Rights and Interests in Land

2. Chapter 3 Rights and Interests in Land

3. In This Chapter General and legal information concerning rights and interests in land.

4. Right to Use of Land • Feudal System • Allodial System

5. Government Rights in Land Property Taxes • The right of government to tax private property. • Provides money for schools, fire protection, parks, • libraries and is the major source of income for • government revenue.

6. Government Rights in Land Eminent Domain The right of government to take private propertyfor public use upon payment of just compensation. Condemnation proceedings Severance damages

7. Government Rights in Land Police Power • The right of government to regulate private property for the protection of the general public’s health, morals, and welfare. • Examples include building & fire codes, zoning, and • planning laws.

8. Government Rights in Land Escheat • means “fall back” • Ownership of property passes to the government if there is no will and no heirs.

9. Fee Simple • Estate refers to one’s legal interest or rights in land. • Fee Simple is the largest estate one can hold in real estate. • Title refers to the ownership.

10. Encumbrances • Any claim, right, lien, estate, or liability that limits the fee simple title to property.

11. Real Estate as a Bundle of Property Rights • Property rights are what gives value to the real estate. • Private property rights are subject to limitations imposed by government. Thus, this can limit the value of the investment.

12. The Fee Simple Bundle of Rights Real estate ownership is, in actuality, the ownership of rights to land. The largest bundle available for private ownership is called “fee simple”.

13. Removing Sticks from the Fee Simple Bundle Note that the fee simple bundle shrinks as an owner voluntarily removes rights from it.

14. Real Estate as a Bundle ofProperty Rights Right or Benefit Stick in Bundle Control Mortgage Lease Impose covenants or conditions Grant easement Grant license Build or remove structures Use & Enjoy Occupy as residence Use as place of business Farm Mine/drill for oil, etc. Place of recreation Exclusion Maintain privacy Non-trespass Disposition Sell or refuse to sell Give Will Abandon

15. Easements • Right or privilege one has to use the land of another. • Grantis a written document. • Implicationis the right to cross over another’s property to get to your land. • Prescriptionis a right created by use of another’s property as easement for a period of time.

16. Easement Types • Easement appurtenantis the right to cross over a property in front in order to get to your property in the back. • Servient estate- back lot • Dominant estate- front lot • Easement in Grossis given to person owning land. • Party Wall Easement exist when a single wall straddles the lot line that separates two parcels of land.

17. Easement Termination • When the purpose for the easement no longer Exists. • When the dominant and servient estates are combined with the intent of extinguishing the easement. • By release from the owner of the dominant estate to the servient estate, or by lack of use.

18. Commonly Found Easements

19. Encroachments The unauthorized intrusion of a building or other improvement onto another person’s land.

20. Commonly Found Encroachments

21. Deed Restrictions Private agreements that govern the use of land are known as deed restrictions or deed covenants.

22. Liens • Property tax lien • Mechanic’s lien • Judgment lien • Mortgage lien • Voluntary & Involuntary liens • Specific & General liens

23. Qualified Fee Estate • Subject to certain limitations imposed by the person creating the estate • Determinable • Condition subsequent • Condition precedent.

24. Life Estate • Conveys an estate for the duration of someone’s life. • The duration of the estate can be tied to the land of the life tenant (the person holding the life estate) or to a third party. • Someone must be named to acquire the estate upon its termination.

25. Community Property • Texas is a community property state along with nine others. • A right that arises on marriage and terminates upon divorce or death. • A legal theory that that during marriage each spouse has an equal interest in all property acquired by their joint effort.

26. Texas Homestead • A constitutional right that is an exemption of your homestead from forced sale by creditors. • Protection is automatic. • Exemptions: • Purchase money mortgage • Taxes • Mechanics’ & materialmen’s liens • Federal tax liens • Refinancing homestead liens • Home equity liens • Reverse mortgages

27. Homestead Limitations • Urban homestead is a lot or lots of not more than 10 acres together with any improvements. • Rural homestead for a married couple is up to 200 acres and for a single person up to 100 acres.

28. Home Equity Loans Banned for 150 years Available since January 1, 1998

29. Other Estates • Freehold Estates • Leasehold Estates • Estate for years • Periodic estate • Estate at will • Tenancy at sufferance

30. Subsurface Rights • This is the dominant estate in Texas! • Owner of mineral rights can reasonably enter upon the property to extract the minerals. • Minerals are real property until they are removed from the ground and become personality.

31. Cross section of Estates & Rights in Land

32. Rights and Interests in Land Overview

33. Key Terms • Chattel • Easement • Eminent domain • Encroachment • Encumbrance • Fee simple • Homestead protection • Lien • Title