Bundle of Rights

There are various rights or interest relating to property ownership that can show up on your real estate exam


A right is something due to a person by claim or legal guarantee, an interests is a legal share or privilege.


Property ownership is subject to the rights or interest of others.


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.

The bundle of rights is a common way to explain the complexities of real estate ownership.

The bundle of rights is commonly taught to explain how real estate can simultaneously be "owned" by more then one party.

Ownership of land is a much more complex proposition than simply acquiring all the rights to it. It is useful to imagine a bundle of rights that can be separated and reassembled. A "Bundle of Straws" - in which each straw represents an individual right - is a common analogy made for the bundle of rights. Any property owner possesses a set of straws related directly to the land.

For example, completion of a mechanic’s lien takes some, but not all, rights out of the bundle held by the owner. Extinguishing that lien returns those rights or "sticks" to the bundle held by the owner. In the United States (and under common law) the fullest possible title to real estate is called “fee simple absolute." Even the US federal government's ownership of land is restricted in some ways by state property law.

In other words, there is always some form of an encumbrance on property.


License

Non-possessory interests in land include profits, water rights and easements.


A license is a personal privilege to use the land of another.  A license is not considered a true interest in the land because it is revocable at any time, and would not transfer with title.


Examples of a license would include parking your car in a parking garage or your ticket to the movie theater


A license can be created with an oral agreement such as giving someone permission to fish in your lake.


Water Rights

No one has title to water.  Property owners whose land adjoins bodies of water have reasonable right to the use of the water


Riparian rights allow a property owner to use water from water course such as a river stream or creek.


Littoral rights concern properties abutting an ocean, sea or lake rather than a river or stream. Littoral rights are usually concerned with the use and enjoyment of the shore.


Correlative use allows a property owner the use of underground water.  Or water from a river for irrigation purposes.


In states where water is scarce the doctrine of prior appropriation determines the use of the water.


Under this doctrine the use of the water is determine by the state.  Not the owner whose property is adjacent to the body of water.


Accretion occurs when soil is deposited by the natural action of water.

And may increase the size of the property


When water recedes new land is acquired by reliction.


Erosion is the wearing away of land or soil by the action of wind, water, currents or ice.


Sudden tearing away of land by violent action of natural causes such as a river or other watercourse is called avulsion.  A damn breaking or an earthquake is an example of avulsion.

Introduction

Bundle of Rights  

License   

Government Rights  

Police Power   

Eminent domain   

Taxation   

Escheat   

Real vs Personal Property

Annexation   

Appurtenances   

Fixtures   

Trade Fixture   

Emblements   

    OR-EE Rule   

Estates

Freehold Estate   

Fee simple absolute   

Fee simple Defeasible   

Life estate   

Less than freehold estate   

Estate for Years   

Periodic Tenancy   

Estate at will   

Estate in sufferance   

Types of Leases   

Gross lease   

Net lease   

Percentage lease   

Lease option   

Property management

Contracts

Essentials of a valid contract   

Capable parties  

Lawful object   

Consideration   

Offer and acceptance   

Types of Contracts   

Valid, Void & Voidable Contracts   

Implied contract   

Bilateral & Unilateral contacts   

Executed & Executory   

Option contract   

Land Contract   

Listings   

Types of Listings contracts   

Exclusive Listing   

Exclusive Authorization and right to sell Listing   

Exclusive Agency Listing   

Open Listing   

Net Listing   

Listings with an option   

Multiple listing service   

Agency   

Universal agent   

General agent   

Special agent   

Attorney in fact   

Principal and Client   

Transaction broker   

Dual or limited agency   

Practice and disclosure   

Stigmatized property   

Puffing   

Fraud   

Actual fraud   

Negative fraud   

Constructive fraud   

Negligence   

Federal Law   

Truth in Lending   

Fair Housing   

Steering   

Blockbusting   

Sherman antitrust laws   

Easement   

Easement in gross   

Implied easement   

Prescriptive easement   

Termination of Easement   

Encroachment   

Zoning

Property Transfer

    Deeds   

    Wills   

Title   

Title insurance   

Forms of ownership   

Tenancy in common   

Joint tenancy   

Community property   

Trust   

Subdivisions   

Condominium   

Cooperative   

Time Shares   

Cluster housing   

Liens   

Appraisal   

Appraisal Principles   

Principle of Highest and Best Use   

Principle of Substitution   

Principle of Conformity   

Principle of Contribution   

Principle of change   

Market Value   

Steps in the appraisal   

Appraisal methodology   

Market data approach   

Capitalization (income) Approach   

Cap Rate   

Cost (replacement) approach   

Gross Rent Multipliers   

Depreciation   

Physical Deterioration   

Functional Obsolescence   

Economic Obsolescence   

Financing   

Lenders   

Primary mortgage   

FHA   

VA   

Types of Loans   

Loans clauses   

Investing   

Construction Terms   

Test Taking Tips