Modern Real Estate Practice in Pennsylvania 12 th

Modern Real Estate Practice in Pennsylvania 12 th Edition Chapter 1: Real Property and the Law 1

1 Real Property and the Law • Learning objectives – Identify the rights that convey with ownership of real property and the characteristics of real estate – Describe the difference between real and personal property – Explain the types of laws that affect real estate – Distinguish between the concepts of land, real estate, and real property – Define key terms © 2012 Kaplan, Inc. 2

1 Real Property and the Law • Land: the earth’s surface extending downward to the center of the earth and upward to infinity, including permanent natural objects • Real estate: land at, above, and below the earth’s surface, plus all things permanently attached to it, whether natural or artificial • Real property: the interests, benefits, and rights that are automatically included in the ownership of land real estate © 2012 Kaplan, Inc. 3

1 Real Property and the Law Air Rights Physical Improvements Surface Rights Subsurface Rights The Bundle of Rights Land Earth’s surface to the center of the earth and the airspace above the land, including the trees and water © 2012 Kaplan, Inc. Real Estate Land plus permanent human-made additions Real Property Real estate plus “bundle of legal rights” 4

1 Real Property and the Law Bundle of Legal Rights © 2012 Kaplan, Inc. 5

1 Real Property and the Law • Bundle of rights – Right – Right © 2012 Kaplan, Inc. of to of of of possession control the property enjoyment exclusion disposition 6

1 Real Property and the Law • Real property rights – Surface rights – Subsurface rights – Air rights – Water rights © 2012 Kaplan, Inc. 7

1 Real Property and the Law • Subsurface rights – Natural resources below earth’s surface – Multiple owners have interest in same parcel • • Coal owner Natural gas owner Farmhouse and stable owner Other rights © 2012 Kaplan, Inc. 8

1 Real Property and the Law • Mine subsidence – Downward land shifts – Due to collapse of underground mine shafts and underground water flows – Creates sinkholes or troughs – Damage • Functional • Cosmetic • Structural © 2012 Kaplan, Inc. 9

1 Real Property and the Law • Personal property (all property that does not fit the definition of real property) • Factory-built housing – Mobile homes – Manufactured homes © 2012 Kaplan, Inc. 10

In Pennsylvania: Manufactured Housing Manufactured Homes • Nonremoveable steel chassis • Minimum: 8 feet x 40 feet (320 square feet) • Capable of being lived in without a permanent foundation • Contains a red label indicating compliance with Department of Housing and Urban Development (HUD) standards © 2012 Kaplan, Inc. 11

In Pennsylvania • Real Estate Brokers may legally broker resale of mobile and manufactured homes if the following conditions exist: – “Land lease” assigned or land transferred – Mobile home permanently attached to foundation – Registration as vehicle cancelled © 2012 Kaplan, Inc. 12

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1 Real Property and the Law • Plants • Fixtures – Intent – Method of annexation – Adaptation to real estate – Agreement © 2012 Kaplan, Inc. 14

1 Real Property and the Law • Trade fixtures: owned and installed by tenant for business use – Are removable – Are personal property. – Are removed before the end of the lease • After lease termination, become property of landlord • Agriculture: personal property – Chicken coops – Tool sheds © 2012 Kaplan, Inc. 15

1 Real Property and the Law • Characteristics of real property – Economic characteristics • • Scarcity Improvements Permanence of investment Area preference or location – Physical characteristics • Immobility • Indestructibility • Uniqueness © 2012 Kaplan, Inc. 16

1 Real Property and the Law • Laws affecting real estate – Contract law – General property law – Agency law – Real estate license law – Federal regulations – Federal, state, and local tax laws – Zoning and land use laws – Federal, state, and local environmental regulations © 2012 Kaplan, Inc. 17