Real Estate Finance Midterm Review
Midterm Review
Ch 2.
-What is Real Estate? Land at, above and below the earth’s surface, plus all things permanently attached to it
-Bundle of Rights
• legal rights
1. right of exclusive possession
2. right of enjoy,ent
3. right of disposition
• physical rights o Surface rights-Right to use the surface of the earth o Subsurface rights-Right to natural resources lying below surface o Air rights-Right to air space
To the technologically feasible height to erect structures
Level where airspace is reserved for air traffic o Riparian rights
Granted to owners of land along the course of a river, stream or similar body of flowing water (non-navigable/navigable)
Each land owner has equal rights to use the water, as long as they don’t interfere with the rights of others o Littoral Rights
Rights of owners whose land borders commercially navigable lakes, sea and oceans.
Owners enjoy use of water
Own land adjacent to the water up to the average high water mark.
o Rights of ownership o Bundle of Sticks o Individual sticks – symbolic of rights o Can be separated and individually transferred
-Personal Vs. Real Property
Real: rights in land and its permanent structures
Personal: rights in all other property ex: wall-to- wall carpet not permanently attatched
-Freehold Estates/non-freehold estates (non-leaseholds)
Freehold estates of inheritance :
1. fee simple absolute
2. fee simple subject to a condition: trigger event may cause ownership to revert
3. determinable fee: possibility of reverter; if “as long as” condition is not satisfied, all physical rights and legal rights revert immediately to the previous owner length of time
Freehold estates not of inheritance:
- ordinary life estate with remainder interest (no right of disposition).
- pur autre vie
Ex. Hank can live in Lisa’s second house unil hank’s father passes away
- legal life estate homestead (protects home equity)
- dower (life estate that a
Ch 2.
-What is Real Estate? Land at, above and below the earth’s surface, plus all things permanently attached to it
-Bundle of Rights
• legal rights
1. right of exclusive possession
2. right of enjoy,ent
3. right of disposition
• physical rights o Surface rights-Right to use the surface of the earth o Subsurface rights-Right to natural resources lying below surface o Air rights-Right to air space
To the technologically feasible height to erect structures
Level where airspace is reserved for air traffic o Riparian rights
Granted to owners of land along the course of a river, stream or similar body of flowing water (non-navigable/navigable)
Each land owner has equal rights to use the water, as long as they don’t interfere with the rights of others o Littoral Rights
Rights of owners whose land borders commercially navigable lakes, sea and oceans.
Owners enjoy use of water
Own land adjacent to the water up to the average high water mark.
o Rights of ownership o Bundle of Sticks o Individual sticks – symbolic of rights o Can be separated and individually transferred
-Personal Vs. Real Property
Real: rights in land and its permanent structures
Personal: rights in all other property ex: wall-to- wall carpet not permanently attatched
-Freehold Estates/non-freehold estates (non-leaseholds)
Freehold estates of inheritance :
1. fee simple absolute
2. fee simple subject to a condition: trigger event may cause ownership to revert
3. determinable fee: possibility of reverter; if “as long as” condition is not satisfied, all physical rights and legal rights revert immediately to the previous owner length of time
Freehold estates not of inheritance:
- ordinary life estate with remainder interest (no right of disposition).
- pur autre vie
Ex. Hank can live in Lisa’s second house unil hank’s father passes away
- legal life estate homestead (protects home equity)
- dower (life estate that a