Chapter 1

Introduction to
Real Property Law
CHAPTER OBJECTIVES
Upon completion of this chapter, you will be able to:
• Identify the concept of property ownership.
• Understand the difference between real property and personal property.
• Discuss the methods of property ownership.
• Identify the sources of real property law.
Throughout history, property ownership rights and control have been very
important. Tribes conquered other tribes for the right to control property. Kings
fought with other kings for the right to control property. Countries have gone to
war for land. For many people, even the American dream centers on the thought
of one day owning their own property. Real property has been and still is a
valued commodity in almost all societies. The law of real property involves and
regulates almost every aspect of the use and ownership of this commodity. This
chapter provides an introduction to the law of real property.

GENERAL ASPECTS OF PROPERTY

The term “property” has no real legal meaning. It is an ambiguous term that is property
used by nonprofessionals to describe a variety of physical items, either tangible or Rights a person may own
or be entitled to own,
intangible. Ownership describes the relationship between an individual and his including personal and
property. A right of ownership simply describes a person’s right to particular prop- real property.
erty exclusive of others’ rights to the same property. Ownership to property boils
down to a person’s or an entity’s relationship to that property that enables them
to control the property with respect to other people or entities. People do not own
things; they have a right to possess and control them. The law of property involves
a collection of rights of ownership that are typically associated with property.
Among those rights is the right to possession. The law associated with real property
involves three elements that involve the control of property through ownership.
These elements are:
• Exclusivity—the ability to exclude another person from ownership, possession, or use
• Universality—ownership of everything by the state. The state is the origin of all
ownership rights.
1
2 Chapter 1 Introduction to Real Property Law

FIGURE 1.1 Right Effect on Property

Ownership Rights
Following is a list of Sell Subject to provisions of an easement or covenant
some of the rights Mortgage May have an adverse effect if an easement or
that are associated covenant causes an inability to obtain maximum
with ownership of financing on favorable terms
property and the Bequeath Could be subject to the provisions of any ease-
effect that these rights ment or covenant
may have on property. Lease Enables someone other than the owner to have
possession and use of the property for a period
of time as defined in the lease
Use and Occupy Subject to provisions of an easement or covenant
Grade, Fill, or Excavate Could be prohibited without governmental per-
mission unless minimal effect on property
Install New Permanent Roads Often prohibited without governmental permission
or Widen Existing Ones
Occupy/Use Existing Often no restrictions
Improvements
Construct New Improvements Major effect if the property has development poten-
tial. Governmental permission usually required.
Subdivide and Develop Sometimes prohibited or may be limited to large
tracts, such as 500 acres. Governmental permis-
sion usually required.
Farm Sometimes prohibited, depending on the type
and quality of the soil on the property

• Transferability—the ability, recognized by the legal system, to transfer someone’s

rights in property to someone else
See Figure 1.1 for a description of ownership rights.
All three of these elements associated with ownership rights must be present in a legal
system regarding property in order for it to function properly. These elements define the
various relationships that exist between people and property. As stated previously, a person
interest in property is said to hold an interest, or right, in property. The interest in property is defined as any
The right that someone right that the law will protect against being violated by others. Interests that are considered
may have in specific
property. inherent in real property are often referred to as a bundle of rights. This term emphasizes
the fact that property law is not made up of one simple concept of rights, but rather
bundle of rights encompasses many rights that the law associates with a person’s relationship with property.
The concept of ownership
that embraces certain The law of property concerns a person’s ability to possess, transfer, and have access to
rights of ownership, such her property. The theory of a bundle of rights states that ownership of real property
as possession, control, embraces a great many rights, such as the right to occupancy; the right to use; the right
use, enjoyment, and
disposition. to sell, bequeath, or transfer; and the right to benefits derived from the occupancy and
use of the property. The bundle of rights theory of ownership is often compared to a
bundle of sticks. Each stick in the bundle represents a distinct and separate right associated
with ownership of the property. These rights may include the rights to use the property,
to sell it, to lease it, to enter it, to give it away, and to choose to exercise more than one
or none of these rights. Although subject to certain limitations and restrictions, private
enjoyment of these rights is guaranteed by law under the United States Constitution.
possession Two distinct rights that occur throughout the law of property are those of possession
Having control over a and title. Possession occurs once a person has dominion and control over the property.
thing with the intent to
have and to exercise Title is the formal right of ownership. Title can be held in the name of one person,
such control. more than one person, or a legal entity. Title is the legal term that indicates that a per-
son or entity has rights to real property. Most people associate the possession of title
title
The right to or ownership as evidence of ownership in real property. Title is typically what the nonprofessional
in land. thinks of as ownership.
 Personal Property versus Real Property 3

Possession is considered occupation of the land, and that occupation must be dem-
onstrated by visible acts, such as enclosing the property, cultivating crops on the
property, constructing structures, and other visible signs of possession. The right of
possession is a right of exclusivity. The property owner has the right to exclude others right of exclusivity
from his land. The right to exclude all
others from the owner’s
A landowner also has the right to use her land for profit or pleasure, so long as property.
she does so within the boundaries of the law. An owner of property has the right to
dispose of her ownership of the property. The power of disposition can occur when power of disposition
the owner sells or leases her property, or it may take place at her death by inheritance the ability of an owner
to transfer the care and
or will should she choose to leave her rights in her property to another person or possession of her property
persons as beneficiaries. The law favors the free right to transfer ownership in prop- to another.
erty. The law will defend the right to transfer ownership in property so long as trans-
fer does not interfere with some important public purpose or private right.
Private property rights are subject to regulation by federal, state, and local govern-
ments. These governmental entities have the right to tax, regulate the use of, and take
private property for public use.

PERSONAL PROPERTY VERSUS REAL PROPERTY

The law recognizes two classifications of property: real and personal. Real property real property
relates to land and those things that are more or less permanently attached to the Land and all property per-
manently attached to it,
land, such as homes, buildings, and trees. Real property is land, plants growing on such as buildings.
the land, and structures that are permanently affixed to the land, as well as mineral
deposits that are contained below the land. Real property is not movable. Personal personal property
property is all property that is not classified as real property. Personal property refers Movable or intangible
thing not attached to real
to all other things, such as cars, furniture, stocks, and tools. Personal property is property.
property that is movable. (See Figure 1.2.)
Personal property is property that is movable, transferable, and limited in its dura-
tion. It exists independent of its location. Personal property is categorized into two

Real Personal
FIGURE 1.2
Differences between
Item Property Property
Real Property and
Land YES Personal Property
Anything Permanently
Affixed to Land
• Bushes YES
• Trees
• Houses
• Buildings
• Mineral deposits
Movable items YES
• Lamps
• Cars
• Washing machines
• Stock certificates
Fixtures YES
• May “look” like personal
property
Includes:
✓ Wallpaper
✓ Pipes in home
✓ Central air YES (Air conditioning—
conditioning window unit) YES
Tangible and Intangible Property YES
4 Chapter 1 Introduction to Real Property Law

tangible property
Personal property that can
be held or touched, such
SPOT THE ISSUE
as furniture or jewelry.
You are going on a trip for a week and you want your dog to be cared for while you are gone. You
intangible property take the dog to the kennel for it to be cared for in your absence. Is your dog considered property?
Personal property that If so, what type of property? While the dog is in the kennel, what rights to the dog have been
has no physical presence
transferred to the kennel and by what means has this occurred?
but is represented by a
certificate or some other
instrument, such as
stocks or trademarks.
types: tangible and intangible. Tangible property can take the form of goods or tan-
gift gible items of value. Examples of tangible personal property are cars, jewelry, and
Bestowing a benefit with- MP3 players. Intangible property is an item that represents something of value. For
out any expectation on
the part of the giver to re- example, a stock certificate in and of itself may have little value; however, it represents
ceive something in return ownership of a share or shares of stock that may be valuable.
and the absence of any Rights to personal property can be transferred. Personal property can be trans-
obligation on the part of
the receiver to do any-
ferred as a gift from one person to another. For example, in order to celebrate Mar-
thing in return. tha’s graduation from her paralegal program, Martha’s grandmother gives her a brief-
case. The gift of the briefcase to Martha by her grandmother effectuates a transfer
bailment
The delivery of personal of the property from the grandmother to Martha. A gift of personal property usually
property from one person transfers possession, ownership, and use of that property. Property can also be trans-
to another to be held ferred by bailment. A bailment is the transfer of possession and sometimes the use
temporarily.
of a property from one person to another. The laws that govern personal property
are expansive and outside the scope of the discussion of this chapter.
fixture Fixtures are items that are attached to the property. While a fixture may resemble
Personal property that personal property, once it is affixed to the land in some manner, it is considered part
has become permanently
attached or associated of the real property. When ownership to the real property is transferred, the fixture
with the real property. is transferred with it. Some of the methods for determining if an item is to be con-
sidered a fixture are these:
• The way or method that it is attached to the
real property. Is the property embedded into
LEGAL RESEARCH MAXIM the ground, or does it sit on top of the
property?
When dealing with issues of real property and the transfer of • How the item is adapted without consideration
rights, it is important to determine which items on the property
of the real property. For example, an in-ground
are considered real property and which are personal property.
If the determination is not made, items that are someone’s pool cannot be adapted outside the scope of
personal property may inadvertently be transferred during a the property it is attached to. However, an
real property transaction. above-ground pool can be moved to and exist
outside the real property, so it is considered to
be personal property.
• The intent of the person who affixed the property to the land
• The existence of an agreement that determines the nature of the property

CASE FACT PATTERN

John makes furniture for a living. John’s tools are an integral skill saw to the floor of the workshop with cement so that it
part of John’s business. John uses a skill saw for making his would be stable while he worked. Now, John has decided
furniture; it is one of his most important tools. In order to be to sell his home and move to another town. What type of
able to build furniture from his home, John built a workshop
in his backyard to house the tools of his trade and to provide FPO
property is the skill saw? Will the skill saw be considered
personal or real property? Why?
a workspace. When building the workshop, John affixed the
 Personal Property versus Real Property 5

As hinted at above, real property also includes everything beneath the surface of
the earth as well as in the air space above the land. An owner of real property typi-
cally owns the minerals that exist beneath the surface of the land, such as oil, gas,
coal, etc. An owner can also sell the mineral rights separately from the surface of the
land, or he can lease them to a company that has the ability to extract them. Usually,
the owner will receive royalty payments from the mineral lease. Also, an owner of
real property can sell the surface of the land and still maintain the rights to the min-
erals contained beneath the surface.
The owner of real property also owns the air space above the surface of the land.
Air space can be considered a valuable asset if it is located in the center of a city, or
it can be valuable because of the views that are seen from the land. Many cities have
passed laws that protect an owner’s airspace by preventing other owners of real prop-
erty from planting plants or erecting buildings that might infringe on someone’s view
from his property.
Trees, plants, and other things that grow in the soil may be considered a part of
the real property. Annual crops produced by labor, such as wheat, corn, and soybeans,
are considered personal property, as they must be cultivated every year and are not
indigenous to the real property. Crops are considered a commodity and are traded
on the stock exchange as such. Therefore, they are considered personal property as
opposed to real property.
In no jurisdiction can someone own water. A person can own rights to water, but
she cannot own the water. A real property owner also has certain rights to water that
is located above and below the property. In addition, an owner has certain rights to
water that runs through her property. The source of the water determines the rights
that a landowner possesses to use that water.
The source of the water dictates to a certain extent what rights an owner of prop-
erty can claim to the water that is associated with her property. Water is normally
categorized into the following areas with the following uses associated with it:
• Groundwater—water that is located beneath the surface of the land. Groundwa-
ter can be created by streams that flow underground or by rainwater that collects
in pools beneath the surface of the property. An owner of property has the right
to utilize groundwater located beneath her property in any way that she chooses,
provided that the owner does not cause the groundwater to be diverted so that it
harms an adjacent or adjoining property.
• Ocean and lakefront water—water that borders property. Examples are the
ocean, lakes, and ponds. An owner of property that borders a body of water has
the right to have access to the body of water. The right to access to a body of
water that borders property is known as a littoral right. littoral right
Use and enjoyment of
• Surface water. An owner has the right to use surface water in any manner that she water rights concerning
wishes, provided that she does not alter the natural flow of the water or cause properties abutting an
damage to another property due to her use. For example, suppose that a landown- ocean, sea, or lake rather
than a river or stream.
er’s property sits at the base of a hill. When it rains, the runoff of rainwater floods
the landowner’s barn. The landowner decides to divert the runoff away from her
barn. The diversion of the water causes the property below the landowner’s prop-
erty to flood. The landowner is not permitted to divert the water so as to cause riparian right
her neighbor’s property to flood. However, if the landowner decided to reclaim the The right of every person
through whose land a nat-
runoff and use it for watering her gardens, this use would be permitted. ural watercourse runs to
• Riparian rights—the right of a property owner to the beneficial use of water benefit of water as it
from streams, rivers, and natural lakes. These bodies of water are owned by the passes through the per-
son’s land, for all useful
government and not by individual landowners. However, all owners of properties purposes to which it may
that adjoin these waterways have equal right to the beneficial use of that water. An be applied.
6 Chapter 1 Introduction to Real Property Law

EYE ON ETHICS

It is very important for paralegals to know their laws in order to determine what rights and du-
state law as well as the law that governs their ties are provided to owners of real property in
jurisdiction. The law governing real property that jurisdiction. A legal professional has an
rights is typically mandated by state law. There- ethical duty of competence to research all
fore, if a case involves real property rights such state and local rules as they pertain to a client’s
as some of those described above, it is impor- property issue in order to ensure that the client’s
tant to thoroughly research your state and local rights are being adequately represented.

owner does not have the right to interfere with the natural flow of the water. For
example, a landowner upstream could not build a dam to collect water thereby
diverting the natural flow of the water and thereby deriving more benefit from the
use of the water than those property owners that are located downstream.
appropriation • Appropriation—usually found in the western states where water is scarce, the
The capture or diversion superior right to use water on the part of the property owner who uses the water
of water from its natural
course or channel and its first. The date of appropriation establishes a property owner’s water rights. The
application to some benefi- superior right goes to the property owner who utilized the water first. If not
cial use by the appropriator enough water exists to serve all of the needs of all of the owners, the first user
to the exclusion of all
other persons.
may use all that he needs while remaining owners may receive only some or none
of the remaining water supply. Under appropriation, an owner must show (1) the
intent to use the water for a beneficial purpose, (2) the actual diversion of the
water from its natural source, and (3) the use of the water for the beneficial pur-
pose within a reasonable amount of time.

RESEARCH THIS

Water rights are typically determined by state to water located on top of, beneath, or running
law. Research your state’s laws and determine through her property.
what rights a real property owner has with regard

METHODS OF ACQUIRING OWNERSHIP

inheritance TO REAL PROPERTY
The ability to acquire
ownership to real property
due to a person’s kinship
There are various methods by which someone can acquire ownership rights to real
to an owner of real property. Below is a brief overview of these methods.
property who has died.
Inheritance and Devise
intestate
The state of having died
Inheritance and devise are two methods of ownership transfer that occur at the death
without a will. of the owner of the property. Inheritance is the passage of title and ownership of real
property from the person who dies without a will (intestate) to people whom, because
devise
A disposition of real of blood or marriage, the law has legally designated as the real property owner’s heirs.
property by will. Each state has its own laws concerning inheritance of real property, and these laws
will
are different from state to state. The law of the state in which the real property is
A document representing located will govern the transfer of that property between parties.
the formal declaration of The acquisition of ownership by devise is the passage of title of real property from
a person’s wishes for the one who dies with a will and designates to whom the property should be left. A will
manner and distribution of
his or her property upon is a legal document that is prepared during the property owner’s lifetime that indicates
death. the property owner’s intent as to where and how his property is to be disposed of
 Methods of Acquiring Ownership to Real Property 7

after his death. The will must comply with the state law that governs wills as well as
the state law where the real property is located.

Gift
Ownership of real property can be transferred between parties by gift. Once there
has been a proper execution and delivery of the deed to the real property and the
transfer has been completed, then the gift of the real property is irrevocable. The
promise to make a gift of real property is revocable. However, once transfer of the
deed to the property has been completed, the process cannot be revoked. A gift is a
voluntary transfer to another made gratuitously and without consideration. A prom-
ise is not a gift. A promise is a declaration made by one person to another for a
good and valuable consideration.

Contract to Sale
Of course, the most common method of property acquisition is through purchase.
Property ownership can be obtained by buying the property, and ownership can be
transferred by the sale of the property.

Adverse Possession
One of the most coveted real property rights is that of possession, and the law gives
substantial protection to this right. In some instances, a person who is not the owner
of the property will gain possession of it through unlawful means. If a person obtains
possession of a piece of property unlawfully, she is also provided with the right to
exclude anyone else from possession of the property except for the true owner of that
property. The longer the person continues in unlawful possession of the property, the
stronger the presumption is that her possession began lawfully as opposed to unlaw-
fully. If the possession is maintained for a long enough period of time, then the pos-
sibility exists that that person who is in unlawful possession of the property will
become the legal owner of the property through a process known as adverse possession. adverse possession
Adverse possession is a means by which a person may acquire title to property by The legal taking of
another’s property by
operation of law. Adverse possession occurs when, after the statute of limitations to meeting the requirements
bring an action against the unlawful possessor has expired, the title of the real property of the state statute, typi-
is considered to be that of the person who is in adverse possession of the property cally open and continuous
use for a period of five to
and the original owner loses his ownership to the property. twenty years.
Like most real property laws, those concerning adverse possession vary from state to
state. Typically, the person who is the adverse possessor of the property must demon-
strate continuous possession of the property for a period of time ranging anywhere
from five to twenty years, depending on the state. Most states specify that the possession
of the property must be adverse to that of the true owner, which means that the pos-
session exists without the consent or permission of the true owner. Some state laws
deem that it is necessary for a person in adverse possession of the property actually to
have knowledge that she is in adverse possession of the property. The possession of the
property usually must be adverse to that of the true owner; it must be public or out in
the open; and it must be continuous, peaceful, exclusive, and uninterrupted.

CASE FACT PATTERN

John is hiking when he comes upon a beautiful valley. On the belongs to someone else, but he still decides that he is going
property, a cabin is situated that appears to have been aban- to live in it. John lives in the cabin continuously for twelve
doned for years. John decides that he would like to live on the years. The statute of limitations for gaining adverse posses-
property. He moves into the cabin and fixes it up. John is sion in the state where John resides is ten years. Has John
aware that he does not own the property and that the cabin obtained title to the property by adverse possession?
8 Chapter 1 Introduction to Real Property Law

Multiple periods of possession may be added together or tacked together in order

tacking to satisfy the possession requirement of the law. Tacking of periods of adverse pos-
A term applied especially session may be allowed if there is evidence of some contractual or blood relationship
to the process of estab-
lishing title to land by between the parties that have adverse possession of the property. Tacking is the add-
adverse possession, ing of possession periods by different parties who are in adverse possession of the
when the present occupant property. By tacking periods of unlawful possession together for parties who have a
and claimant has not
been in possession for the
contractual or blood relationship, the parties can meet the legal requirements for
full statutory period, but obtaining title to the property by adverse possession. For example, suppose that John
adds or “tacks” to his lived in the cabin for eight years. John’s son decided that he wanted to live there as
own possession that of
well. John’s son remains on the property for two more years. By adding the eight years
previous occupants under
whom he claims. of John’s possession with the two years of his son’s possession, John and his son meet
the requirement to obtain title to the property by adverse possession.
A person in adverse possession of real property will not have any written documentation
or written proof of ownership such as a deed. If the person who is in adverse possession
of the property wants to sell that property, he may have a difficult time establishing title
to that property. The adverse possessor may have to bring an action in the courts known
quiet title as a quiet title action in order to have the courts determine ownership. In an action to
A proceeding to establish quiet title to property, the person in adverse possession of the property essentially has
the plaintiff’s title to land
by bringing into court an to bring the action against the entire world and challenge anyone out there to come
adverse claimant and there forward and object to the adverse possessor’s claim of ownership to the property. Proof
compelling him either to of adverse possession will need to be established by affidavits or witnesses as to the time
establish his claim or be
forever after estopped
period of the adverse possession of the property, as well as the character and nature of
from asserting it. that possession. Was the possession continuous, public, etc.? If the court finds that
enough evidence exists to determine that the adverse possessor should be deemed the
owner of the property, then the court will issue a judgment stating that the adverse pos-
sessor is legally the owner of the property. The judgment issued by the court determin-
ing that the adverse possessor is the legal owner of the property can be used in the future
to evidence ownership for purposes of the future sale or transfer of the property.

Fee Simple
If you do not want your ownership of real property to be questioned, then you should
fee simple have an interest in real property that is considered to be in fee simple. Fee simple is the
An unlimited estate to a ultimate kind of estate or ownership right that an owner can have in real property. Fee
person and her heirs and
assigns forever, without simple is also sometimes known as fee simple absolute. Fee simple is a right in real
limitation or condition. property in which the owner is entitled to the entire estate, along with all of the rights
thereto. The right to the property encompasses the unconditional powers of disposition
estate
The degree, quantity, na- of the property during the owner’s lifetime as well as after the death of the owner. Fee
ture, and extent of inter- simple is the ultimate in legal ownership to a property. It is the entire “bundle of rights.”
est that a person has in The owner keeps all of the sticks in this bundle of rights. Fee simple exists for a poten-
real and personal
property. tially infinite period of time. The law presumes that a fee simple estate is created every
time that a conveyance of the property occurs, unless a lesser estate is mentioned in the
conveyance conveyance of the property and limits the extent of the estate. Most homes and com-
A transfer.
mercial properties are purchased and owned in a fee simple estate.
fee simple
determinable Fee Simple Determinable
An ownership interest A fee simple determinable is an ownership interest in real property that is limited so
in real property that is
created by conveyance
that it automatically expires when an event occurs that is stipulated in the deed of
containing the words the conveyance of the property or in the will that conveys the property. The estate
effective to create a fee granted in fee simple determinable is similar to an estate in fee simple. An estate in
simple and, in addition, a
fee simple determinable can be inherited and can last forever, so long as the condition
provision for automatic
expiration of the estate stated in the conveyance is not broken. In simple terms, an estate in fee simple deter-
upon a stated event. minable has a condition attached to the conveyance of the property. For example,
 Methods of Acquiring Ownership to Real Property 9

suppose that Mark conveys a piece of property to Peter with a condition stated in
the deed that Peter can have title to the property only if he builds a public park on
the land. If Peter builds a house, then the condition is broken, and title to the land
could possibly revert back to Mark as a result of the broken condition.

Fee Simple on Condition Subsequent

A fee simple on condition subsequent is created when an estate in fee simple is subject fee simple on
to the power of the person who conveyed the estate to recover the conveyed estate condition
on the occurrence of a specific event. However, if the breach of the condition occurs, subsequent
A type of transfer in
that does not automatically cause a termination of the fee simple on condition sub- which the grantor con-
sequent estate. For example, if Patrick transfers his property to Dana on the condition veys fee simple on condi-
that it is not used for commercial purposes and then Dana uses the property for com- tion that something be
done or not done to the
mercial purposes, then Patrick has the right to reenter and possess the land due to
property after the
the breach by Dana of the condition subsequent of not using the property for com- conveyance.
mercial purposes. The major difference between the fee simple determinable and the
fee simple on condition subsequent is that the fee simple determinable automatically
expires upon the violation of the specific condition contained in the document that
created the estate. In contrast, the fee simple on condition subsequent continues until
the estate is terminated by the actions of the grantor. Upon termination of the fee grantor
simple on condition subsequent, the grantor has the right to reenter the property. At The person transferring
the property.
that time, the grantor may transfer the property to another person if she wants to.
Creation of a fee simple determinable or a fee simple on condition subsequent gives life estate
An ownership interest in
the landowner the means of controlling the use of the property after he transfers it
property for a designated
to someone else or after her death. If the condition is broken after the grantor’s death, period of time, based on
sometimes her heirs can reenter the property as a result of the broken condition. the life of another person.

Life Estate measuring life

Person whose life deter-
A life estate is one that is granted and measured by the life or lives of one or more per- mines duration of the life
sons. An estate for life may be for either the life of the owner of the property or the estate.
life of some other person or people. The person (or persons) whose life is used as the reversion
determinable factor is called the measuring life. A life estate can be created by a deed, A future interest under
a will, or an agreement between the parties. At the time of the creation of a life estate, which a grantor retains a
present right to a future
the owner retains or creates either a reversion or a remainder interest. (See Figure 1.3.) interest in property that
A reversion exists when the owner grants a life estate to another person, with the the grantor conveys to
condition that the possession of the property will revert, or return, to the owner upon another.
the death of the person who has the life estate. remainder interest
The owner of the property may grant a life estate to one person and the right of The property that passes
ownership to another person upon the expiration of the life estate. That means that to a beneficiary after the
expiration of an intervening
once the person who has the life estate dies, the property will then go to a third per- income interest.
son. This is known as a remainder interest. The owner of a life estate is entitled to

Reversion FIGURE 1.3

Difference Between
Upon the death of B, Reversion and
A grants B an estate B has life estate
A‘s interest becomes Remainder Property
for life with a reversion for the life of B
possessory Interests

Remainder Interest

Upon the death of B, C’s

A grants B an estate
B has life estate interest becomes
for life with a
for the life of B possessory and A owns
remainder to C
nothing
10 Chapter 1 Introduction to Real Property Law

the full use and enjoyment of the real property so long as he exercises ordinary care
and prudence for the preservation and protection of the property. He must not intend
to cause permanent injury to the person who is to be the owner of the real property
once the life estate terminates. If the person who has the life estate does not take care
waste of the property, then the life estate owner will be deemed to have committed waste.
Deterioration of the At that point, the life estate terminates, even if the measuring life is still alive. Failure
property.
to make needed repairs or improvements on the property may be considered to be
acts of waste. There are three kinds of waste under the law:
1. Voluntary waste is any structural change made to the property that intentionally
or negligently causes harm to or depletes the resources of the property unless
this depletion is a continuation of some preexisting use for a particular resource,
if the land has already been used for that purpose. For example, a mine cannot
be placed on the property in order to deplete the property of its mineral
resources as that would constitute waste. However, if a mine already existed on
the property, the current tenant can continue the use of the mine.
2. Permissive waste is the failure to physically or financially maintain the estate.
This includes the failure to make ordinary repairs, pay taxes, or pay interest on
the mortgage.
3. Ameliorative waste is an improvement to the estate that changes its character, even
if the change actually increases its value. For example, if the tenant tears down a
residence and replaces it with a shopping center, the owner can sue the tenant for
the cost of restoring the property to its original condition even if the shopping
center is of greater value. In the United States, damages for ameliorative waste are
not generally awarded. The theory behind this policy is to encourage improvements
and economic development.
As a general rule, the person who possesses the life estate is entitled to all income
generated from the real property. She is also entitled to possession of the real property
during the ownership of the life estate. Life estates are transferable. The owner of the
life estate can transfer only that life estate that is subject to the duration of the mea-
suring life. A life estate owner typically has to pay property taxes on the property
during the life estate as well as keep the property insured against loss. In addition,
the life estate owner must pay any debts secured by the real property.
estate for years Estate for Years
A type of estate less than
a freehold estate, where a
An estate for years is an estate granted for a fixed period of time. The estate for years
person has an interest in continues until the time period for the ownership expires. An estate for years is the sec-
land and tenements, and ond most common form of property ownership, next to the fee simple. An estate for
a possession thereof, by
years may be evidenced by a lease. However, many leases are not estates for years. For
virtue of such interest, for
some fixed and determi- a lease to be considered to be an estate for years, the lease must clearly state that the
nate period of time ownership to the real property is being conveyed and not just the rights to possession.

YOU BE THE JUDGE

Molly is the mother of Buddy and Frank. Her husband has property. Buddy and Frank now decide that they want to
recently died, and Molly has no place to live. Buddy and have their mom, Molly, live in the property for the rest of her
Frank own a small house in a neighboring township that they life. Buddy and Frank grant Molly a life estate in the small
have bought for investment and have been renting to tenants. house using her own life as the measuring life. After Molly’s
The tenants moved out shortly before their dad’s death. death, the property will return to Buddy and Frank. Describe
Buddy and Frank have not yet found new tenants for the the various property interests of Molly, Buddy, and Frank.
 Sources of Real Property Law 11

Estate at Will
An estate at will is an estate that is created by the express or implied agreements of estate at will
the parties with no fixed term designated. An estate at will can be terminated at any A type of estate less than
a freehold estate, where
time by either party. An estate at will can also be created by implication. For example, land and tenements are
at the expiration of the period of the estate, the possessor of the estate continues to let by one person to an-
pay rent. If the owner continues to accept the rent of the possessor, the implication other, to have and to hold
at the will of the lessor.
is that the estate at will continues.

SOURCES OF REAL PROPERTY LAW

Much of the law of property has been developed over time from early Anglo-Saxon times.
The basis of most of the laws concerning property are found in common law. However, PRACTICE
TIP
many laws of real property are also found in case law and statutes. The primary source of
real property law is case law. The appellate courts of individual states decide issues con- Paralegals are used
cerning property law, and those decisions become law in that state. Decisions can vary by law firms, corpo-
rations, and govern-
from one state court to another state court. In addition to case law, states can enact statu- mental agencies in
tes that govern issues concerning real property ownership and rights. Real property rights various areas of real
and ownership are highly regulated by state statutes. State statutes also vary from state to property law. Typical
state. If you are going to do work in the area of real property, it is necessary to be famil- activities of a para-
iar with your state’s laws regarding real property. The laws in effect in the place where legal working in the
area of real property
the real property is located are usually the laws that govern the real property issues.
can include prepar-
Another source of real property law is the Second Restatement of Property, which ing legal documents,
contains information concerning case law, statutes and other real property legal infor- conducting title
mation. It is a compilation of common law that applies to real property. The Second searches, preparing
Restatement of Property is not law. It is only a secondary authority that can be land descriptions,
reviewed for information and explanation of a real property issue. It should not be reviewing leases,
and meeting with
cited as a primary source of law. This does not diminish the enormous value that this clients. Real property
source provides, but it is not considered the law. issues cross over
In 1677, the statute of frauds was enacted into English law. The purpose of the stat- into other areas of
ute of frauds was to prevent fraudulent practices in transactions concerning real property. law as well, such as
The statute of frauds has been adopted in almost every state and provides that certain family law, wills and
trusts, and torts. It
real property contracts will not be enforceable unless they are in writing. This is what
is important for an
distinguishes real property contracts from many other forms of contracts not requiring aspiring paralegal
a writing to prove validity. A number of other forms of contracts abide by the statute to become familiar
of frauds as well, including: marriage, certain guaranty loans, and bankruptcy. with real property
law concepts and
to network within
the community.
RESEARCH THIS
be in writing to be enforceable under the statute of
Research the law in your state. Determine if your
frauds in your state. Also, research and write down
state has adopted the statute of frauds. If so, write
the citation to your state’s statute of frauds.
down the types of real property contracts that must

SURF’S UP

The Internet provides a wealth of information on real prop- daily for discussion among the hundreds of real estate law-
erty issues. Perhaps one of the more interesting Web sites yers who are members of the group. Look at the daily post-
is that of DIRT. DIRT is an e-mail legal discussion group for ings on the site in order to learn what one thousand real
real estate professionals. DIRT can be located at www.dirt. estate professionals believe are important real property
unkc.edu. Interesting real estate cases are posted almost topics.
12 Chapter 1 Introduction to Real Property Law

PRACTICE TIP

When dealing with real property transactions, it the local government that enable property to be
is important to identify the property in question properly identified in legal documents and that
correctly. The description should be able to ensure that the document is enforceable. Legal
specify boundaries to the land and distinguish descriptions usually describe property in terms
the land from other parcels of land. Every state of metes and bounds or lot numbers of a re-
has set up a system of legal property descrip- corded plat. These descriptions provide a
tions. Legal property descriptions are the cor- method by which the property can be properly
rect and specific descriptions established by identified.

Summary The term “property” has no real legal meaning. It is an ambiguous term that is used
by nonprofessionals to describe a variety of physical items, either tangible or intan-
gible. Ownership describes the relationship between an individual and his property.
People do not own things; they have a right to possess them. The law of property
involves a collection of rights associated with property. Among those rights is the
right to possession. The law associated with real property involves three elements:
(1) exclusivity—the ability to exclude another person from ownership, possession or
use; (2) universality—ownership of everything by the state, so that the state is the origin
of all ownership rights; (3) transferability—the ability, recognized by the legal system,
to transfer someone’s rights in property to someone else.
Two distinct rights that occur throughout the law of property are those of posses-
sion and title. Possession exists when a person has dominion and control over the
property. Title is typically what the nonprofessional thinks of as ownership. Title is
the formal right of ownership. Title can be held in the name of one person, more
than one person, or a legal entity.
The law recognizes two classifications of property: real and personal. Real property
relates to land and those things that are more or less permanently attached to the
land, such as homes, buildings, and trees. Real property is land, plants growing on
the land, structures that are permanently affixed to the land, and mineral deposits
that are contained below the land. Fixtures are items that are attached to the property.
Real property is not movable. Personal property is all property that is not classified
as real property. Personal property refers to all other things, such as cars, furniture,
stocks, and tools. Personal property is property that is movable.
Inheritance and devise are two methods of ownership transfer that occur at the
death of the owner of the property. Inheritance is the passage of title and ownership
of real property from the person who dies without a will (intestate) to people whom,
because of blood or marriage, the law has legally designated as the real property
owner’s heirs. Each state has its own laws concerning inheritance of real property,
and these laws are different from state to state. The law of the state in which the real
property is located will govern the transfer of that property between parties.
Ownership of real property can be transferred between parties by gift. Once there
has been a proper execution and delivery of the deed to the real property and the
transfer has been completed, then the gift of the real property is irrevocable. The
promise to make a gift of real property is revocable. However, once the deed to the
property has been properly executed and delivered and the transfer has been com-
pleted, the process cannot be revoked.
The most common method of property acquisition is through purchase. Property
ownership can be obtained by the purchase of the property, and ownership can be
transferred by the sale of the property.
 Summary 13

One of the most coveted real property rights is that of possession, and the law gives
substantial protection to this right. If a person obtains possession of a piece of prop-
erty unlawfully, she is also provided with the right to exclude anyone else from posses-
sion except for the true owner of that real property. The longer the person continues
in possession of the property, the stronger the presumption is that her possession began
lawfully as opposed to unlawfully. If the possession is maintained for a long enough
period of time, then the possibility exists that that person who is in possession of the
property will become the legal owner of the property through a process known as
adverse possession. Adverse possession occurs when, after the statute of limitations to
bring an action against the possessor has expired, the title of the real property is con-
sidered to be that of the person who is in adverse possession of the property.
Tacking is the adding of possession periods by different parties who are in adverse
possession of the property. Tacking of periods of possession may be allowed if there
is evidence of some contractual or blood relationship between the two parties that
have adverse possession of the property.
Fee simple is the ultimate kind of estate or ownership right that an owner can have
in real property. Fee simple is also sometimes known as fee simple absolute. Fee
simple is a right in real property in which the owner is entitled to the entire estate
along with all of the rights thereto. The right to the property encompasses the uncon-
ditional powers of disposition of the property during the owner’s lifetime as well as
after the death of the owner. Fee simple is the ultimate in legal ownership to a prop-
erty. It is the entire “bundle of rights.” Fee simple exists for a potentially infinite
period of time. The law presumes that a fee simple estate is created every time that a
conveyance of the property occurs unless a lesser estate is mentioned in the convey-
ance of the property and limits the extent of the estate.
A fee simple determinable is an ownership interest in real property that is limited
so that it automatically expires when an event that is stated in the deed of the convey-
ance of the property or in the will does or does not occur. An estate granted in fee
simple determinable is similar to an estate in fee simple. An estate in fee simple deter-
minable can be inherited and can last forever so long as the condition stated in the
conveyance is not broken. In simple terms, an estate in fee simple determinable has
a condition attached to the conveyance of the property.
A fee simple on condition subsequent is created when an estate in fee simple is
subject to the power of the person who conveyed the estate to recover the conveyed
estate on the occurrence of a specific event. However, if the breach of the condition
occurs, that does not automatically cause a termination of the fee simple on condition
subsequent estate.
A life estate is one that is granted and measured by the life or lives of one or more
persons. An estate for life may be for either the life of the owner of the property or
the life of some other person or people. The person (or persons) whose life is used
as the determinable factor is called the measuring life. A life estate can be created by
a deed, a will, or an agreement between the parties. At the time of the creation of a
life estate, the owner retains or creates a reversion or a remainder interest.
An estate for years is an estate granted for a fixed period of time. The estate for years
continues until the time period for the ownership expires. An estate for years is the
second most common form of property ownership next to the fee simple. An estate for
years may be evidenced by a lease. However, many leases are not estates for years. For
a lease to be considered an estate for years, the lease must clearly state that the owner-
ship to the real property is being conveyed and not just the rights to possession.
An estate at will is an estate that is created by the express or implied agreements
of the parties with no fixed term designated. An estate at will can be terminated at
any time by either party. An estate at will can also be created by implication.
14 Chapter 1 Introduction to Real Property Law

Key Terms Adverse possession Life estate

Appropriation Littoral right
Bailment Measuring life
Bundle of rights Personal property
Conveyance Possession
Devise Power of disposition
Estate Property
Estate at will Quiet title
Estate for years Real property
Fee simple Remainder interest
Fee simple determinable Reversion
Fee simple on condition subsequent Right of exclusivity
Fixture Riparian Right
Gift Tacking
Grantor Tangible property
Inheritance Title
Intangible property Waste
Interest in property Will
Intestate

Review 1. What is the difference between real property and personal property?
Questions 2. Why can’t someone own property?
3. Can someone maintain mineral rights to property that he has sold? If so, how?
4. What is a fixture?
5. What is the difference between a fee simple determinable and a fee simple on
condition subsequent?
6. Why is a fee simple the best estate to have?
7. What is an estate at will?
8. What is an estate for years?
9. What is a life estate?
10. What is a measuring life?
11. How is waste applicable to a life estate?
12. What is a devise?
13. What is a grantor?
14. How can a possessor of property obtain ownership if she is not legally the owner?
15. What is an action for quiet title?

Exercises 1. Locate your state’s codes concerning real property. Look up the codes for life
estates and write down the code and section that pertain to the measuring life.
What are the factors to consider in your state in determining the measuring life?
2. Looking at your state codes, determine the requirements in order for someone to
obtain title to property under a theory of adverse possession. Be sure to include
the time period necessary as well as what the nature and character of the posses-
sion must be in order to perfect title under adverse possession.
 Exercises 15

3. Using whatever sources are available to you, locate a case that has to do with
the quieting of title under a theory of adverse possession. Brief the case and be
prepared to present it to the class. What did the court rule and why?
4. “Was a fixture always a fixture,” asked Shakespeare. Was it? Explain.
5. In America, do you really ultimately own your private property, even with a deed?
Why or why not? Explain.
6. What is the Statute of Frauds? What part in real property transactions does it
play and why?
7. Many states are common property states for married individuals. How does this
fit into owning real estate and survivorship?
8. Using your own address, whether a house or an apartment in a building, research
the title and see who officially owns the piece of property where you live.

PORTFOLIO ASSIGNMENT

As a paralegal in a law firm, you will be responsible for gathering information from clients regarding
their real property matters. For this assignment, you are to compose a letter to Mrs. Doris White
with the purpose of obtaining information from her regarding her property and her desire to
transfer her interests therein. In the letter, include a brief description of the difference between
personal and real property, and ask her to identify both of these types of property that are located
on her property. Also, provide a description of a fixture and ask her to identify any fixtures. Finally,
describe the different types of ownership of property and ask her how she would like to transfer
her interests in her property.
 Vocabulary Builder

1 2
3 4 5 6

7 8
9
10

11

12

13 14

15 16

17

18

19 20

21 22

23

Instructions
Use the key terms from this chapter to fill in the answers to the crossword puzzle.
NOTE: When the answer is more than one word, leave a blank space between the words.

ACROSS 3. An unlimited estate to a person and his or her heirs and

4. A future interest under which a grantor retains a pres- assigns forever without limitation or condition.
ent right to a future interest in property that the grantor 5. Property that has no intrinsic and marketable value, but
conveys to another. is merely the representative or evidence of value.
7. An article in the nature of personal property that has 6. In a broad and general sense, everything that is the
been so annexed to the reality that it is regarded as a subject of ownership, not coming under the denomina-
part of the real property. tion of real estate.
8. A voluntary transfer of property to another made gratu- 9. A delivery of goods or personal property, by one person
itously and without consideration. (bailor) to another (bailee), in trust until such time that it
14. A method of acquisition of title to real property by pos- is returned to the bailor.
session for a statutory period under certain conditions. 10. The degree, quantity, nature, and extent of interest
16. Without a will at the time of death. which a person has in real and personal property.
17. The transfer of title to land from one person, or class of 11. The ability to acquire ownership to real property due to
persons, to another by deed. a person’s kinship to an owner of real property who has
18. Property that has physical form and substance and can died.
be seen and touched 12. The term is applied especially to the process of estab-
19. The right that someone may have in specific property. lishing title to land by adverse possession, when the
21. The person by whom a grant is made present occupant and claimant has not been in posses-
22. The capture or diversion of water from its natural course sion for the full statutory period, but adds or “tacks” to
or channel and its application to some beneficial use by his own possession that of previous occupants under
the appropriator to the exclusion of all other persons whom he claims.
23. Land, and generally whatever is erected or growing 13. The right which every person through whose land a nat-
upon or affixed to the land. ural watercourse runs has to benefit of water as it passes
through her land for all useful purposes to which it may
DOWN be applied.
1. The conveyance of real property by means of a last will 15. A proceeding to establish the plaintiff’s title to land by
and testament. bringing into court an adverse claimant and there com-
2. Use and enjoyment of water rights concerning proper- pelling him either to establish his claim or be forever af-
ties abutting an ocean, sea or lake rather than a river or ter estopped from asserting it.
stream. 20. The right to or ownership in land
 CASE IN POINT

LITTORAL RIGHTS START AT MEAN HIGH WATERMARK

Watts v. Lawrence, 690 So. 2d 1162 (Miss. 1997).

OVERVIEW littoral rights existed.2 As a result, Watts argued that the Law-
rences were not entitled to build any structure over the water.
The Lawrences countered that littoral rights begin at the aver-
The Mississippi Supreme Court recently ruled that waterfront
age high water mark, and since the southern boundary of their
property owners may build certain structures, such as piers
property touched water at high tide, the land possessed littoral
and boathouses, subject only to the regulation of the Bureau of
rights. Furthermore, the Lawrences argued that the chancery
Marine Resources (BMR). In doing so, the court held that a
court’s establishment of a littoral property line was inappropri-
waterfront property owner’s littoral rights (interests concerning
ate. In their ruling, the Mississippi Supreme Court noted that
the ocean, sea or lake abutting property) are measured from
Watts’s claim that the Lawrence property did not enjoy littoral
the mean high watermark. In affirming the greater part of a
rights was not supported by case law and was based on a
chancery court decision, the Mississippi Supreme Court re-
“misguided” interpretation of § 49-15-9.3
jected the chancery court’s attempt to define a littoral property
The high court held that § 49-15-9 did not establish a test for
line between neighboring waterfront lots.
determining whether littoral rights exist but only concerned the
extent of such rights once established. The court relied on the
BACKGROUND case of Cinque Bambini Partnership v. State, 491 So. 2d 508,
516-517 (Miss. 1986), in which it held that the state owns the
Defendants David and Deborah Lawrence owned waterfront property between the mean low watermark and the mean high
property adjacent to the Back Bay of Biloxi in Harrison County, watermark in trust for all citizens. The court built on Cinque
Mississippi. They applied for and received a BMR permit to Bambini and ruled for that any property adjacent to the mean
build a pier and a boathouse adjacent to their shoreline. The high water line, not mean low water, possesses littoral rights.4
construction plans included motorized hoists to lift and lower a Because the Lawrence property was adjacent to the mean
boat and placed the boathouse more than fifteen feet beyond high water line, the court affirmed the determination that the
the high watermark. After driving the pilings but before com- Lawrences had littoral rights.
pletion of the boathouse, adjoining property owner James Having ruled that littoral rights existed, the court turned to
Watts objected to the construction of the boathouse. Watts the issue of the nature and extent of those rights. The relevant
contended that the Lawrences did not own property possess- statute (Miss. Code Ann. § 49-15-9) allows, among other things,
ing littoral rights and as a result were not entitled to build any the building of structures, such as piers and boathouses over
structure over the water beyond the lot line. the water. However, the statute subjects any such development
To protest the construction of the boathouse, Watts filed to the regulation of the Bureau of Marine Resources based on
suit against the Lawrences in the Harrison Court Chancery the fact that littoral rights are merely licenses to use property
Court seeking a permanent injunction. The chancellor deter- granted by the State and not full-fledged property rights.5 The
mined that the Lawrence property possessed littoral rights and Mississippi Supreme Court allowed the Lawrences to continue
denied the injunction. In so ruling, the chancellor drew the construction of the boathouse, because the BMR approved
a demarcation line between the littoral property of the parties. the project via issuance of a permit. In doing so, the Mississippi
Watts appealed the denial of the injunction. The Law- Supreme Court affirmed the chancery court’s denial of the per-
rences cross-appealed on the decision to establish a line of manent injunction.
demarcation.
LITTORAL PROPERTY LINES
LITTORAL RIGHTS CLAIM In it effort to resolve the dispute between the neighboring water-
front property owners, the chancery court had established a litto-
The Mississippi Code states in pertinent part: ral property line, or line of demarcation, between the litigants’
[t]he sole right of . . . erecting bathhouses and other struc- respective water areas.6 The Mississippi Supreme Court found
tures in front of any land bordering on the Gulf of Mexico or the lower court’s establishment of a demarcation line between
Mississippi Sound or waters tributary thereto belongs to the the parties’ littoral property unnecessary and improper given the
riparian owner and extends not more than seven hundred fifty BMR’s regulatory authority. Since the BMR, through its permit
(750) yards from the shore, measuring from the average low issuance, deemed the boathouse properly placed, a littoral prop-
water mark.1 erty line was not needed. Accordingly, the Mississippi Supreme
Under this provision, Watts argued that riparian or littoral Court struck down the chancellor’s demarcation line .
rights begin at the “average low water mark.” Watts contended
that since the land records showed no part of the Lawrence Source: Watts, 690 So. 2d at 1163. Reprinted with permission of
property touching water at the average low water mark, no Westlaw.

17