Essentials Of Business Law

Chapter 21

Real And Personal Property

McGraw-Hill/Irwin Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

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Types Of Property

Real property Land and everything attached to the land

• Minerals• Permanent additions to the land

Personal property Includes all property, other than real property Tangible

• Furniture, clothing, books

Intangible• Patents, copyrights, goodwill, trademarks, service marks

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Acquiring Title To Personal Property

Title is the actual ownership of property Can be transferred from one person to another

Finding lost personal property Finder has a legal responsibility to make reasonable

efforts to return the property

Abandoned property Title is transferred to the first person who takes

control over it

Accession The right of an owner of property to any increase in

the property

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Acquiring Title To Personal Property

Gifts The voluntary transfer of property by one person to

another without consideration or paymentThree requirements for gifts: The donor must intend to make a gift The gift must actually be delivered to the donee The donee must accept the gift

Inter vivos gift Property given while both parties are alive

Gift in causa mortis Property given by a living person who expects to die

from a known cause

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Ownership Of Property

Severalty ownership All the rights of ownership in a particular piece of

property are held by one person

Multiple ownership Joint tenancy

• Two or more persons own equal shares of property• Right of survivorship

Tenancy by the entirety• Joint ownership of property by husband and wife in which

both have the right to the entire property• Right of survivorship

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Ownership Of Property

Multiple ownership Tenancy in common

• Joint ownership of property by two or more persons

• Ownership interest of any one of the owners can be sold, transferred, or inherited

• Ownership is passed to that person’s heirs

Community property• Property acquired by either one of the spouses

during a marriage is belongs to both parties

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Real Property

Land Rights to land include:

• Airspace above the land• Minerals

Buildings Structure permanently placed or constructed on or

beneath the surface of the land

Fixtures Personal property added to land or to buildings so

that they become a part of the structure• Planted shrubbery, trees, satellite dishes

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Other Rights In Land

Subterranean rights The right to extract minerals

Air rights The right to build on or over the land

Easements A right or interest in land granted to a party to make

beneficial use of the land owned by another Cannot be sold or transferred once they are recorded

Licenses Granting a party the right to enter the land for a

specific purpose

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Ownership Interests InReal Property

Freehold estate A person owns the land either for life or forever Fee simple

• The owner of a freehold estate who holds it absolutely Life estate

• A person who holds a freehold estate only for his or her lifetime

Leasehold estate A person has an interest in real property that comes

from a lease Right of possession, but not ownership

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Transfer Of Real Property

Deed The instrument that conveys an interest in real

property between parties

Grantor The party who conveys real property

Grantee The party to whom the real property is conveyed

Consideration is not required in the transfer of real property

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Deeds

Quitclaim deed Transfers whatever interest a grantor has in real

property, if any Used to resolve questions of full title Do not warrant good title

Warranty deed Grantor asserts that he or she has title, and that the

property is free of the claims of othersBargain and sale deed States that grantor is transferring the real property to

the grantee No particular warranties are given

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Other Transfers Of Real Property

Eminent domain Real property is taken from an owner by action of

government for the benefit of the public Compensation is made at the fair market value

Adverse possession Title to land is acquired as a result of a person’s use

of land over a period of time Proof of actual and exclusive continuous possession Possession must have been open and known to the

owner, and with hostility and adversely