the premises.
The term "nonhomogeneity" refers to:
a. scarcity b. immobility c. uniqueness d.indestructibility
c. uniqueness
Another term for "personal property" is:
a. realty b. fixtures c. chattels d.fructus naturales
c. chattels
When an owner of real estate sells the property to someone else, which of the "sticks" in the bundle of legal rights is the owner as seller using?
a.Exclusion b. Legal enjoyment c. Control d. Disposition
d. Disposition
A man inherited a piece of vacant property from his uncle. First, he removed all the top-soil, which he sold to a landscaping company. He then removed a thick layer of limestone and sold it to a construction company. Finally, he dug 40 feet into the bedrock and sold it for gravel. When the man died, he left the property to his daughter. Which of the following statements is TRUE?
a. The daughter inherits nothing because the property no longer exists. b.The daughter inherits a large hole in the ground because the property goes down to the center of the earth. c.The daughter owns the gravel, limestone, and topsoil, no matter where it is. d. The man's estate must restore the property to its original condition.
b. The daughter inherits a large hole in the ground because the property goes down to the center of the earth.
The buyer and the seller of a home are debating whether a certain item is real or personal property. The buyer says it is real property and should convey with the house; the seller says it is personal property and would not convey without a separate bill of sale. In determining whether an item is real or personal property, a court would NOT consider which of the following?
a. The cost of the item when it was purchased. b. Whether its removal would cause severe damage to the real estate. c. Whether the item is clearly adapted to the real estate. d. Any relevant agreement of the parties in their contract of sale.
a. The cost of the item when it was purchased.
Which of the following is a physical characteristic of land?
a. Indestructibility b. Improvements c. Area preference d. Scarcity
a. Indestructibility
Which of the following describes the act by which real property can be converted into personal property?
a. Severance b. Accession c. Conversion d. Attachment
a. Severance
While moving into a newly purchased home, the buyer discovered that the seller had taken the ceiling fan that hung over the dining room table. The seller had not indicated that the ceiling fan would be removed, and the contract did not address this issue. Which statement is TRUE?
a. Ceiling fans are normally considered to be real estate. b.The ceiling fan belongs to the seller. c. Ceiling fans are considered trade fixtures. d. Ceiling fans are considered personal property.
a. Ceiling fans are normally considered to be real estate.
A buyer purchased a parcel of land and immediately sold the mineral rights to an oil company. The buyer gave up which of the following?
a. Air rights b. Surface rights c. Subsurface rights d. Occupancy rights
c. Subsurface rights
A homeowner is building a new enclosed front porch on his home. A truckload of lumber that the homeowner purchased has been left in the driveway for use in building the porch. At this point, the lumber is considered to be:
a. real property because it will be permanently affixed to the existing structure. b. personal property. c. a chattel that is real property. d. a trade or chattel fixture.
b. personal property.
Method of annexation, adaptation to real estate, and agreement between the parties are the legal tests for determining whether an item is:
a. a trade fixture or personal property. b. real property or real estate. c. a fixture or personal property. d. an improvement.
c. a fixture or personal property.
Parking spaces in multiunit buildings, water rights, and similar things of value are classified as:
a. covenants b. emblements c. chattels d. appurtenances
d. appurtenances
A paint company purchases 100 acres of scenic forest and land and builds several tin shacks there to store used turpentine, varnish, and similar chemical waste. Based on these facts alone, which statement is TRUE?
a. The company's action constitutes improvement of the property. b. The chemicals are considered appurtenances. c. If the company is in the business of storing toxic substances, the tin shacks are considered trade fixtures. d. Altering the property in order to store waste is not included in the bundle of legal rights.
a. The company's action constitutes improvement of the property.
The phrase "bundle of legal rights" is properly included in:
a. the definition of real property. b. a legal description. c. real estate transactions. d. leases for less than one year.
a. the definition of real property.
All of the following are included in the right to control one's property EXCEPT the right to:
a. sell the property to a neighbor. b. exclude utility meter readers. c. erect No Trespassing signs. d. enjoy profits from its ownership.
b. exclude utility meter readers.
According to law, a trade fixture is usually treated as:
a. a fixture. b. an easement. c. personalty. d. a license.
c. personalty.
A buyer is interested in a house that fits most of her needs, but it is located in a busy area where she is not sure she wants to live. Her concern about the property's location is called:
a. physical deterioration. b. area preference. c. permanence of investment. d. immobility.
b. area preference
Which of the following is considered personal property?
a. Wood-burning fireplace b. Awnings c. Bathtub d. Patio furniture
