RE unit 3-6

Not such a thing

Agricultural

Tangible

• Residential – human living
• Commercial – generating income
• Investment – held by owners for investment purposes, usually not owner occupied
• Industrial – warehouses, factories, etc.
• Agricultural – growing crops and raising livestock
• Special purpose – doesn't fall into other categories: churches, hospitals, schools, etc.; could be parks, shorelines, etc.
• Unimproved or undeveloped land – no buildings or residents

No, hotels and motels are not residential properties because they are considered to be only temporary housing.

• Research and Development – 1-2 stories with 50% office or lab space and the rest workshops, storage, or light manufacturing
• Low-rise – 1-3 stories with no elevator
• Garden office – 1-5 stories with extensive landscaping
• Mid-rise – 4-15 stories with one elevator
• High-rise – more than 15 stories with multiple elevators, not considered skyscrapers

Physical – immobility, indestructibility, uniqueness Economic – supply and demand, scarcity, permanence of investment

personal is movable, real is not Tangible vs intangible – tangible is physical, visible, material, while intangible is abstract with no physical existence

typically defined as anything between offices and warehouses, usually combining the uses of both.

building of several floors with large areas of unobstructed space, originally rented out for light industrial purposes and now frequently converted to residential occupancy.

• Desire – how much the purchaser wants or needs the item makes the item more or less valuable.
• Utility – how well the item can do the job determines its value to the purchaser.
• Scarcity – the item is quite valuable if it the supply is limited but its value is less if the supply is great.
• Purchasing power – if the purchaser cannot afford to pay a high price for the item, then the item's value is diminished because it is financially out of reach.

• Indestructible and immovable
• Long term investment
• Land does not depreciate, only improvements depreciate
• Property insurance insures improvements, not the land
• Property is nonhomogeneous, unique

inherent product value, unique appeal, demand must come to the supply, cannot always be sold for cash, slow to respond to market changes, local market

Availability of skilled labor, availability of construction loans and financing, availability of land, availability of materials, investment returns, the community's master plan, government regulation and police power

Local real estate prices, household composition (number and age of family members), consumer income, availability of mortgage credit, consumer tastes

• Vacancy rates – too high means too little movement; too low means demand is high and prices are low.
• Price/sales information – how much property has sold and at what price indicates how the market is functioning
• Building permits – indicates new construction; the more new construction, the better the market

Zoning, controlling and permitting new development, taxing, interest rates, environmental legislation and regulations

Supply

Demand

Market equilibrium

Employment availablitity

Supply and demand are equal and price and value are equal

No

Supply

When two or more owners share ownership, the interest of an individual owner is undivided and indivisible in the sense that it pertains to a fractional part of the entire estate, not to a physical portion of the real property.

If the interest-holder enjoys the right of possession, the estate is an estate in land. If the interest-holder does not have the right of possession, the interest is an encumbrance in the case of a private interest-holder, or some form of public interest in the case of a non-private (i.e., governmental) interest-holder.

Whether an estate in land is a freehold or leasehold estate depends on the length of time the holder may enjoy the right to possess the estate, the relationship of parties owning the estate, and specific interests held in the estate. The duration of the owner's rights in a freehold cannot be determined: they may last for a lifetime, for less than a lifetime, or for generations beyond the owner's lifetime. In a leasehold, they have a specific duration, as represented by the lease term.

• Fee Simple
• Fee Defeasible
• Life Estate
• Fee Tail

Fee simple estate. It includes the complete bundle of rights and the tenancy is unlimited.

• The property must be used for a certain purpose or under certain conditions.
• If the use changes or if prohibited conditions are present, the estate reverts to the previous grantor of the estate.

A life estate is limited in duration to the life of the owner or other named person. When the life tenant dies, the estate passes to the original owner or another named party. The life tenant does not have the right to pass ownership to his or her heirs.

With all other estates in land-- life, leasehold-- the holder of the estate cannot control what happens to the estate in the future. The life estate reverts or is remaindered; the leasehold terminates when the lease expires.

• Conventional life estate – created by a grant wherein the property owner grants the property to a life tenant
• Legal life estate – created by state law wherein the rights of surviving family members are protected when the husband or wife dies

• any combination of bundle of rights
• estates, encumbrances, police powers

right of possession; also called tenancies

limited duration

duration is not necessarily limited

"ownership" in contrast to leasehold

Fee simple estate

fee simple absolute

defeasible

passes to another upon death of a named party

interest of a named party to receive estate after holder's death

reversion: interest of previous owner to receive estate after holder's death

Legal life estate

Community property

Grantor

Any combination of the bundle of rights

Reversionary estate

Freehold estate

• Legal life estate is created by statute
• Conventional life estate created by a grant

Ordinary life estate

Owner

Legal life estate

The grantee or buyer decides. The seller decides the type of estate transferred.

The primary difference is the number of owners—one vs. two or more. Secondarily, the treatment of the estate on the death of an owner. In a severalty, the estate passes to heirs by probate. In a co-ownership, the estate may pass to heirs (tenancy in common) or to surviving co-owners (joint tenancy, tenancy by the entireties, tenancy in partnership) or to a combination (community property).

Tenancy by the entireties requires co-owners to be married; tenancy by the entireties can have only two owners; a tenant by the entireties cannot convey his or her interest separately to an outside party.

Applies to legally married spouses; distinguishes between community property and separately-owned property; protects each spouse's ownership of the whole community property while spouses live; preserves half of community property for surviving spouse.

Anonymity; ease of transfer; ease of use as collateral; potential benefits in treatment of estate on death of beneficiary (grantor).

Condo owner actually owns real property-- airspace and share in common elements-- while co-op owner owns shares in a corporation and proprietary lease; condo unit can be transferred, encumbered or foreclosed as an entity, while co-op interest cannot be so handled, but only as an interest in the corporation; entire property is endangered by default of co-op share holder, but only individual unit is endangered by default of a condo owner.

The deeded time-share owner owns real property; the interval owner owns personal property; the deeded owner acquires the rights to use (a unit at a specific time), rent, sell, exchange or bequeath the interest; the interval acquires a right-to-use (no particular unit, at a specific time) and may have other rights to sell, exchange, etc., if allowed by the resort owner.

sole ownership of a freehold estate

co-tenants enjoy an individually owned, undivided interest; any ownership share possible; no survivorship

equal, undivided interest jointly owned by two or more parties, with survivorship; requires four unities to create: time, title, interest, possession; joint tenants can sell their interest, but the interest becomes a tenancy in common with remaining joint tenants

equal, undivided interest jointly owned by husband and wife

per state law, joint ownership of property by spouses as opposed to separate property

acquired before marriage or by gift or inheritance, personal injury claims, purchase from separate funds, by sale of separate property, or written contract with the spouse

- ownership by business partners

property granted by trustor to fiduciary trustee for benefit of beneficiary

- personal and real property ownership created to take effect during one's lifetime (living trust) or after one's lifetime (testamentary)

- real property ownership where grantor and beneficiary are same party; beneficiary uses, controls property, does not appear on public records

- freehold ownership of a unit of airspace plus an undivided interest in the common elements as tenant in common with other owners

may be sold, encumbered or foreclosed without affecting other unit owners

created by developer's declaration and recorded master deed; declaration includes definitions of land, common elements, units, shares of ownership, plans for governance, bylaws, covenants and restrictions

ownership of shares in owning corporation, plus proprietary lease in a unit; corporation has sole, undivided ownership

• Interest
• Interest
• sold

- a lease or ownership interest in a property for the purpose of periodic use by the owners or tenants on a scheduled basis

real property, owned for the period specified in purchase contract; includes right to use a specific unit at a specific time each year; time-share unit can be transferred; time-share owners own the resort

personal property, owned for a specified number of years; right-to-use a non-specific unit for specified intervals; often convertible to points which can be transferred; developer owns the resort

agreement to rent a property on a scheduled basis over the duration of the lease term; right to use returns to resort at end of lease period

tenants in common own undivided interests in real property; usually may transfer, rent, exchange

It passes by probate to the deceased tenants heirs

A fee simple interest in an airspace and tenancy in common interest in a share of common elements

Personal property

The cooperative corporation

Tenancy in common

Initiate a partition suit

The units pro rata share of the property value as defined in the declaration

Declaration and master deed