Ownership of Real Property

1. Ownership of Real Property

2. What are the major rights that go with ownership of land? • Possession – actual holding or occupancy • Use – the employment of the property • Enjoyment – use without interference or harassment • Disposition – right to sell, lease, mortgage, etc.

3. Various Types of Estates • Fee simple absolute • Fee simple determinable – ownership could be lost if certain conditions (such as use of land) were not met and maintained. • Fee simple subject to condition subsequent – only difference is that it tells what will happen if conditions are not met. • Fee simple subject to executory limitation – transfer to third party if conditions not met.

4. Life Estates • Life estate for grantee’s life • Life estate limited by life of someone other than grantee • Dower – right of wife in husband’s estate • Curtesy – right of husband • Homestead protection

5. Future Interests in Real Estate • Reversionary interest • Remainder interest • Executory interests are not common

6. Leasehold Estates • Tenancy for years • Tenancy from period to period – termination requires notification. • Tenancy at will • Tenancy at sufferance – landlord must takes steps to end this type of tenancy.

7. Other Interests in Land – Not Estates • Easement • License – can be revoked at any time • Profit – right to remove things from the land such as timber, etc. • Covenants – benefits a third party, but does not convey use of the land.

8. Classification of Property Ownership • Sole ownership – estate in severalty (one person) • Tenants in common • undivided interest in whole • no right of survivorship • Joint tenancy – see book • undivided interest • ownership acquired simultaneously • interest is equal for all parties regardless of contribution • right of survivorship

9. Tenancy by the entirety • only for married couples • right of survivorship • can’t dispose of interest without consent of spouse • not used in some states and others restrict its use • Community property • read book for details • not used in Alabama

10. Trusts • Key players include a trustor, trustee and a beneficiary • Inter vivos trust – formed during life of trustor • Testamentary trust – formed at death of trustor • Land trust – only in limited states

11. Real Estate Investment Trust (REIT) • a “mutual fund” for real estate investments • mainly invest in investment grade real estate and mortgages • provides instant diversification of investment • must meet multiple legal requirements – see book for details.