Real Estate Ch 1 4 7 Study Guide Chapter 1 4Questions Real Estate Property is Tangible physical assets that can be owned Intangible nonphysical assets stocks bonds mortgages leases Real Estate used three ways As a tangible asset As a bundle of rights possession use enjoyment As industry or profession Real Estate In the Economy about half of the worlds wealth Four Quadrants of Real Estate Capital markets Equity owners Private Directly held individuals partnerships firms institutions Public Indirectly held investors in publicly traded real estate companies and Equity REITs Debt lenders Private Directly held Commercial banks savings institutions credit unions insurance companies Public Indirectly held Investors in mortgage backed securities and mortgage REITs Characteristics of Real Estate Markets privately negotiated deals with high transaction costs private lenders Chapter 2 19 Questions Real Property Interests A bundle of Rights Fee Simple Interest Most Rights Disposition Use Possession Exclusion Keep People off Real Property Rights in land and its permanent structure Fixtures Real property that formally was personal property EX landlord book shelves No time limit to become a fixture o Manner of Attachment intention of the parties o o Estates o o Leasehold estates Tendency for years must be written if more than one year Periodic tenancy oral agreement no length of time Easements the right to use the land for a specific and limited purpose Easements Appurtenant right to use a dominant parcel of land enjoys over an adjacent serviant parcel Negative easement doesn t allow gov to make rule prevent people from using right as neighbor Easement in Gross right to use land unrelated to another parcel across only serviant parcels city Restrictive Covenant Deed restrictions covenants that impose restrictions on land use created at conveyance of land to a new owner enforce HOA and individual human in the sub division Restrictions in a deed conveying a single parcel of land to a new owner Restrictions imposed on an entire subdivision at its creation Liens An interest in property as security for an obligation General Liens Arise from events unrelated to the property EX court awarded damages judgment lien car accident Property tax or assessment liens get paid first Co Ownership a house with multiple owners Tenancy in common multiple owners of same fee simple interest bad form for a business Joint tenancy right of survivorship Tenancy by the Entirety joint tenancy for husband and wife one cant do without the other can be for other properties good Condominium Combines single ownership and tenancy in common should have liability insurance Cooperative Co op Each owner holds shares don t own room board can deny anyone subject to coop bylaws Elective Share surviving spouse receives up to one third of all decedents personal property Can keep thing separate cant use paycheck not separate anymore Pre postnups divide property and alimony trump elective share electric share trumps will o o o o o o o o o o Community Property Always Half Timeshare Industry with questionable history developer receives profit if profitable developer maintains it for a fee fee gradually increases overtime Chapter 3 10Questions Deed A special written contract for conveying a permanent interest in real property must be in writing Fee Simple absolute Life Estate Conditional Fee Easement Grantor person or entity conveying real property must be legal age competent must sign deed Grantee recipient of real property only need to be identifiable Recital of consideration minimal statement required for anything of value Covenants legally binding promises Covenant of seizing grantor has good title and right to convey it Covenant against encumbrances No encumbrances except as noted in deed liens easements Covenant of quiet enjoyment No one with a better claim to title Descriptions three methods acceptable for public records o Metes and bounds oldest most flexible most difficult form o o o Plat lot and block number Government rectangular survey Unacceptable descriptions include street address and tax parcel number Acknowledgement and Delivery have to have delivery verifiable intent that deed is to be given to grantor Types of Deeds General Warranty Deed All three Covenants best Special warranty Deed All three covenants except no encumbrances limited to grantors ownership Deed of bargain and sale No covenants maybe a lien holder must do research Quitclaim Deed No Covenants if grantor has interest take it up used all of the time Public Records Notice and Real Property Conveyance Doctrine of constructive notice Cannot be bound by what you cannot know knew or not it is recorded Statute of Frauds Contract must be in writing to be enforced Actual Notice Open continuous actual possession of property hear or read Title Collection or evidence indicating a particular person as holder of the fee Chain of title the sequence of conveyances passing ownership down through time searching the title Chapter 4 10Questions Traditional land use controls Zoning Residential commercial industrial automotive Setback Requirements how far back how wide Special Use districts Service stations hospitals churches private schools cemeteries Subdivision regulations City may take over made roads if built to standard hard to do expensive If no city regulation must have owner Association Board of Adjustment Reviews petitions for variances Zoning Issues and Concepts Nonconforming use Use inconsistent with and precedent to zoning map Variance Exception to requirements due to hardship Exclusionary zoning NO POOR zoning Slight variance Notify Slight change in way it s being used set back maybe farther up at one spot because of a bump o o o o o o o o o o o o o o o o o o o o o o o o Newer Approaches to Land Use Control Planned unit development doesn t fit one zoning More New land use controls Impact Fees you build you pay money Eminent Domain right of government to aquire private land without the owners consent for public use with due process and just compensation Condemnation Legal procedure for exercising the right of eminent domain Environmental Controls Laws impact availability to develop Environmental Assessments If you buy property that is contaminated under superfund it is your job to clean it up Do the phase and you potentially avoid liability Phase 1 Sample Phase 2 How Much Phase 3 Clean up Property Taxes Computing Tax Liability Primary source of local government revenue