Bài giảng Business Law - Chapter 24: Real Property

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin5Personal Property and BailmentsReal PropertyLandlord and TenantEstates and TrustsInsurance LawPropertyPARTReal PropertyPAETRHC24Study how a society uses its land, and you can come to pretty reliable conclusions as to what its future will be.E.F. Schumacher, Small is Beautiful (1973)Learning ObjectivesDefine real property and describe the scope of related rights and interestsDistinguish the forms of real property ownership and how transfer occursExplain the process of acquiring real property and relevant deedsDiscuss government control of real property and constitutional limitsThe law of real property concerns the ownership, acquisition, and use of landReal property includes not only land but also things firmly attached to or embedded in land:BuildingsTrees, crops, and other vegetationWater and groundwaterMineralsAirspace aboveOverviewA fixture is personal property that has become attached to or connected to real property in such a way that it ceases being personal property and becomes part of the real propertyFixturesFixtures belong to real property owner Chevron U.S.A., Inc. v. Sheikhpour: underground fuel storage tanks were fixturesAttachmentIf firmly attached to real property so it cannot be removed without damaging property, the item is likely to be a fixtureAdaptationWhen an item would be of little value except for use with real property, item likely to be a fixtureIntentJudged by what the circumstances indicate as intended not person’s subjective intentFactors To Determine Status as FixtureAn exception to the usual fixture rules involve trade fixtures, which are personal property attached to leased premises by a tenant for the purpose of carrying on the trade or businessTrade fixtures remain tenant’s personal property and may be removed at lease endTrade FixturesEstate is used to describe a person’s ownership interest in real propertyClassified as either freehold or nonfreeholdFreehold estates are ownership interests of uncertain durationNonfreehold (or leasehold) estates are those held by persons who lease real propertyCo-ownership of real property exists when two or more persons share same ownership interest in propertyEstates in LandAn easement is the right to make certain use of another person’s property (affirmative easement) or to prevent another from making certain uses of his own property (negative easement)Easements may be acquired by grant, reservation, prescription, or implicationEasementA profit is a right to enter another’s land and remove some product or part of landA license is a temporary right to enter another’s land for a specific purposeProfit & LicenseThe tenant who planted the cotton crop has a profit, the combine crew has a license to pick cotton Real estate owners may create agreements that restrict use of real property called restrictive covenantsCovenants “run with the land” and bind subsequent owners of the propertyEnforceability of covenants depends on purpose, nature, scope of restrictionsRestrictive CovenantsTitle to real property may be acquired by purchase, gift, will or inheritance, tax sale, and adverse possessionAdverse possession occurs when person wrongfully occupies land and acts in open and hostile manner as if he were the ownerTrue owner must take steps within a statutory time limit to eject possessor from the land or forever lose the right to eject the possessorAcquisition of Real PropertyContracting with real estate broker to locate buyerNegotiating and signing a contract of saleArranging for financing of the purchase and other requirements (e.g., conduct a survey or acquire title insurance)Closing the sale, primarily involving payment of purchase price and transfer of the deedRecording the deedSteps for Sale & PurchaseA quitclaim deed conveys whatever title the grantor has at the time he executes the deedContains no warranty of titleA warranty deed contains covenants of warranty about the titleTwo types: general and specialA deed of bargain and sale (grant deeds) grantor makes no covenants about the titleTypes of DeedsIn a title opinion, an attorney examines the abstract of title and gives an opinion whether grantor has marketable titleMarketable title: title free from defects or reasonable doubt about its validity Abstract of title: history of what public records show about the passage of title to, and other interests in, a parcel of real propertyNot a guarantee of good titleMethods of Assuring TitleUnder the Torrens system of registration (in a few states), one who owns land in fee simple obtains a certificate of titlePurchasing a policy of title insurance is the preferred and most common means of protecting title to real propertyTitle insurance obligates insurer to reimburse insured for loss if the title proves defectiveMethods of Assuring TitleOver the last century, an implied warranty of habitability developed that guarantees the house is free of hidden defects rendering it unsafe or unsuitable for human habitationSimilar to implied warranties for sale of goodsSeller may be liable for damages if seller breaches the implied warrantyDamages measured by either the cost of repairs or the loss in value of the houseResidential Property Premises liability refers to negligence cases in which property owners or possessors (such as business operators leasing commercial real estate) are held liable to persons injured while on the propertyNegligence: failure to exercise reasonable care to keep the property reasonably safeGenerally includes duty to take reasonable security precautions to protect persons lawfully on premises from foreseeable wrongful (including criminal) acts by third partiesPremises Liability Enacted to eliminate long-standing patterns of discrimination against disabled persons in employment, access to public services, and access to business establishments and similar facilities open to the public, ADA’s Title III focuses on places of public accommodationRequires property owners and possessors to take reasonable steps to make property accessible to disabled persons Americans with Disabilities ActSociety imposes duties on landowners by nuisance, zoning, & eminent domain lawsNuisance refers to the lawsuit that may be filed if a property use unreasonably interferes with another person’s ability to use or enjoy her own propertyLand Use Control: Nuisance The Fifth Amendment to the Constitution guarantees that private property shall not be taken for public use without “just compensation” This implies the government’s power of eminent domain to effect the takingThe key is “just compensation”Eminent domain is controversial, perhaps more so given the Kelo decisionLand Use Control: Eminent DomainNormally, zoning ordinances divide a city or town into various districts and specify or limit the uses to which property in those districts may be putSingle-family or high-density residential uses, or commercial, light industry, or heavy industry usesRestrictions on building height, building footprint, and distance buildings must be from lot lines (setback regulations)Land Use Control: Zoning A zoning ordinance is prospective, thus the ordinance may require gradual phasing out of nonconforming uses and buildings that do not fit the general zoning planProperty owners may seek a variance, allowing a deviation from the zoning lawLand Use Control: Zoning Other takings litigation centers around land use regulations that make the use of property less profitable for developmentLandowners challenge application of regulationsIn Nollan v. California Coastal Commission: Conditioning permit on grant of easement was unconstitutional takingRegulatory TakingsThought QuestionsIs the old adage, good fences make good neighbors, as true today as yesterday? What is your opinion of the Kelo decision?