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Universities » Temple University (Temple) » RL EST - Real Estate » 3501 - REAL ESTATE FUNDAMENTALS » Flash Cards

Midterm Review - Flashcards

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Class:RL EST 3501 - REAL ESTATE FUNDAMENTALS
Subject:Real Estate
University:Temple University
Term:Spring 2010
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Personal Property Personal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate.
Real Property/chatel The rights interest and benefits in real estate ownership
Real Estate Land and everything attached to the land
3 types/sections of land Air, surface and subsurface. Vertical lease, ground lease and sub-surface lease.
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Fixture Personal property converted to real property by being permanently affixed to the land. Ex: microwave attached to wall vs microwave on kitchen counter
4 questions to decide if personal or Real Property how is it attached? Can you remove without causing damage How is it used/adapted? Customized for your unit? What is the understanding of the parties? Transfer of real property must be in writing. What is relationship of parties? In landlord/tenant, fixtures stay and personals go. Trade fixtures go with tenant if a business.
Formal vs Informal land description Formal- Accepted by the court Informal- Address, name, etc. Read it and locate it
Metes & Bounds Metes is in distance (feet). Bounds is direction (degrees, min. seconds)
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Monument Fixed or artificial starting point for your land description. Must start and end here.
POB - Point of Begining
POB - Point of Beginning Where survey starts and ends
Benchmarks Permanent reference mark used to measure a difference in elevation.
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Rectangular Survey System aka Gov't survey system Meridians and base lines. Meridian=longitude(N-S).. Baselines=latitude(E-W). Established by federal gov't.
Plat or recorded survey Map of town section or subdivision. locates boundaries of individual properties
Tax accessor's parcel number Tax accessor assigns a number to each parcel of land to aid in tax collection purposes. When on a plat it is underlined or circled.
How many feet in an Acre 43,560 ft. squared.
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Physical Characteristics of land Immovable, indestructable (it's always there), nonhomogenous (no 2 pieces of property are alike)
Economic Characteristics of land a) scarce, b) modified (positive or negative), c)performance of investment (fixity), d) location (situs)- preference
Feudal System Owned by King/gov't. Lets tenant live there without a right of ownership. Can subdivide property with his subjects.
Allodial System Individuals have rights of ownership. Gov't gives off land to settlers.
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4 Rights rettained by gov't 1) Taxation 2) Escheat 3) Police Power 4) Eminent Domain TERE Rights
Right to Tax Charge on Real estate to raise funds to meet public needs of gov't.
Escheat When you have property reverting to the state if the owner dies without a will or heirs. 1st goes to will, 2nd to heirs, 3rd to state.
Police Power Power vested in the state to establish laws to preserve order, protect the public health and safety and to promote the general welfare. Regulations on property. No compensation on police power. No actual taking(thats eminent domain)
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Eminent domain Property taken must receive just compensation. Gov'ts power to acquire privately owned property for private use
Ways to acquire private property through eminent domain 1) Negotiations 2) Condemnation proceeding (court/litigation)
3 part test in order to be successful in condemnation proceedings 1) proposed use must be a public use 2) Just compensation be paid 3) And provide ownership with due process
Just compensation Fair market value of property. Damages. Compensatory damages, amount of $ to compensate the owner
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Due Process Notice. Opportunity to be heard. Must be before an impartial tribunal.
Inverse Condemnation Inverse condemnation is a term used in the law to describe a situation in which the government takes private property but fails to pay the just compensation required by the Constitution. Property owner is seeking money from gov't since usefulness of land was taken. Most radical
Consequential Damages If gov't recognizes some of the usefulness is gone but the property is still valuable. Low amount to recognize some of usefulness is gone.
Compensatory damages Compensate for actual loss of property
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Severance Damages Payment to an owner for diminution in the value of a remainder area in a partial acquisition, caused by the acquisition (severance) or by construction of improvements.
3 Types of Estates Freehold, statutory and leasehold
Freehold Estate A fee simple (or fee simple absolute) is an estate in land, a form of freehold ownership. Estate of uncertain duration. Right to own and possess.
Statutory Estate Estate established by law
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Leasehold Estate A leasehold estate is an ownership interest in land in which a lessee or a tenant holds real property by some form of title from a lessor or landlord. Fixed duration, specified time frame. Right of possession but no ownership
Police power vs deed restrictions deed restrictions are put on by property owners. Police power is through legislation
Dower and Curtesy Dower is wife's life estate and deceased husband's property Curtesy is husbands rights and deceased wife's property. Gives right to live in property during their life
Homestead Land owned/operated as family home may be exempt in certain circumstances. Purpose is to protect home
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community project Gives equal interest to each spouse to property acquired during the marraige
Fee Estate vs Fee Simple Fee Estate- Largest estate one can have. Complete ownership. Fee Simple- All rights except for gov't rights. Gov't regulations. Largest form of ownership in the US since US puts regulations on property
Ordinary Life Estate Interest in land is dependent upon someones life. For example A owns a house and gives it to B fee simple for B's life. When B dies it reverts to A or C. Way of avoiding inheritance tax
Life Estate Pur Au Tre Vie Life estate for life of another. A gives to B as long as C shall live. Then reverts to A or remainder interest to D. son brother example. you always want your son to have somewhere to live.
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4 types of leasehold estates 1)Estate for years or term estate. 2) Periodic estate. 3) Estate at will. 4)Estate at sufferance.
Estate for years Estate that continues for a definite amount of time. Landlord/tenant(for specified amount of time) , hotel
Periodic Estate Estate that goes from period to period and renews automatically for that amount of time. Monthly/yearly lease that auto renews every month.
Estate at Will Tenant has right to possess at landlord's consent for undesignated time frame. Terminated by either party at any time.
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Estate at Sufferance Tenant stays beyond his legal right to stay without consent of landlord. "Holdover Tenant"- Not a trespasser since trespassers never had a right to be there.
Lease A lease is a contract conferring a right from one person (called a tenant or ) to possess property belonging to another person. Gives up right to possess.
5 ways of setting rent 1) gross lease, 2) Net lease, 3) Graduated or step up, 4) Escalted lease/participation, 5) Percent lease
Gross lease In a gross lease, the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership.
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Net Lease usually In commercial real estate, a net lease requires the tenant to pay, in addition to rent, some or all of the property expenses which normally would be paid by the property owner (known as the "landlord" or "lessor").
Graduated or a Step up Predetermined rental increase over length of lease. Usually in leases over 1 year.
Escalated lease/participation Tenant pays % increase in property tax, utilities etc.
Percent Lease Tenant pays landlord a percent of their gross receipts. Example: a farmer paying landlord
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Security deposit
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 Personal PropertyPersonal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate.
 Real Property/chatelThe rights interest and benefits in real estate ownership
 Real EstateLand and everything attached to the land
 3 types/sections of landAir, surface and subsurface. Vertical lease, ground lease and sub-surface lease.
 FixturePersonal property converted to real property by being permanently affixed to the land. Ex: microwave attached to wall vs microwave on kitchen counter
 4 questions to decide if personal or Real Propertyhow is it attached? Can you remove without causing damage
How is it used/adapted? Customized for your unit?
What is the understanding of the parties? Transfer of real property must be in writing.
What is relationship of parties? In landlord/tenant, fixtures stay and personals go. Trade fixtures go with tenant if a business.
 Formal vs Informal land descriptionFormal- Accepted by the court

Informal- Address, name, etc. Read it and locate it
 Metes & BoundsMetes is in distance (feet).
Bounds is direction (degrees, min. seconds)
 MonumentFixed or artificial starting point for your land description. Must start and end here.
 POB - Point of Begining 
 POB - Point of BeginningWhere survey starts and ends
 BenchmarksPermanent reference mark used to measure a difference in elevation.
 Rectangular Survey System aka Gov't survey systemMeridians and base lines. Meridian=longitude(N-S)..
Baselines=latitude(E-W). Established by federal gov't.
 Plat or recorded surveyMap of town section or subdivision. locates boundaries of individual properties
 Tax accessor's parcel numberTax accessor assigns a number to each parcel of land to aid in tax collection purposes. When on a plat it is underlined or circled.
 How many feet in an Acre43,560 ft. squared.
 Physical Characteristics of landImmovable, indestructable (it's always there), nonhomogenous (no 2 pieces of property are alike)
 Economic Characteristics of landa) scarce, b) modified (positive or negative), c)performance of investment (fixity), d) location (situs)- preference
 Feudal SystemOwned by King/gov't. Lets tenant live there without a right of ownership. Can subdivide property with his subjects.
 Allodial SystemIndividuals have rights of ownership. Gov't gives off land to settlers.
 4 Rights rettained by gov't1) Taxation
2) Escheat
3) Police Power
4) Eminent Domain

TERE Rights
 Right to TaxCharge on Real estate to raise funds to meet public needs of gov't.
 EscheatWhen you have property reverting to the state if the owner dies without a will or heirs. 1st goes to will, 2nd to heirs, 3rd to state.
 Police PowerPower vested in the state to establish laws to preserve order, protect the public health and safety and to promote the general welfare. Regulations on property. No compensation on police power. No actual taking(thats eminent domain)
 Eminent domainProperty taken must receive just compensation. Gov'ts power to acquire privately owned property for private use
 Ways to acquire private property through eminent domain1) Negotiations
2) Condemnation proceeding (court/litigation)
 3 part test in order to be successful in condemnation proceedings1) proposed use must be a public use
2) Just compensation be paid
3) And provide ownership with due process
 Just compensationFair market value of property. Damages. Compensatory damages, amount of $ to compensate the owner
 Due ProcessNotice. Opportunity to be heard. Must be before an impartial tribunal.
 Inverse CondemnationInverse condemnation is a term used in the law to describe a situation in which the government takes private property but fails to pay the just compensation required by the Constitution.
Property owner is seeking money from gov't since usefulness of land was taken. Most radical
 Consequential DamagesIf gov't recognizes some of the usefulness is gone but the property is still valuable. Low amount to recognize some of usefulness is gone.
 Compensatory damagesCompensate for actual loss of property
 Severance DamagesPayment to an owner for diminution in the value of a remainder area in a partial acquisition, caused by the acquisition (severance) or by construction of improvements.
 3 Types of EstatesFreehold, statutory and leasehold
 Freehold EstateA fee simple (or fee simple absolute) is an estate in land, a form of freehold ownership. Estate of uncertain duration. Right to own and possess.
 Statutory EstateEstate established by law
 Leasehold EstateA leasehold estate is an ownership interest in land in which a lessee or a tenant holds real property by some form of title from a lessor or landlord. Fixed duration, specified time frame. Right of possession but no ownership
 Police power vs deed restrictionsdeed restrictions are put on by property owners. Police power is through legislation
 Dower and CurtesyDower is wife's life estate and deceased husband's property
Curtesy is husbands rights and deceased wife's property. Gives right to live in property during their life
 HomesteadLand owned/operated as family home may be exempt in certain circumstances. Purpose is to protect home
 community projectGives equal interest to each spouse to property acquired during the marraige
 Fee Estate vs Fee SimpleFee Estate- Largest estate one can have. Complete ownership.
Fee Simple- All rights except for gov't rights. Gov't regulations. Largest form of ownership in the US since US puts regulations on property
 Ordinary Life EstateInterest in land is dependent upon someones life. For example A owns a house and gives it to B fee simple for B's life. When B dies it reverts to A or C. Way of avoiding inheritance tax
 Life Estate Pur Au Tre VieLife estate for life of another. A gives to B as long as C shall live. Then reverts to A or remainder interest to D. son brother example. you always want your son to have somewhere to live.
 4 types of leasehold estates1)Estate for years or term estate. 2) Periodic estate. 3) Estate at will. 4)Estate at sufferance.
 Estate for yearsEstate that continues for a definite amount of time. Landlord/tenant(for specified amount of time) , hotel
 Periodic EstateEstate that goes from period to period and renews automatically for that amount of time. Monthly/yearly lease that auto renews every month.
 Estate at WillTenant has right to possess at landlord's consent for undesignated time frame. Terminated by either party at any time.
 Estate at Sufferance Tenant stays beyond his legal right to stay without consent of landlord. "Holdover Tenant"- Not a trespasser since trespassers never had a right to be there.
 LeaseA lease is a contract conferring a right from one person (called a tenant or ) to possess property belonging to another person. Gives up right to possess.
 5 ways of setting rent1) gross lease, 2) Net lease, 3) Graduated or step up, 4) Escalted lease/participation, 5) Percent lease
 Gross leaseIn a gross lease, the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership.
 Net Leaseusually In commercial real estate, a net lease requires the tenant to pay, in addition to rent, some or all of the property expenses which normally would be paid by the property owner (known as the "landlord" or "lessor").
 Graduated or a Step upPredetermined rental increase over length of lease. Usually in leases over 1 year.
 Escalated lease/participationTenant pays % increase in property tax, utilities etc.
 Percent LeaseTenant pays landlord a percent of their gross receipts. Example: a farmer paying landlord
 Security deposit 
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