Section 1 The Legal Aspects of Property Ownership

When discussing property ownership, you will hear the term “bundle of rights” this is the various interests or rights an owner has in a property he/she owns.

Real Property is that category of property that is immovable by law. Examples include load bearing walls, stock in a mutual water company, and minerals.

Personal Property also known as “chattel” is that category of property that is generally movable.   Personal Property can be Hypothecated, Alienated and become Real Property.

Hypothecation is an agreement whereby a person puts up collateral to secure the debt of another. This means that a  person (not the debtor) agrees that a piece of real estate belonging to him/her will be collateral for a debt.

Whether used in reference to insurance policies, mortgages or commercial loans, an alienation clause stipulates that should a purchaser or borrower sell his or her interest to another party, the new party must negotiate a new contract with the  issuer or lender. In this way, the term "alienation" is synonymous with  "transfer".

are objects attached to real property or incorporated into the land which are now considered real property; in determining whether or not an item of Personal Property has become a Fixture. Use the Maria test (Method Adaptability Relationship Intention Agreement) the size, cost and time of attachment are not factors.  Examples of a fixture would be garage doors key a pool covering or a painting that has been nailed to the wall.

are Items that are attached to the property, but they are not considered Real Property because they are in a business office. Trade fixtures are not appurtenant to the land; they are personal property.  Easy way to remember is to think of a Dentist chair.  Although the chair is attached to the ground it is not real property, it is personal because when the dentist sells the office, the chair will be going with him because it is used for his business.  The chair is personal because it runs with the person, not the land.

are water rights in regard to a moving body of water like a river or a stream as opposed to Littoral rights which are in regards to body of waters that stand still such as a lake.

are said to “Run with the Land” and they require no separate conveyance.  Appurtenances include Easements, Stock in a Mutual Water Company, Covenants, and Minerals. They are considered real property

Freehold estate is an estate in which ownership is for an indeterminate length of time. 3 types of Freehold estates; Fee simple absoul, Fee Simple defeasible, Life estate

A Fee Simple Absolute is the most interest that one can hold in land.

A Fee Simple Defeasible puts conditions on the use of a property. For example, if an owner could lose title if the condition that no alcohol is sold on the property.

Life Estate is another type of Freehold Estate because it is indefinite in duration.  A Life Estate has a duration that is measure by the length of someone’s life.  For example, if the owner dies, you lose the estate and thus the leases will terminate.  You cannot devise a life estate

Estates that have a specificedtime period such as leaseholds

relates to the degree, quantity ,nature and extent of interest that a person has in real estate.


Estates may be possessory or nonpossessory. Ownership and leasehold estates are possessory, while easement s are non-possessory

• Dower- rights are a wifesright in all property owned by her husband. Curtesy- is the husbands rights to his wifes property 
• to convey property free from dower and curtesy right both spouses must sign property documents.

An estate for years is a leasehold interest in land for a fixed period of time it is often called a tenancy for years. An example of an estate for years would be a summer rental, as it has a defined beginning and end date. No notice to be terminated is need as the end of lease is established at the conception of the rental.  Therefore a lease for 6 months would be an estate for years and a lease with a given beginning and end date would be an estate for years as we

An Estate at Sufferance would apply to a tenant who continues to occupy the property after his rights have expired. A more commonly known term for this would be a “dead beat tenant”

is anything that burdens a title. examples liens easements and restrictions. encumbrances may or maynotcause loss in property value. utility easements are examples of encumbrances that usually enhance property value.

In a Percentage Leases the amount of rent paid by the lessee is determined by calculating a percentage based on the gross receipts of the lessee’s business (i.e., a commercial parking lot).

Both the Tenant of a Rental Apartment and the Owner of a Condominium holds an Estate in Real Property.  A condo is a freehold estate and an apartment is a less than freehold estate.

Periodic tenancy which is also known as an estate from years to years is a tenancy that is not bound to a lease with a fixed period like an estate for years.  A periodic tenancy follows a period such as a month-to-month, week-to-week or year to year.  Proper notice must be given to terminate this lease.

• Estate at will means that it can be ended at any time.  An estate at will gives the lessee the right to possession until the estate is
• terminated by either party; the term of this estate is indefinite.  This is not allowed in many states.