Chapter 19 · Real estate
Property rights
What an owner holds, and what goes with the land
Owning real estate is not owning a thing so much as holding a set of rights: to occupy it, use it, keep others off it, and pass it on.
This chapter is hands on. Hand rights out of a bundle, sort a house on moving day, ration a river through a dry year, and place a boundary after the river moves.
19.1 · The bundle of rights
Possession, control, enjoyment, exclusion, disposition
Ownership of real property is a bundle of legal rights: possession, control, enjoyment, exclusion and disposition. An owner can transfer some rights and keep the rest: a lease transfers possession for a term, an easement gives another a right of use, and a mortgage pledges the property as security. The government's powers of taxation, eminent domain, police power and escheat limit every owner's bundle.
Why: Seeing ownership as separate rights explains how a tenant, a neighbor and a lender can all hold an interest in a property one person owns.
Hand sticks to the tenant, the neighbor and the bank, sell to a buyer, then run the years: watch a lease revert, a loan end in foreclosure, an owner die with and without a will, and the government zone, take and tax.
Watch out: A buyer takes title subject to existing leases and easements. Selling passes only the rights the seller still holds. A will passes nothing until death, and a mortgage lien must be paid off before a buyer takes the property free of it.
One owner, five sticks, six other parties. Hand rights out, run the years, and watch where every stick ends up.
1 / 6 Hand out sticks
Make three deals. Drag a stick to a party (or click a stick, then a party), choose the whole stick or a piece, and sign.
Predict After a lease, an easement and a mortgage, who holds title to the property?
Drag a stick onto a party, or click a stick and then a party. Drag empty space to turn the view.
Sticks the owner holds today
Deal to
Timeline
Today: nothing has happened yet.
Goals
- Make the owner a landlord
- Let the neighbor use the driveway
- Pledge the property for a loan
| Owner (title) | possession, control, enjoyment, exclusion, disposition |
|---|---|
| Tenant | — |
| Neighbor | — |
| Bank | — |
| Buyer | — |
| Heirs | — |
| Government | — |
19.2 · Real property, personal property and fixtures
Does it stay with the house?
Real property is the land, everything permanently attached to it, and the rights that go with it. Personal property (chattels) is movable. A fixture is an item that was personal property but has been attached to the real property, so it conveys with it. Courts weigh the method of attachment, adaptation to the property, the relationship of the parties, the intention of the person who attached it, and any agreement between the parties.
Why: A deed conveys the real property, fixtures included; personal property is transferred separately, by a bill of sale.
Play the five stages below: pack the seller's van, change who installed the oven, move a restaurant out at the end of its lease, write the contract's inclusions and exclusions, and end a farm lease before harvest.
Watch out: Trade fixtures are the exception: equipment a tenant installs for a business remains the tenant's personal property and may be removed before the lease ends; left behind, it generally becomes the landlord's. Annual crops a tenant planted (emblements) are generally the tenant's to come back and harvest.
Who keeps what when a house is sold or a lease ends? Take things out yourself, then see who was owed them and which test decides.
Click a thing in the scene, or pick it from the list. Drag to turn the view.
1 / 5Moving day
You are the seller. The house is sold and the contract says nothing about any of these. Take what is yours, with the right tool, and leave what goes to the buyer. Then close.
19.3 · Water in a dry year
First in time, or land along the water?
Riparian rights belong to owners of land along a river or stream; littoral rights to owners along a lake or sea. A riparian owner may make reasonable use of the water, and in a shortage the riparian owners share it. Some states, mostly in the West, follow prior appropriation instead: a right is created by putting water to a beneficial use, usually under a state permit, and is ranked by that date, "first in time, first in right". A senior right is filled whole before a junior gets any, wherever each sits on the river, and a right left unused for the period state law sets can be forfeited. Some states use a mix of both.
Why: Where water is plentiful, sharing among riverside owners works. Where it is scarce, a fixed order lets every user know in advance who goes without in a dry year.
Run five dry seasons on the river below. Set the headgates yourself; the fields show what each user got.
Watch out: Under prior appropriation, position on the river means nothing and owning riverside land is not required. Under riparian law, land away from the water has no right at all.
Four users share one river, and this is a dry year. Set the headgates the way the law requires, then run the season and see whose fields get water.
| River order | Right | Needs | Headgate |
|---|---|---|---|
| 1. Farm B | since 1902 | 25 | |
| 2. Farm C | since 1950 | 25 | |
| 3. Farm A | since 1887 | 30 | |
| 4. Ranch D | since 1998 | 20 |
The river carries 55 units; the four users need 100. Close the headgate of every user the law owes nothing this season, then run the season.
19.4 · When the river moves
Slow change moves the line; sudden change does not
Land added slowly by deposits (accretion) or exposed as water recedes (reliction) belongs to the shore owner, and land worn away slowly is lost (erosion); in each, the boundary moves with the water. A sudden change of course (avulsion) does not move the boundary. On non-navigable water each owner generally owns to the center of the stream; the beds of navigable waters are generally held by the state for the public, so the owner's land runs to the water's edge.
Why: The law follows changes too slow to notice, but will not let a single storm shift ownership.
Place the boundary yourself after each change below, then reveal where it really runs.
Watch out: Avulsion is about speed, not size: a sudden change leaves the boundary where it was, however much land the water moves.
A and B own the land on either side of a non-navigable river. Change the river, place the boundary yourself, then see where it really runs.
1 / 3 Run the years forward past 20. Slow deposits build land on A's bank and the river creeps east. Then place the boundary.
19.5 · Air and subsurface rights
Ownership goes up and down as well as across
An owner's rights extend above the surface (air rights) and below it (subsurface or mineral rights). Each can be sold, leased or kept separately: an owner may sell the minerals and keep the surface, or sell air rights above a building. Air rights are limited by law, for example by aircraft's right to pass over at lawful altitudes. Minerals are severed by a reservation in a deed or by a separate mineral deed, and the mineral estate is generally dominant: its owner may make reasonable use of the surface to reach the minerals (some states require notice, accommodation of existing uses, or payment for surface damage).
Why: Separating the layers lets each be used by whoever values it most, a mining company below, a builder above.
A buyer of a ranch whose minerals were sold earlier gets the surface only; the mineral owner may hold rights to reach the minerals.
Watch out: Check the chain of title for earlier mineral or air rights conveyances; a deed to the surface does not bring them back. Removing support from below breaches subjacent support; from the neighboring land, lateral support.
One parcel, three layers. Trace who owns each, then watch what each owner may do.
1 / 5 Read the title
Diaz is selling the parcel to Evans. Open the deeds in the chain of title, oldest first.
Practice · Set 1
Each question sets the figure to its own numbers
An owner leases a house to a tenant for two years. Which right in the bundle has the owner transferred?
Practice · Set 2
Each question sets the figure to its own numbers
Which of these is NOT one of the usual tests for whether an item is a fixture?
Practice · Exam style
Each question sets the figure to its own numbers
A city adopts a rule limiting new buildings in one neighborhood to two stories. Which government power is the city using?
- Using and holding
- Passing it on