Chapter 47: Real Property

1. Chapter 47:Real Property

2. § 1: Nature of Real Property • Real property is immovable and includes: • Land. • Buildings. • Trees and vegetation. • Airspace. • Subsurface (mineral) rights. • Fixtures.

3. § 2: Ownership Interests in Real Property Ownership interests are classified as either Possessory or Non-Possessory: • A Possessory interest such as a fee simple, life or leasehold estate, gives the owner a right to possess the land. • A Nonpossessory interest such as an easement, profit or license, does not give the owner a right to possess the land.

4. Fee Simple (Absolute) • Although not absolute, the fee simple (sometimes called fee simple absolute) gives the owner the greatest aggregation of rights, powers and privileges possible under American law and can assigned to heirs. • A “conveyance” (transfer of real estate) “from A to B” creates a fee simple. A is the Grantor and B is the Grantee.

5. Life Estates • Estate that lasts for the life of some specified individual. “A grants Blackacre to B for B’s life” grants B a life estate in Blackacre. • When B dies, Blackacre returns to A or his heirs or assigns, or a third party in the same condition, normal wear and tear excepted. • Grantor A retains a “future interest” in the property. • During B’s life, she can possess, use, and take the fruits of the estate, but not take from the property itself.

6. Reversionary Interest Life Estate Grantor Grantee Future “Reversionary” Interest • Reversionary Interest: Grantor retains right to re-possess land when Grantee’s life estate expires.

7. Life Estate Grantor Grantee Remainder 3P Future “Remainder” Interest Grantor assigns/transfers/sells her future interest to a 3P who now has a remainder. When Grantee dies, interest passes to 3rd Party.

8. Leasehold Estates • A real property owner or lessor agrees to convey the right to possess and use the property to a lessee for a certain period of time. • Tenancy for Years: • Periodic Tenancy. • Tenancy at Will. • Tenancy at Sufferance.

9. Non-Possessory Interests • An easementis a right of a person to make limited use of another person's real property without taking anything from the property. • A profitis the right to go onto land in possession of another and take away some part of the land itself or some product of the land. • Property that is benefited by easement/profit carries the the interest with the sale of land.

10. In Gross Appurtenant A B A B Non-Possessory Interests [2] • If the owner of the easement or profit is contiguous to the owner of the land, it is said to be appurtenant (‘easement appurtenant”). If the owner’s property is separated, it is said to be gross.

11. Non-Possessory Interests [3] • Easements or profits can be created by: • Deed (physical delivery is sufficient). • Will (at Grantor’s death). • Contract between Grantor and Grantee. • Implication: circumstances surrounding creation of easement imply its creation. • Necessity. • Prescription: easement by adverse possession.

12. Termination of an Easement or Profit • By deed back to owner of the land burdened by it. • Owner of easement or profit becomes owner of the land burdened with it. • Abandonment by the owner of the right.

13. Licenses • Revocable right of a person to come unto another’s land without removing anything from the land. • Personal privilege that arises from the consent of the owner of the land that can be revoked.

14. § 3: Transfer of Ownership • Ownership in real property can be transferred by: • A written Deed. • A Gift. • A Sale. • An Inheritance. • Adverse Possession. • Eminent Domain.

15. Deeds • A Deed is the instrument setting forth the interests in real property being transferred. • Necessary components of a Deed: • Names of Grantor and Grantee. • Words evidencing intent to convey. • Legally sufficient description of the land. • Grantor’s signature. • Delivery of the Deed.

16. Types of Deeds • Warranty Deed. • Special Warranty Deed. • Quitclaim Deed. • Grant Deed. • Sheriff’s Deed. • Period of redemption.

17. Recording Statutes • Recording a deed (or any interest in real property) puts the public on notice of the new owner’s interest in the land and prevents the previous owner from fraudulently conveying the same interest to another buyer. • Race statute. • Pure notice statute. • Notice-race statute.

18. Contracts for the Sale of Real Estate • Contracts must be in writing and signed to be enforceable under the Statute of Frauds. • Brokers and Agents. • Formation of the Sales Contract. • Warranty of Habitability. • Seller’s Duty to Disclose Defects. • Seller must deliver marketable title. • Case 47.1: Smith v. Levine (1995).

19. Sale Process Buyer’s Purchase Offer Home Inspection Seller’s Response Title Exam & Insurance Purchase & Sale Agreement Escrow Financing Closing

20. Transfer By Inheritance • Owner of real property dies, his property is transferred by: • Will (testate). • Without Will (intestate). • Title is transferred at the time state law so provides in its testate and intestate laws.

21. Transfer By Adverse Possession • One person possesses the property of another for a certain statutory period of time, that person automatically acquires title to the land, just as if there had been a conveyance by deed. Must be: • Actual and exclusive. • Open, visible and notorious. • Continuous and peaceable. • Hostile and adverse. • Case 47.2: Klos v. Molenda (1986).

22. § 4: Limits: Eminent Domain • Rights in property are not absolute. They are constrained by federal and state laws, e.g., nuisance, tax and environmental. • Transfer By Eminent Domain: The 5th amendment gives the government the right to “take” private land for public use with just compensation. • Case 47.3: Purdie v. Attorney General(1999).

23. Limits: Zoning • Zoning is the State’s power to control the use of land through legislation without having to compensate the owner (unless so severe that it is a “taking”). • Must be rational in advancing state interest and must be non-discriminatory. • Variances. • Building Permits.

24. Limits: Restrictive Covenants • Private restriction on use of land. Restrictions of the use of the land which is binding on the party who purchases originally and on subsequent purchasers –if it “runs with the land”. • Running with the land requires: • Written agreement. • Must bind all subsequent owners. • Must touch and concern the land. • Successor to the original parties must have notice of the covenant. • Actual or constructive.

25. Law on the Web • Housing and Urban Development. • Information on the Buying and Selling of Homes. • Legal Research Exercises on the Web.