Real Estate
land at, above, and below the earth's surface, plus all things permanently attached to it, whether natural or artificial.
Personal Property
all the property that can be owned and that does not fit the definition of real property also called "chattels," moveable objects.
Real Property
includes both land and real estate, the interests, benefits and rights that are automatically included int he ownership of land and real estate. Includes the earth's surface, subsurface, airspace, including all things permanently attachedto it by nature o
Fixture
personal property that has been so affixed to land or building that, by law, it becomes part of the real property. (heating systems, elevator, kitchen cabinets, light fixtures, plumbing) Almost any item that has been added as a permanent part of the build
Legal test for a fixture
during the course of time the same materials may be both real and personal property, depending on their use and location. Did the person who installed the the item intend it to remain permanently on the property or to be removable in the future? Annexatio
Trade Fixture
An article owned by a tenant and attached to a rented space or building or used in conducting business. These fixtures must be removed on or before the last day the property is rented, if they are not removed they become real property of the landlord (acq
Fructus Naturales
Plants that do not require annual cultivation (tress and shrubbery) considered real estate, perennial crops such as orchards or vineyards, are not personal property and so transfer with the land
Fructus Industriales
Emblements, Fruits of industry, Considered personal property
Bundle of Legal Rights
the right of: possession, control, enjoyment, exclusion and disposition.
Physical Characteristics of Land
Immobility- the geographic location of any given parcel of land can never be changed. it is fixed, immobile.
Indestructibility-land itself is indestructible.
Uniqueness- no two parcels of property are exactly the same or in the same location, they are uni
Economic Characteristics of Land
Scarcity- the total supply of land is limited. Remaining land in a given location or of a particular quality is considered to be finite.
Improvements- building an improvement on a parcel of land can affect the land's value and use as well as that of neigh
Legal Property Descriptions
Metes and bounds, Rectangular geodesic survey (government), Lot block and subdivision (recorded plat).
Townships
are six miles square and contain 36 square miles.
Section
640 acres
Acre
43,560 square feet
Mile
5280 feet
Types of Liens
Voluntary - intentional
Involuntary - not a matter of choice, created by law
Statutory - created by statute (real estate tax)
Equitable - arises out of common law (court-ordered judgement)
General Liens
affect all the property, both real and personal, of a debtor.
(judgments, estate and inheritance taxes, corporate franchise taxes, and IRS taxes.
Specific Liens
are secured by specific property and affect only that particular property. (vendors and mechanics liens, mortgage liens, real estate tax liens, and special assessment and utilities.
Priority of Liens
in general, first to record, first in right. Varies from state to state. Real estate taxes and special assessments generally take priority over all other liens, regardless of the order they were recorded. Subordination agreement- permits junior lien-holde
Ad Valorem Tax
according to value
Mill
1/1000 of a dollar. $0.001, 32 mills=3.2percent
Easement
the right to use land of another for a particular purpose. The parcel over which the easement runs=servient tenement, the neighboring parcel that benefits=dominant tenement. Easements "run with the land" and transfers with the deed.
Easement in Gross
an individual or company interest in or right to use some one else's land. (rail road, pipeline, power lines)
Easement by Necessity
created when a owner sells a parcel of land that has no access to a street or public way except over the seller's remaining land.
Easement by Prescription
if a claimant has made use of anothers land for a certain period of time as defined by state law.
Licenses
personal privilege to enter the land of another for a specific purpose. It can be terminated or canceled. A license ends with the death of either party or with the sale of land.
Encroachments
when a building, fence or driveway illegally extends beyond the land of its owner or legal building line.
Tenancy in Common
each tenant holds a undivided fractional interest in the property. can sell, convey, mortgage, or transfer their individual interest without the consent of the other co-owner. When the co-owner dies, the tenant's undivided interest passes according to the
Joint Tenants
right of survivorship, upon the death of a joint tenant, the deceased's interest transfers directly to the surviving joint tenant, the last joint tenant owns the property in severalty. A joint tenant is free to convey interest in the jointly held property
Community Property
Husband and wife are equal partners in marriage. Real of personal property acquired during marriage is community property. Conveyance requires signature of both spouses. No right of survivorship; when one dies, survivor owns on-half of community property.
Trust
a device by which one person transfers ownership of property to some one else to hold or to manage for the benefit of a third party. Trustor- person who creates the trust, beneficiary- the person who benefits from the trust, trustee- the party who holds l
Leasehold Estate
A tenants right to posses right to possess real estate for the term of the lease. (less-than-freehold)
Estate for Years
Has a definite starting and ending date. Does not have to be a minimum of one year in length. Does not require notice by either side to terminate, the expiration date of the lease is set out in the lease and that's when it terminates. Any unexpired time o
Estate from Period to Period
This lease has a stated "initial period of time" which will automatically renew for the same period over and over again until the landlord or the tenant gives notice they don't want to renew. This lease is binding on the estates of the parties to the exte
Estate at Will
This lease is an "open ended lease, with no specified period. Notice is required to terminate this lease. Should the parties fail to specify the length of the notice period, the courts will require a "reasonable" notice be given.
Estate at Sufferance
This is the status of the parties where either the term of the years has expired and the tenant remains in possession; or, where the notice period has expired and the tenant remains in possession. In either case the tenant has no right to be there, and is
Property Taxes
There are two types of real estate taxes: general real estate taxes (called ad valorem taxes) and special assessments or improvement taxes. Real estate is valued by county assessors. The official valuation process is called assessment. A properties asses
Equalization
used to correct inequalities in statewide tax assessments, and is used to achieve uniformity. May be applied to raise of lower assessments in a particular district or county. The assessed value of each property in the area is multiplied by the equalizatio
Special Assessments
are taxes charged on real estate to fund public improvements to the property. For large-scale improvement projects such as streets, sidewalks, and water or sewer construction, a local improvement district (LID) may be created.
Police Power
preserve order, protect the public health and safety, and promote the general welfare of its citizens. passed on municipalities and counties through legislation called enabling acts. Also include regulations that govern the use, occupancy, size, location,
Eminent Domain
is the right of the government to acquire privately owned real estate for public use.
Condemnation
is the process by which the government exercises this right, (the actual taking process) by either judicial or administrative proceedings. Just compensation is to be paid to the owner.
Escheat
(revert) is a process by which the state may acquire privately owned real or personal property. State laws provide for ownership to transfer, or escheat, to the state when an owner dies and leaves no heirs and there is no living will of living trust instr
Comprehensive (Master) Plan
not a regulatory document, but rather a guide to planning for change rather than reacting to proposals. the plan is usually long term. Is regulates systematic planning for orderly growth and consists of the following basic elements: land use, housing need
Zoning
is a regulatory tool that helps communities regulate and control how land is used for the protection of public health, safety and welfare. affects: permitted use of parcel, lot sizes, types of structures, heights, setbacks, style and appearance, density,
Planned Unit Development (PUD)
land is set aside for mixed-use purposes, such as residential, commercial, and public use.
Buffer Zones
strip of land separating land dedicated to one use from another, used to ease transition form one use to another
Inverse Condemnation
property owner seekng just compensation for land taken for a public use where is appears that the taker of property does not intend to bring eminent domain proceedings. The property is condemned because its use and value have been dimised due to an adjace
Conditional-use permit (special-use)
allow nonconforming but related land uses (worship or daycare center in a residential district)
Variances
permit prohibited land uses to avoid undue hardship
Building Codes
enacted ordinances to specify construction standards that must be met when repairing or erecting buildings
Certificate of Occupancy
once the completed structure has been inspected and found satisfactory, the municipal inspector will issue a
Environmental Impact Report
this report details the impact the project will have on the environment. Includes information about air quality, noise, public health and safety, energy consumption, population density, wildlife, vegetation, and the need for sewer and water facilities. th
Riparian Rights
granted to owners of land along the course of a river or stream. Owners use cannot interrupt or alter the flow of the water or contaminate it in any way. If the water way is non-navigable the owner owns the property under the water to the half way point.
Littoral Rights
owners who land borders commercially navigable lakes seas, and oceans enjoy unrestricted use of available waters but own the land adjacent to the water only up the average high-water mark.
Deed Restrictions
private restrictions that can affect the use of the land. Once placed in the deed by a previous owner they "run with the land" limiting the use of the property and binding to all grantees.
Covenants, Conditions, and Restrictions (CC&R's)
are private agreements that affect land use. Developer's restrictions may be imposed through a covenant in the deed or by separate recorded declaration. Typically govern the type, height, and size of buildings that individual owners can erect as well as l
Home Owners Association
Made up of unit owners, may be governed by a board of directors or another official entity, and it may mange the property on its own or hire a property manager. The association is responsible for maintenance, repair, cleaning, and sanitation of the common
Cooperative Ownership
a corporation holds title to the land and the building. the corporation then offers shares of stock to prospective tenants. The purchaser becomes a shareholder in the corporation by virtue of stock ownership and receives a proprietary lease tot he apartme
Market Value
is an opinion of value based on analysis of data. the most probable price that a property should bring in a fair sale.
Market Price
is what the property actually sells for--its sale price
Principles of Value
DUST, DEMAND UTILITY SCARCITY TRANSFERABILITY,
Anticipation- value is created by the expectation that certain events will occur (property may be converted to commercial use soon) Change- no physical or economic condition remains constant (tornadoes, fire,
Highest and Best Use
The most profitable use of a property that is legal and feasible will bring the most money over time. The use must be: physically possible, legally permitted, economically or financially feasible, and the most profitable or maximally productive.
Plottage
merging or consolidating adjacent lots into a single larger one produces a greater total land value that the sum of the two sites valued separately. The process of merging two separately owned lots under one owner is know as assemblage.
Regression
the worth of a better quality property is adversely affected by the presence of a lesser quality property.
Progression
The value of a modest home would be higher if it were located among larger, fancier properties.
Substitution
maximum value of a property tends to be set by how much it would cost to purchase an equally desirable and valuable substitute property.
Supply and Demand
When supply increases, value decreases. When demand increases, value increases.
Factors Affecting Supply
Labor force, construction, and material cost
Governmental controls and financial policies- affects supply of loans
Factors Affecting Demand
Population
Demographics
Employment and Wage levels
Sales Comparison Approach (market data)
estimate of value obtained by comparing the property being appraised with rently sold comparable properties. The sales price of the comparables must be adjusted far any differences. Considered the most reliable approach in appraising single family homes.
The Cost Approach
based on the principle of substitution. Five steps: estimate the value of vacant land put to highest and best use, estimate current cost of construction buildings and improvements, estimate the amount of accrued depreciation, deduct the depreciation from
Reproduction Cost
is the construction cost at current prices of an exact duplicate of the subject improvements, including both the benefits and the drawbacks of the property.
Replacement Cost (New)
is the cost to construct an improvement similar to the subject property, using current construction methods and materials but not necessarily an exact duplicate. (most frequently used in appraising older structures