Real Estate Finance Midterm Review

Topics: Real estate, Real property, Life estate Pages: 3 (484 words) Published: March 14, 2013
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
oSurface rights-Right to use the surface of the earth
oSubsurface rights-Right to natural resources lying below surface oAir rights-Right to air space
To the technologically feasible height to erect structures Level where airspace is reserved for air traffic
oRiparian 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
oLittoral 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.

oRights of ownership
oBundle of Sticks
oIndividual sticks – symbolic of rights
oCan 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 wife has...
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