Focus Group - Laserfiche WebLink

Home

.. 10wnership of Real pr!rty e ..yr'- The unique nature of real estate has given rise to a unique set of laws and rights. Even the simplest of real estate transactions brings into play a body of complex laws, and licensees must understand not only the effect of the law but also how the law defines real property. Real property is often described as a bundle of legal rights. In other words, a purchaser of real estate is actually buying the rights of ownership held by the seller. The rights of ownership (see Figure 2.2) include the right of possession, the right to control the property within the framework of the law, the right of enjoyment (to use the property in any legal manner), the right of exclusion (to keep others from entering or using the property) and the right of disposition (to sell, will or otherwise dispose of the property). The concept of a bundle of rights comes from old English law. When the populace could not commonly read and write, a seller transferred property by giving the purchaser a bundle of bound sticks from a tree on the property. This process was referred to as a livery of seisin. The purchaser who held the bundle also owned the tree from which the sticks came and the land to which the tree was attached. Because the rights of ownership can be separated and individually transferred, the sticks became symbolic of those rights. A person who acquires real estate owns the property subject to any rights the seller retains and also to any right in the property that other persons have or acquire. For example, a person may sell real estate while retaining the rights to certain mineral or natural resources located on or beneath the surface of the land. Likewise, a lending institution that holds a mortgage on real estate has the right to force a sale of the property if the loan is not repaid. The various rights in real es.tate will be discussed in detail throughout the text. Buying or selling real estate is usually the biggest financial transaction of a person's life. The buyer typically pays out more cash, undertakes more debt and has a deeper personal interest in this transaction than in any other purchase made during his or her lifetime. The real estate also is likely to have been the seller's biggest single investment in terms of money and work. Although there are people for whom the sale or purchase of real estate is a routine matter, for most it is a very important, emotional and complicated affair. Therefore the real estate licensees aiding in this transaction must pay strict attention to the applicable laws to ensure successful transfer of the property. Figure 2.2 The Bundle or Legal Rights lModem Real Estate Practice @1991 Pages 10-11 Fillmore W. Galaty, Wellington J. Allaway, Robert C. Kyle Library of Congress Catalog KF2042.R4G34 1990 346.7304'37-dc20 [347.306437]