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CHAPTER 41 REAL PROPERTY AND JOINT OWNERSHIP

CHAPTER 41 REAL PROPERTY AND JOINT OWNERSHIP. DAVIDSON, KNOWLES & FORSYTHE Business Law: Cases and Principles in the Legal Environment (8 th Ed.). PROPERTY RIGHTS. Two distinctly different meanings for property: An object subject to ownership, a valuable asset.

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CHAPTER 41 REAL PROPERTY AND JOINT OWNERSHIP

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  1. CHAPTER 41REAL PROPERTY AND JOINT OWNERSHIP DAVIDSON, KNOWLES & FORSYTHE Business Law: Cases and Principles in the Legal Environment (8th Ed.)

  2. PROPERTY RIGHTS • Two distinctly different meanings for property: • An object subject to ownership, a valuable asset. • A group of rights and interests protected by law.

  3. PROPERTY RIGHTS • Rights associated with owning property: • To use property personally. • Give someone else the use of it. • Rent it to someone else. • Use property to secure loan.

  4. PROPERTY RIGHTS • Rights associated with owning property: • Right of support from adjoining lands. • Right to use adjacent body of water. • Limited rights to airspace. • Right to grow things. • Right to things attached to the land.

  5. REAL PROPERTY DEFINED • Definition of Real Property: • Land and things permanently attached to land, like buildings and roadways. • Definition of a Fixture: • Property at one time was movable and independent of real estate but became attached to it. • Examples are: water heaters, built-in ovens, installed dishwashers.

  6. REAL PROPERTY DEFINED • The Nature of Plants: • Generally considered as real property. • UCC classifies plants based on who will remove them: • Seller removes plants: personal property. • Buyer removes plants: real property. • State Governance. • Property laws vary from state to state. • Laws of the state where property located govern land.

  7. REAL PROPERTY DEFINED • Federal Regulation: • Title III of the Americans with Disabilities Act, regulates property open to the public to accommodate those with a disability. • Violators subject to damages and civil penalties.

  8. ACQUISITION OF REAL PROPERTY • Original Occupancy: • Private ownership of land previously owned by the government. • May be accomplished by outright grants or homestead entry laws. • Voluntary Transfer by the Owner: • Transfer accomplished by written deed. • Deed is evidence used for real estate and indicates who owns the land. • Written document required by Statutes of Fraud.

  9. ACQUISITION OF REAL PROPERTY • Voluntary Transfer by the Owner. • Warranty deed: contains implied covenants to effect that a good and marketable title is being conveyed. • Grant deed: includes covenant that grantor has not conveyed property interest to anyone else and all the encumbrances are listed on the deed. • Quitclaim deed: grantor makes no promises about property interest.

  10. ACQUISITION OF REAL PROPERTY • Delivery of the Deed: Grantor delivers deed to grantee to complete transfer or uses a third person to deliver. • Recording of the Deed: Accomplished by filing the deed with the proper authority. • Not a legal prerequisite to transfer, but establishes grantee’s interest in the property.

  11. ACQUISITION OF REAL PROPERTY • Transfer by Will or Intestate Succession. • Person arranges to transfer real property by provisions in a valid will. • If person doesn’t have valid will pass by intestate succession statute of state where property is located. • Intestate statute determines who inherits property if valid will does not exist.

  12. PROTECTION OF REAL PROPERTY • Real property subject to loss: • By operation of law. • Due to actions of government. • Due to actions of another person. • Or by act of nature. • Such losses are generally involuntary on part of the owner.

  13. PROTECTION OF REAL PROPERTY • Involuntary Transfers by Operation of Law. • Lender may foreclose if a person is in default on a mortgage. • Property may be attached to satisfy a legal judgment. • Failure to pay for labor or materials will create a mechanic’s liens.

  14. PROTECTION OF REAL PROPERTY • Involuntary Transfers by Government Action. • Government has right to take private land for public use. • This right is called eminent domain. • Government must have legitimate use and must pay owner a reasonable amount of money. • Government may enact zoning and planning laws that restrict how the property may be used.

  15. PROTECTION OF REAL PROPERTY • Private Restrictions on Land Use: • Restrictive covenants may limit how land can be used. • These are private agreements between landowners on the use of the property.

  16. PROTECTION OF REAL PROPERTY • Adverse Possession: • Occurs when someone tries to take title and possession of real estate from the owner. • If possession is of an adverse nature and continues for sufficient length of time, adverse possessor may take ownership from true owner.

  17. PROTECTION OF REAL PROPERTY • Adverse Possession. • For possession to be adverse, it must be actual, open, and notorious. • Actual: adverse possessor is actually on land and is using real estate in a reasonable manner. • Open: must be obvious that adverse possessor is on the property. • Notorious: must be adverse or hostile to the true owner. • Required holding period varies from state to state and is specified by state statute.

  18. PROTECTION OF REAL PROPERTY • Easements: Person entitled to use the land of another in a particular manner. • Not a right to own, but the right to use property in a particular manner. • Easements created by: • Express. • Prescription. • Contract. • Necessity. • Implication.

  19. RENTAL OF REAL PROPERTY • Types of Tenancies: • Owner of real property may allow others to use their property. • Exchanging temporary possession of property for money or other consideration is a rental agreement. • Tenancies are governed by the rules of both contract law and real estate law.

  20. RENTAL OF REAL PROPERTY • Types of Tenancies: • Tenancy for a fixed term: automatically expires after a set period of time. • Periodic tenancy: starts at specific time and continues for successive periods until expired. • Tenancy at will: terminated by landlord or tenant at will. • Tenancy at sufferance: tenant entered into possession properly and with landlord’s permission but wrongfully remains on the property.

  21. RENTAL OF REAL PROPERTY • Rights and Duties of Tenants: • Tenants rents the right to exclusive possession and control of premises. • Landlord not entitled to enter the premises. • Tenant is allowed to remove trade fixtures, but if removal causes damages, tenant must repair. • Tenants do not have an obligation to make major improvements.

  22. RENTAL OF REAL PROPERTY • Rights and Duties of Tenants: • Warranty of Habitability: landlord impliedly promises that premises will be fit for living. • Constructive Eviction: owner does not protect interest of tenant and allows material interference with tenant’s enjoyment of premises. • Assignments and Subleases: allowed unless prohibited by lease. Transfer of the tenant’s entire interest in the lease (assignment); tenant transfers only part of interest and retains the balance (sublease).

  23. RENTAL OF REAL PROPERTY • Rights and Duties of Landlords: • Have right to retake possession of property at the end of the lease. • Rent: compensation landlord receives in exchange for granting tenant the right to use the property. • Damages by the Tenant: landlord has right to reimbursement from tenant for any damages caused by the tenant.

  24. RENTAL OF REAL PROPERTY • Rights and Duties of Landlords: • Security Deposits: money to be used after tenant has vacated the premises to repair any damage negligently/intentionally caused by tenant. • Duty to Protect a Tenant and His or Her Guests: landlord does not warrant premises are safe but does have duty to warn tenant of latent defects. • Rights After Abandonment by a Tenant: tenant wrongfully abandons premises during the term of the lease, landlord has several options.

  25. LEGISLATIVE TRENDS • Discrimination in housing prohibited by federal statutes. • Amendment increased the amount of protection by providing methods for enforcement: • HUD can initiate lawsuit in federal court or before administrative law judge, if all parties agree. • Person subjected to discrimination can file suit in state or federal court. • U.S. attorney general can file suit if pattern or practice of discrimination exist.

  26. LEGISLATIVE TRENDS • To recover retaliatory eviction tenant must prove: • Complaint was bona fide, reasonable, and serious. • Did not create the problem. • Complaint was filed before the landlord began eviction proceedings. • Primary reason landlord began eviction proceedings was to retaliate against the tenant for filing complaint.

  27. JOINT OWNERSHIP OF PROPERTY • Exist when two or more people have concurrent title to property. • Five forms of joint ownership recognized in property law. • Each of co-owners have undivided right to use the whole property. • Most forms of co-ownership created voluntarily or by someone else.

  28. JOINT OWNERSHIP OF PROPERTY • Primary remedies to resolve a dispute are: • To sell property and divide the proceeds. • To divide the property equitably and give each tenant a separate parcel. • Tenancy in Common: • Exists when two or more people have an undivided right to use the whole property. • Tenant may sell, assign, give, and in a valid will, pass his/her interest. • No valid will, then interest passes to heirs.

  29. JOINT OWNERSHIP OF PROPERTY • Joint Tenancy with Rights of Survivorship: • Each tenant has an equal interest in the property. • Interest passes to other tenants upon death of a tenant. • Will has no effect on this type of tenancy.

  30. JOINT OWNERSHIP OF PROPERTY • Tenancy by the Entireties: • Tenants must be husband and wife, who share the property. • Each tenant is a joint owner in the whole property. • One spouse dies, the survivor receives the property.

  31. JOINT OWNERSHIP OF PROPERTY • Community Property: • Each spouse owns one-half of property accumulated during marriage. • Separate property includes: • Property acquired before marriage • Inherited, received by gift, or by intestate succession • Purchased with separate funds

  32. JOINT OWNERSHIP OF PROPERTY • Distinguishing Among the Forms of Joint Ownership: • If tenants are married, most states presume community property or entireties property. • If state recognized neither form, it will presume a joint tenancy with the right of survivorship. • If tenants are not married, most states presume a tenancy in common.

  33. JOINT OWNERSHIP OF PROPERTY • Transfer on Death Ownership: • Transfer on death or pay on death ownership should be distinguished from forms of joint ownership. • Recipient does not have an interest in the asset during the owner’s life. • Recipient entitled to the assets at the owner’s death.

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