Basic Principles of Real Estate Section.
Let's go over some basic principles that will come up in your exam.
Property is accompanied with the bundle of rights.
The bundle of rights are rights inherent in ownership of property.
The bundle of rights includes the right to use, to sell, to mortgage, to lease,
to enter, and to give away, or the right to refuse to exercise any of these rights.
This is all subject to certain limitations.
Property can be divided into two categories:
real property and
personal property.
Real property is land. All things attached to the land and all rights inherent with that land. As a general rule,
real property are things that are immovable.
Personal property are generally things that are movable, such as a chair.
Severance is changing an item from real property to personal property by detaching it from the land.
Annexation is the addition to property by the act of attaching a smaller item to the larger property,
As in attaching personal property to real property,
thereby creating a fixture. For example, a sink becomes a fixture when it is
annexed to the plumbing outlet.
Appurtenance is something belonging to something else.
Either attached or not, such as a barn to a house or an easement to land.
The appurtenance is part of the property and passes with it upon sale or other transfer.
A fixture is personal property that becomes real property when attached in a permanent manner to real estate and is incorporated
into the land.
An example of a fixture would be a chandelier, as it is an item that was movable, but now is attached to the property.
Saying that real property is immovable and personal property is movable is a general rule.
Another way to help you remember what is real
and what is personal is to keep in mind that personal property goes with the person and real property
goes with the real estate.
A trade fixture is a fixture that is used in the operation of a business.
Trade fixtures remain the tenants property hence they are
personal property. For example, the dentist's chair would be a trade
fixture, as the chair is being used for the dentist's business.
Even though it is attached to the property, the dentist will take that chair with him when he moves to a different location.
Emblements are annual crops
produced by cultivation
legally belonging to the tenant with the implied right for its harvest and are treated as the tenants property.
This comes into play in the law of landlord and tenant or in the foreclosure of
mortgages and other legal
situations that place the rights of another party in contention with those of a farmer who has planted a crop yet to be
harvested. In these situations, the doctrine of emblements
operates to guarantee the farmers right to reap and carry away the fruits of his labor even if he loses
title to the land on which they are grown.
Let's talk about the OREE rule.
You will hear words like grantor, grantee,
lessor, lessee, vendor, vendee, optionor, optionee, trustor, trustee,
mortgagor,
mortgagee, offeror, offeree, and the list can go on.
The gist of it is the "or" is the giver and the "e"
receives.
Say this to yourself over and over again.
Grantor, lessor, optionor, vendor, makes me the givor of the propetor for your pleasure.
So if you see words like give, convey, sell, that is an or.
Now say grantee, lessee, optionee,
vendee, gives me
property,
which makes me happy. So if you see words like
receive, purchase, acquire, you know it is an "e". It may seem silly,
but when you are taking your exam, and you see a question that you do not understand,
but you know one party is giving something and the other party is receiving something you will be thrilled. For example, a
vendor sells to a vendee. The grantor conveys property to a grantee, who receives it. If
they ask who conveys property and you see an option that says
grantor and another option is a grantee,
you may not know anything about deeds, but you know the answer is grantor, because "or" is the conveyor.
This concludes the section on basic principles of real estate.