1 Chapter 3
CHAPTER 3: Rights and Interests in Land
I. Discuss the history of the Feudal and A1lodial Discuss the unique characteristics of allodial
ownership in
Systems America.
This is a good time to be patriotic in your
presentation!
A. Define Feudal System
B. Define Allodial System Individuals were given the right to own land.
II. Discuss and define Government Rights in Land Discuss why the government has an interest in
property
A. Property Taxes and bring out the fact that this isn’t necessarily
bad.
B. Eminent Domain
C. Police Power Have students research the web for current issues.
D. Escheat
III. Generally discuss Protecting Ownership Emphasize how fee simple can be encumbered
but still be
IV. Define Fee Simple transferable.
V. Define Encumbrances as they relate to title
A. Discuss Easements as rights to use, then
define and discuss
1. Easement Appurtenant
2. Easement in Gross
3. Party Wall Easements
4. Easement Termination
5. Encroachment
6. Deed Restrictions Emphasize the private versus governmental
approach to
B. Define and discuss these various Liens as land-use control.
they apply in your state
1. Property Tax Lien
2. Mechanic’s Lien
3. judgment Lien
4. Mortgage Lien
5. Voluntary and Involuntary Liens
6. General and Special Liens
7. Discuss who is the Lienor, Lienee
VI. Discuss Qualified Fee Estates and how they can
be “lost” by breach
VII. Define Life Estates and give examples of use
VIII. Discuss the Statutory Estates Emphasize which of these estates exist in your
state and
A. Dower
their importance as it applies to real estate
sales and title
B. Curtesy
C. Community Property
D. Homestead Protection
IX. Define Freehold Estates
X. Define Leasehold Estates and give examples
A. Estates for Years
Have the class list the nine community property states.
Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin
This chapter provides general and legal information concerning rights and interest in
land. It begins with a brief discussion of government rights and land, individual rights,
easements, encroachments, deed restrictions, and types of liens. Other topics covered in
this chapter include various types of estates, homestead rights, chattels, and subsurface
rights.
Pictorial Summary
Chapter 3 2
XIV. Explain Law Sources
A. Common Law
B. Statutory Law
XV. Pictorial Summary and how they apply to real
estate This is an excellent time to discuss the
chart on A. Surface Right of Entry interests in real
estate. Have the students highlight all B. Land Lease
those interests transferred in an average home
C. Condominium Lots transfer.
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33 33
34 33
34 33
35 34
Topic
Opening Remarks
Government Rights in
Land
Property Taxes
Eminent Domain
35 35 Police Power
36 35 Escheat
37 36 Encumbrances
38 48 Easement
Appurtenant
40 39
40 40
Teaching Tips
Start this chapter by asking students if they can think of any
enterprise that does not involve real estate in some way.
Memory Hook: Use the acronym PETE.
P=Police Power
E=Eminent Domain
T=Taxes
E=Escheat
Reference: The computation and application of property taxes is
addressed in Chapter 15. Bring local and state tax rates to class.
Common Misconception: Many students think eminent domain
and condemnation are synonymous terms. They are not. Stress:
Eminent Domain is the right to take privately owned property for
public use, upon the payment of “just” compensation.
Condemnation is the procedure for taking privately owned property.
Reference: Police power and more specifically, zoning and building
codes, is addressed in detail in a later chapter on land-use control.
Local Distinction: Emphasize the entity to whom escheated prop-.
erty, both real and personal, goes in your state. Consult a banker
regarding abandoned deposits.
Stress: All encumbrances are not bad. For example, unpaid but not
yet due property taxes and current but outstanding mortgage loans
and deed restrictions are encumbrances. Encumbered property can
be conveyed subject to the outstanding encumbrance (s).
Expanding the Text: The term appurtenance refers to any right or
privilege which belongs and passes with the land. Appurtenant
easements “run with the land.” Also, a servient tenement holds a
possessory interest because he can continue to use the property over
which the easement lies so long as such use is consistent with the
purpose of the easement. A dominant tenement holds a
nonpossessory interest.
Expanding the Text: If an easement in grass is a personal right, it is
neither assignable nor inheritable and terminates upon the death of
the one holding the easement. A commercial easement usually may
be assigned, sold, or devised.
Common Misconception: Many students think that all encroach–
ments are visible. Point out that tree roots as well as tree limbs
Easement in Gross
can encroach.
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40 40 Deed Restrictions Local Distinction: Consult local real estate attorneys for common
and unusual deed restrictions specific to your area. Note that the
more exclusive the community, generally the more restrictive the
covenants.
Unusual Examples:
1. Exterior paint colors must coordinate.
2. Using cost of construction as the basis for controlling mini
mum house size. (This was common in the late 1940s to the
late 1960s. )
3. Each vehicle must be moved at least once during each 48-hour
period. (This is to deter the paring of RVs and junk cars.)
4. Trash containers must be stored underground.
41 41 Liens Stress: Liens are always monetary. Also, emphasize the lien
recorded first usually has highest priority, but property taxes are
always superior to other liens.
Common Misconception: Not all encumbrances are liens,
although all liens are encumbrances.
41 41 Mechanic’s Lien Local Distinction: Provide the class with information regarding
your state’s mechanic’s lien statutes. Contact your local court
house, register of deed, clerk of court, or an attorney for the
procedures.
Also, based on your state statute, provide the class with several
caveats, e.g., have a written contract from a builder or one who
remodels which provides that the contractor sign a lien waiver
prior to settlement.
42 42 Judgment Lien Local Distinction: Share with the class the life of a judgment in
your state. Contact your local courthouse.
43 43 Qualified Fee Estates Expanding the Text: Qualified fees may also be called deter–
minable, conditional or defeasible fees. Ask an attorney which
term is used in your area.
Local Distinction: Consult a real estate attorney or recorder of
deeds for local unusual examples.
Stress: Violated fee simple determinable estates automatically
revert to the grantor of other named party.
Violated fee simple subject to condition subsequent estates must be
retaken.
43 43 Life Estates Stress: Life estates cannot be for a definite period of time, but are
indefinite, for the duration of one’s life.
44 44 Statutory Estates Local Distinction: Be sure to address your state’s position on each
of these estates.
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45 46 Freehold Estates Stress: Freehold estates are created when one acquires title to real
property (ownership).
46 46 Leasehold Estates Stress: Leasehold estates are created when one acquires the right
to possession of real property (rental).
46 46 Estate for Years Stress: There is a known specific starting and termination date.
Examples: A six-month lease, beginning February l and ending
August 31.
Also, a visiting professor rents from May 25 to August 15.
Also, a resort rental from 3:00 p.m. Saturday to the following
Saturday at 10:00 a.m.
46 47 Periodic Estate Stress: There is a starting date but no specific expiration date.
However, no changes can be made by either landlord or tenant.
Examples: A room may be rented from week to week.
Grazing land may be rented from year to year.
46 47 Estate at Will Stress: The duration of the lease is unknown and indefinite.
Example: “You may rent until I sell.”
47 47 Tenancy at Sufferance Stress: The tenancy is created when a tenant continues to occupy
a property, i.e., holdovers, without the landlord’s permission.
47 47 License Examples: Permission to enter to hunt or to pick strawberries.
These licenses are revocable, just as a driver’s license is.
52 50 Wrap-Up 1. Name the four Government Rights: (Police Power, Eminent
Domain, Taxes [property], Escheat)
2. What is an encumbrance? (A liability that limits fee simple
title.)
3. What is an easement? (A right one has to use the land of
another.)
4. An easement is an encumbrance? (True)
5. What is an encroachment? (The intrusion of one’s real property
onto the land of another.)
6. Are qualified estates also fee simple? (No, they are limited fees.)
7. Freehold estates reflect ownership? (True)
8. Name the four leasehold estates. (estate for years, periodic
tenancy, estate at will, tenancy at sufferance)
Class Activity Have students bring in their deeds or leases. Examine to find
encumbrances, especially the unusual. What kind of leaseholds?
Inject a bit of humor by noting that probably no one in the class
is a tenant at sufferance. Also use internet as resource.Have students
circle the interests on the chart (Fig. 3.5) that affect their home.