BUS205 Study Guide
Unit 5: Property Law
5a. Distinguish between real and personal property, and identify examples of each
- How does real property differ from personal property?
- What are some examples of real property?
- What are some examples of personal property?
Real property is land and interests in land such as mineral rights. Real property includes anything attached to land or that is a part of the land, such as buildings, plants, and subsurface minerals. Unlike personal property, real property is not movable. Personal property is movable property. It is not land, nor is it fixed to real property. Examples of personal property include equipment, furniture, supplies, and intellectual property such as trade secrets and patents. To review, read Personal Property and Real Property.
5b. Define tangible and intangible personal property, distinguish between both types of property, and identify examples of each
- What is tangible personal property?
- What is intangible personal property?
- How does tangible personal property differ from intangible personal property?
- What are some examples of tangible and intangible personal property?
Tangible personal property is personal property that has a physical existence. Intangible personal property does not have a physical existence. Tangible property comprises of all types of real property and physical personal property, such as equipment, vehicles, and buildings. Movable tangible property is called chattel. Once personal property has become attached to land, it is treated like real property and it is called a fixture. Intangible property is personal property that does not have a physical quality, such as customer lists, licensing agreements, and mineral rights. Like tangible property owners, intangible personal property owners are afforded ownership rights and protection under the law. For example, owners of intangible personal property can demand royalties for the use of their intellectual property. Owners may also prohibit or restrict use of their intellectual property. To review, read Personal Property.
5c. Identify the various interests in real property and how they pass
- What are the interests conveyed in a quitclaim deed?
- What are the interests conveyed in a warranty deed?
- What is adverse possession?
Types of Deeds
An interest in real property can be conveyed by a quitclaim deed. A quitclaim deed is a legal instrument through which a person called the grantor conveys property to another called the grantee. The grantor can only convey his or her current interest in the property. The grantor does not claim to have title to the property or that the grantor has good title to the property.
A warranty deed is a legal instrument through which a grantor guarantees to the grantor that the property being conveyed is free of liens or easements. It differs from a quitclaim deed in that grantor conveys title and a warranty against defects in the title as well as encumbrances.
To review, read Real Property.
Squatter's Rights & Adverse Possession
Squatter's rights to property are acquired by adverse possession. That is, an individual who is wrongfully in possession of the original owner's property can acquire ownership rights by meeting state statutory requirements. Adverse possession requires continuous possession (possession of the property without interruption). Possession must be open and notorious (visible). Possession of the real property must meet the designated statutory time (usually 5-20 years). The possession must be hostile (done without the owner's permission) and it must be actual and exclusive (actual physical occupation of the property that excludes others from the property). To review, read Real Property.
Types of Ownership Interests
A party's interest right in land is called an estate. An estate gives the party the right to possess, use, and enjoy the property. The type of interest conveyed to an owner depends on the language contained in the document of conveyance (for example, deed or will). The following are examples of estates:
- A fee simple absolute is the maximum estate permitted under the law. There are no restrictions or conditions placed on ownership of this estate.
- A fee simple defeasible is subject to a condition of ownership or a future event. If the condition is violated or a future event happens, ownership in the land reverts back to the original owner or the person the original owner designates.
- A life estate grants ownership interest in land for the life of the designated person.
Co-ownership represents another way in which one or more parties can own property together. The following are examples of co-ownerships:
- A tenancy in common grants all owners an undivided interest in the property, equal rights of possession, and a divisible interest.
- A joint tenancy grants a surviving owner the right of survivorship. This means the surviving owner receives the ownership interests of the deceased owner.
- A tenancy by the entirety is reserved exclusively for spouses. It grants the surviving spouse a right to survivorship.
To review, read Real Property.
Non-Possessory Interests in Land
Easements and covenants are non-possessory interests in land. An easement gives a person the right to use another person's land for a particular purpose. Easements may be express or implied. For example, a landowner may give a party permission to use part of their property for a utility easement.
A covenant is a voluntary restriction on land use. For example, a homeowner's association may enforce rules (covenants) agreed to by property owners that dictate how the property owners use their land. The rules (covenants) may restrict the types of lawn ornaments property owners can display or where certain types of activities can be held on the property.
A leasehold estate is one in which the property owner (landlord) grants the right to possession to a party called a tenant.
- A tenancy for years is a tenancy for a designated period of time.
- A periodic tenancy is a tenancy for a particular period of time that renews automatically if the landlord fails to terminate it.
- A tenancy at will is a open tenancy (has no set period of time) and the landlord or tenant may terminate the tenancy at anytime.
- Tenancy at sufferance occurs when a tenant remains on the property after the right of possession has ended and without the landlord's consent.
To review, read section Real Property.
Unit 5 Vocabulary
This vocabulary list includes terms that might help you with the review items above and some terms you should be familiar with to be successful in completing the final exam for the course.
Try to think of the reason why each term is included.
- real property
- personal property
- tangible personal property
- intangible personal property
- quitclaim deed
- warranty deed
- adverse possession
- fee simple absolute
- fee simple defeasible
- life estate
- tenancy in common
- joint tenancy
- tenancy by the entirety
- tenancy for years
- periodic tenancy
- tenancy at will
- tenancy at sufferance