© 2010 by cengage learning chapter 3 ________________ rights and interests in land
TRANSCRIPT
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Chapter 3
________________ Rights and Interests in Land
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Exclusive Right to Use of LandFeudal SystemAllodial System
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The Fee Simple Bundle of Rights
Real estate ownership is, in actuality, the ownership of rights to land. The largest bundle available for private ownership is called “fee simple.”
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Real Estate as a Bundle of Property Rights• Property rights are what gives value to the real
estate.• Private property rights are subject to
limitations imposed by government. Thus, this can limit the value of the investment.
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Government Limitations
• The right of government to regulate private property for the protection of the general public’s health, morals, and welfare.
Police Power
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Government Limitations
Eminent Domain
• The right of government to take private property for public use upon payment of just compensation.
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Government Limitations
Taxation• The right of government to tax private property• Further discussion in Chapter 15.
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Government Limitations
Escheat• Ownership of property passes to the
government if there is no will or no heirs.
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Removing Sticks from the Fee Simple Bundle
Note that the fee simple bundle shrinks as an owner voluntarily removes rights from it.
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Control MortgageLeaseImpose covenants or conditionsGrant easementGrant licenseBuild or remove structures
Use & Enjoy Occupy as residenceUse as place of businessFarmMine/drill for oil, etc.Place of recreation
Exclusion Maintain privacyNon-trespass
Disposition Sell or refuse to sellGiveWillAbandon
Right or Benefit Stick in Bundle
Real Estate as a Bundle of Property Rights
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Commonly Found Easements
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Commonly Found Encroachments
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Other EstatesQualified Fee EstatesLife EstatesStatutory EstatesFreehold EstatesLeasehold Estates
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Rights and Interests in Land
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Cross Section of Estates and Rights in Land
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Cross Section of Estates and Rights in Land (continued)
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Checkpoint
In the absence of any other factors, which bundle of rights has a higher value?
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Key Terms Chattel Easement Eminent domain Encroachment
Encumbrance Estate Fee simple Lien Title