Real property


In English common law, real property, real estate, immovable property or realty, refers to parcels of land and any associated structures which are the property of a person. For a structure to be considered part of the real property, it must be integrated with or affixed to the land. This includes crops, buildings, machinery, wells, dams, ponds, mines, canals, and roads. The term is historic, arising from the now-discontinued form of action, which distinguished between real property disputes and personal property disputes. Personal property, or personalty, was, and continues to be, all property that is not real property.
In countries with personal ownership of real property, civil law protects the status of real property in real-estate markets, where estate agents work in the market of buying and selling real estate. Scottish civil law calls real property heritable property, and in French-based law, it is called immobilier.

Historical background

The word "real" derives from Latin res. Under European civil law, a lawsuit that seeks official recognition of a property right is known as an actio in rem. This contrasts with an actio in personam in which the plaintiff seeks relief for the actions of a particular person. The distinction can be subtle; the medieval action of novel disseisin, although aimed at repossessing land, was not an actio in rem because it claimed dispossession without leave rather than rightful possession.
Henry de Bracton's Treatise on the Laws and Customs of England is credited with giving "real property" its particular meaning in English law. After discussing the distinction in civil law, Bracton proposed that actions for movable property were inherently actions for relief, and that therefore an actio in rem could be brought only upon immovable property. This view is not accepted in continental civil law, but can be understood in the context of legal developments during Bracton's lifetime. In thirteenth-century England the courts of canon law claimed broad authority to interpret wills, but inheritance of land remained a matter for the royal courts. Laws governing the conveyance of land and that of movable personal property then developed along different paths.
In modern legal systems derived from English common law, the classification of property as real or personal may vary somewhat according to jurisdiction or, even within jurisdictions, according to purpose, as in defining whether and how the property may be taxed. Houseboats, for example, occupy a grey area between personal and real property, and may be treated as either according to jurisdiction or circumstance. Bethell contains much information on the historical evolution of real property and property rights.

Characteristics of real property

Immobility

Real property is immobile. Owners cannot move their land to a better location, such as another city, for sale. Thus the fixed location of a parcel of land directly affects, and is a major determinant of, its value.
However, products of the land, such as minerals and crops, can be transported.

Externalities

Changes that take place nearby will directly affect the real property's value. Real property is vulnerable to externalities due to its immobile nature. External factors outside of the real property will affect the value of the real property, for example, the noises that neighbouring people and construction sites produce.

Development

A location of desired resources will draw attention to the location. Natural locational attractions include water supply, climate, soil fertility, water frontage, and mineral deposits. As the area develops revolving around such natural resources, these developments become components to look for when determining land use and real property values. The surrounding development and proximity, such as markets and transportation routes, will also determine the value of the real property.

Supply of urban land

Although the overall amount of land is fixed, the supply of specifically urban land may vary. Sometimes urban land is created from previously agricultural land. Usually urban land is more valuable than agricultural land; this creates the incentive to convert non-urban land to urban land. The value of the land is directly associated with its use. Zoning regulations regarding multi-story development are modified to intensify the use of cities, instead of occupying more physical space.

Identification of real property

To be of any value, a claim to any property must be accompanied by a verifiable and legal property description. Such a description usually makes use of natural or man-made boundaries such as seacoasts, rivers, streams, the crests of ridges, lakeshores, highways, roads, and railway tracks or purpose-built markers such as cairns, surveyor's posts, iron pins or pipes, concrete monuments, fences, official government surveying marks, and so forth. In many cases, a description refers to one or more lots on a plat, a map of property boundaries kept in public records.
These legal descriptions are usually described in two different ways – metes and bounds, and lot and block. A third way is the Public Land Survey System, as used in the United States.
  • Metes. The term "metes" refers to a boundary defined by the measurement of each straight run, specified by a distance between the terminal points, and orientation or direction. A direction may be a simple compass bearing, or a more precise orientation determined by accurate survey methods.
  • Bounds. The term "bounds" refers to a more general boundary description, the abuttals and boundaries, such as along a certain watercourse, a stone wall, an adjoining public roadway, an adjoining property owner, or an existing building. The system is often used to define larger pieces of property, and political subdivisions where the precise definition is not required or would be far too expensive, or previously designated boundaries can be incorporated into the description.
  • The lot and block system is perhaps the simplest of the three main survey systems to understand. For a legal description in the lot and block system a description must identify:
  • * the individual lot,
  • * the block in which the lot is located, if applicable,
  • * a reference to a platted subdivision or a phase thereof,
  • * a reference to find the cited plat map, and
  • * a description of the map's place of official recording.
  • File:Meridians-baselines.png|alt=Principal meridians and Baselines governing the United States Public Land Survey System.|thumb|Principal meridians and Baselines governing the United States Public Land Survey SystemThe Public Land Survey System is the surveying method developed and used in the United States to divide real property for sale and settling. The PLSS used nominally rectangular shapes to divide. The basic unit in the PLSS is the Section of land, typically 1-mile square. A 6 x 6-mile grid of sections of landform is what is referred to as a Township. Townships are laid out east and west of a Principal meridian, and north and south of a Baseline.

    Estates and ownership interests defined

The law recognizes different sorts of interests called estates, in real property. The type of estate is usually determined by the language of the deed, lease, bill of sale, will, land grant, etc., through which the estate was acquired. Estates are distinguished by the varying property rights that vest in each and determine the duration and transferability of the various estates. A party enjoying an estate is called a "tenant".
Some important types of estates in the land include:
  • Fee simple: An estate of indefinite duration that can be freely transferred. The most common and perhaps most absolute type of estate, under which the tenant enjoys the greatest discretion over the disposal of the property.
  • Fee simple conditional: An estate lasting forever as long as one or more conditions stipulated by the deed's grantor does not occur. If such a condition does occur, the property reverts to the grantor, or a remainder interest is passed on to a third party.
  • Fee tail: An estate which, upon the death of the tenant, is transferred to his or her heirs.
  • Life estate: An estate lasting for the natural life of the grantee, called a "life tenant". If a life estate can be sold, a sale does not change its duration, which is limited by the natural life of the original grantee.
  • A life estate per autre vie is held by one person for the natural life of another person. Such an estate may arise if the original life tenant sells her life estate to another, or if the life estate is originally granted per autre vie.
  • Leasehold: An estate of limited term, as set out in a contract, called a lease, between the party granted the leasehold, called the lessee, and another party, called the lessor, having a longer estate in the property. For example, an apartment-dweller with a one-year lease has a leasehold estate in her apartment. Lessees typically agree to pay a stated rent to the lessor. Though a leasehold relates to real property, the leasehold interest is historically classified as personal property.
A tenant enjoying an undivided estate in some property after the termination of some estate of limited term is said to have a "future interest". Two important types of future interests are:
  • Reversion: A reversion arises when a tenant grants an estate of a lesser maximum term than his own. Ownership of the land returns to the original tenant when the grantee's estate expires. The original tenant's future interest is a reversion.
  • Remainder: A remainder arises when a tenant with a fee simple grants someone a life estate or conditional fee simple, and specifies a third party to whom the land goes when the life estate ends or the condition occurs. The third party is said to have a remainder. The third-party may have a legal right to limit the life tenant's use of the land.
Estates may be held jointly as joint tenants with rights of survivorship or as tenants in common. The difference between these two types of joint ownership of an estate in land is basically the inheritability of the estate and the shares of interest that each tenant owns.
In a joint tenancy with rights of survivorship deed or JTWROS, the death of one tenant means that the surviving tenants become the sole owners of the estate. Nothing passes to the heirs of the deceased tenant. In some jurisdictions, the specific words "with right of survivorship" must be used, or the tenancy will assume to be tenants in common without rights of survivorship. The co-owners always take a JTWROS deed in equal shares, so each tenant must own an equal share of the property regardless of any contribution to the purchase price. If the property is someday sold or subdivided, the proceeds must be distributed equally with no credits given for any excess that any one co-owner may have contributed to purchase the property.
The death of a co-owner of tenants in common deed will have a heritable portion of the estate in proportion to his ownership interest which is presumed to be equal among all tenants unless otherwise stated in the transfer deed. However, if TIC property is sold or subdivided, in some States, Provinces, etc., a credit can be automatically made for unequal contributions to the purchase price.
Real property may be owned jointly with several tenants, through devices such as the condominium, housing cooperative, and building cooperative.