CHAPTER ONE AN INTRODUCTION TO REAL ESTATE INVESTMENTS: LEGAL CONCEPTS.

CHAPTER ONE

AN INTRODUCTION TO REAL ESTATE INVESTMENTS:

LEGAL CONCEPTS

Chapter Objectives

• Define Property Rights and Estates

• Define types of deeds and titles

• Methods of title assurance

• Understand the purpose of a mortgage and a note

Property Rights and Estates

• Real Estate includes land and improvements

that are permanently attached

• Real Estate also includes certain intangible

characteristics known as property rights

(real property)

Property Rights and Estates

• Property rights include the right of a person to:– Possession– Use– Quiet enjoyment (legal term)– disposal

Property Rights and Estates

• Real Estate can include possessory and non-possessory interests– Easements– Mortgage

• Freehold (indefinite time period) and non- freehold (definite time period) estates

Freehold Estates

• Fee simple absolute

• Life estates

• Future life estates– Reversion– remainder

Non Freehold Estates (Leasehold)

• Estate for years

(exact duration)

• Estate from year to year

(period to period)

Assurance of Title and Deeds

• Title is a term used to refer to documents, records, and acts that prove ownership.

• Abstract of title

• Deeds convey title– Grantor and grantee

Assurance of Title and Deeds Continued

• General Warranty Deed

• Special Warranty Deed

• Quitclaim Deed

Assurance of Title and Deeds Continued

• Abstract and Opinion Method

• Title Insurance Method

• Owners Policy

• Lenders Policy

Recording Acts

• Establishes priority among competing claimants

• Senior Mortgages vs. Junior Mortgages

• Mechanics Liens

• Tax Liens

Limitations on Property Rights

• Public Restrictions

• Private Restrictions

• Police Power