1. Property Law

Property Law

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Topics: Learning Material

Introduction to Property Law
This chapter explores the legal concept of property, property interests, and ownership. It explains the role of government in the recognition of property rights and the justification for doing so. It introduces several types or classifications of property and rights of possession. It explains the legal system for recording ownership interests in real and personal property. It also explains the relationship between individuals holding or claiming an interest in property. Lastly, it identifies the government’s authority to affect an individual’s property rights. For further written and video explanation, discussion and practice questions, see Property Law (Intro)

Tangible and Intangible Property
  • Tangible - anything that can be physically touched.
  • Intangible - non-physical property.

For further written and video explanation, discussion and practice questions, see Tangible and Intangible property?

Real and Personal Property
  • Real property - land and anything permanently attached to it.
  • Personal property - anything other than real property.

For further written and video explanation, discussion and practice questions, see Real and Personal Property?

What are “Fixtures”?
  • personal property that is converted into real property
  • physical annexation to (attachment to or close association with) the land

For further written and video explanation, discussion and practice questions, see Fixtures?

What is “Ownership”?
  • Ownership - legal recognition of ownership rights.

For further written and video explanation, discussion and practice questions, see What is "ownership"?

Role of Government in Property Law
  • Establish laws concerning property.
  • Enforces property ownership

For further written and video explanation, discussion and practice questions, see Role of Government in ownership of property?

Property as Economic Incentive
  • Property as an Incentive

⁃ Possess property for one’s benefit

⁃ Exclude others

⁃ Incentivizes individuals to work

⁃ Greater efficiency and economic productivity.

  • Capital Formation

⁃ Employ property toward creating additional property.

⁃ Allows ownership of any resource to be divided among individuals.

For further written and video explanation, discussion and practice questions, see Role of property rights in economic activity?

What is “Accession”?
  • Additions to existing property to modify it.
  • Own the product of labor

For further written and video explanation, discussion and practice questions, see Accession?

What is “Rule of First Possession?”

What is a “Lost or Mislaid” item?
  • Abandonment
  • Superior claim of right

For further written and video explanation, discussion and practice questions, see Lost or Mislaid Items?

What is “Adverse Possession”?
  • Open
  • Notorious
  • Actual
  • Exclusive
  • Continuous
  • Wrongful
  • Statutory Period

For further written and video explanation, discussion and practice questions, see Adverse Possession?

Ownership by “Contract”
  • Exchange of value
  • Express or Implied
  • Formalize Obligation

For further written and video explanation, discussion and practice questions, see Contracts?

Ownership by “Gift”
  • One way transfer of value
  • Delivery and Acceptance

For further written and video explanation, discussion and practice questions, see Gift?

Ownership through “Confusion”
  • amalgam of property to which the contributors have a claim.
  • withdraw her property, but not receive the exact same property contributed.

For further written and video explanation, discussion and practice questions, see Confusion?

Transferring Real Property
  • Subject to an instrument of title - “deed”.
  • Quitclaim Deed
  • Warranty Deed
  • Bargain and Sale Deed
  • Grant Deed

For further written and video explanation, discussion and practice questions, see Establishing and transferring ownership in real property?

What is “Fee Simple?”
  • Maximum ownership interest in real property
  • Full legal rights and powers to possess, use, and transfer the land.
  • Fee Simple Absolute
  • Fee Simple Defeasible

For further written and video explanation, discussion and practice questions, see What is a "fee simple" interest in real property?

What is a “Life Estate in Real Property?
  • Temporary transfer of ownership interest.
  • For the life of the transferee or some other third-party
  • Reversion
  • Remainder

For further written and video explanation, discussion and practice questions, see What is a "life estate" in real property?

What is a Leasehold Estate in Real Property?
  • Property rights granted to a tenant by a landlord.
  • Limited rights for a limited term.
  • Cannot materially change the property
  • Fixtures become party of property.

For further written and video explanation, discussion and practice questions, see What is a "leasehold estate" in real property?

Types of Co-Ownership of Real Property
  • Joint Tenancy
  • Tenancy in Common
  • Tenants by the Entirety

For further written and video explanation, discussion and practice questions, see What are common types of co-ownership relationships in real property?

”Community Property” and “Separate Marital Property”
  • property held by a married couple
  • classified as “marital property” or “separate property”.
  • “common law” rule
  • “community property” rule.

For further written and video explanation, discussion and practice questions, see Community Property and Separate Marital Property?

What is a “Easement”?
  • Limited interest in property to use the subject property in a particular manner
  • Express Easement
  • Affirmative & Negative easements
  • Appurtenant & In-Gross Easement
  • Natural Easement (Easement by Necessity)
  • Easement by Prescription (Adverse possession)

For further written and video explanation, discussion and practice questions, see What is an "easement" interest in real property?

License of Property
  • Grant of the right to use real or personal property.
  • Not a true property interest.
  • Will have a definite (limited) term

For further written and video explanation, discussion and practice questions, see What is a license of real or personal property?

What is a “Bailment”?
  • Owner of personal property gives the property to another person to hold or do something specific with it.
  • Bailor
  • Bailee

For further written and video explanation, discussion and practice questions, see What is a "bailment"?

Unilateral vs Mutual Benefit Bailments
  • Types of Bailment

Unilateral Benefit Bailment

Mutual Benefit Bailment

  • Rights

Bailor Rights

Bailee Rights

  • Duties

Bailor Duties

Bailee Duties

  • Standard of Care in Duties

Bailor - The bailor must take reasonable care to protect the bailee from known risk in the bailment.

Bailee

Unilateral Benefit

Mutual Benefit

For further written and video explanation, discussion and practice questions, see What are the rights and duties in "unilateral-benefit" and "mutual benefit" bailments?

Limits on Property Rights
  • Federal government - regulate interstate commerce.
  • State and locals government - police power to protect the health, safety, morals, and general welfare.

For further written and video explanation, discussion and practice questions, see What are the limitations on property ownership rights?

What is “Nuisance”?
  • Public Nuisance
  • Private Nuisance

For further written and video explanation, discussion and practice questions, see What is nuisance?

What is “Zoning”?
  • Local (city or county) ordinances
  • Control how property within specific areas can be used.
  • Residential, commercial, or industrial use.
  • Non-conforming Use Exemption
  • Variance

For further written and video explanation, discussion and practice questions, see What is Zoning?

What is “Eminent Domain”?
  • Power granted local, state, and Federal Governments under the Takings Clause of the 5th Amendment.
  • Take property from private citizens
  • Must be for a “public purpose” a
  • Government must provide “just compensation”

For further written and video explanation, discussion and practice questions, see What is Eminent Domain?

What is “Property Taxation”?
  • Direct tax on the real and personal property
  • Often fund local schools, police, and county administration.

For further written and video explanation, discussion and practice questions, see What is Property Taxation?


Flash Cards - Study Practice

Q1
_________ is any tangible or intangible physical item, design, creative work, or concept that is owned.

Q2
_________ is anything that can be physically touched.

Q3
_________ is land and anything permanently attached to it.

Q4
_________ is personal property that is converted into real property by physical annexation to (attachment to or close association with) the land or its buildings.

Q5
________ of property refers to the legal right to exclude others from the specific thing owned.

Q6
Property is a bundle of rights associated with all physical and non-physical things. True or False

Q7
Aside from the right to exclude others from using property, ownership rights often include:

A7
The right to possess the property, The right to use the property, The right to transfer the property, The right to commercialize the property

Resource Video: https://thebusinessprofessor.com/ownership-in-the-context-of-property-rights/

Q8
The government establishes and enforces property ownership rights through a formalized system for recording and disclosure that puts others on notice of those rights. True or False

Q9
Without government recognition and enforcement of property rights, ownership rights would be synonymous with possession or control of the property. True or False

Q10
Providing a system whereby individuals may acquire property incentivizes those individuals to work toward that end. True or False

Q11
Some individuals are willing to work longer and harder incentivized by the amount of property they are able to acquire as a result of their efforts. True or False

Q12
Allowing for property rights of individuals often results in LOWER efficiency in effort and overall LESS economic productivity. True or False

Q13
Property rights allows for _____________, which is the ability to employ that property toward creating additional property.

Q14
The nature of property allows ownership rights in any resource to be divided among individuals and to employ their resources collectively in the creation or acquisition of new property. True or False

Q15
___________ refers to additions to existing property to modify it in a way that results in new property.

Q16
___________ states that the first person to reduce previously un-owned things to her possession becomes its owner.

Q17
Things that are lost may also acquire a new owner through possession. True or False

Q18
For lost property to transfer to another person, the holder must:

A18
Advertise having found the property in an effort to notify the original owner, and The original owner fails to claim the lost item

Resource Video: https://thebusinessprofessor.com/laws-for-lost-mislaid-and-abandoned-items/

Q19
The finder of lost or mislaid property may retain the item and claim ownership by demonstrating ________________.

A19
an unequivocal intent to abandon the property

Resource Video: https://thebusinessprofessor.com/laws-for-lost-mislaid-and-abandoned-items/

Q20
________________ is a situation where someone legally gains ownership or title to someone else’s property by wrongfully claiming rights of use or possession of that person’s land.

Q21
The following are elements that must be present for a statutory period to claim an ownership interest in property through adverse possession:

A21
Open Possession, Notorious Possession, Actual Possession, Exclusive Possession, Continuous Possession, Possession Hostile to the Legal Owner

Resource Videos: https://thebusinessprofessor.com/adverse-possession-explained/

Q22
_____________ are the dominant legal mechanism by which individuals exchange personal property.

Q23
A ___________ is a transfer of ownership from one party to another without the consideration (mutual exchange of value) necessary to establish an enforceable contract.

Q24
A gift normally transfers ownership at the time that the owner:

A24
expresses intent to transfer the property; physically surrenders the property to someone else who accepts it

Resource Video: https://thebusinessprofessor.com/acquiring-ownership-rights-through-gift/

Q25
_________ is a method of acquiring ownership in property that occurs when individuals combine their property in ways that makes it indistinguishable.

Q26
A ____________ is the primary manner of establishing ownership and transferring an interest in land.

Q27
A ________ contains a precise legal description of land and specifies the exact location and boundaries according to a mapping or surveying system.

Q28
Some types of property interest, such as an easement, can be created through a legal document other than a deed. True or False

Q29
__________ is a deed that purports to transfer any ownership that an individual has in the real property, but makes not assurance of ownership.

Q30
In a _____________, the seller warrants that she holds title to the property free and clear of any liens or encumbrances and that she is legally entitled to transfer the property.

Q31
A _____________ deed warrants the title against any defects that have ever existed in the title.

Q32
A _____________ deed warrants the title against any defects caused by or relating to actions or omissions of the seller.

Q33
A _____________ deed that purports to transfer the ownership that an individual has in the real property without warranty.

Q34
________________ is the term used to represent the maximum ownership interest in real property that is allowed under law.

Q35
A fee simple owner has full legal rights and powers to:

A35
Possess the land; Use the land; Transfer the land

Resource Video: https://thebusinessprofessor.com/fee-simple-defined/

Q36
___________ ownership means that all interests in the property are transferred, and there is no limitation or conditions attached to the transfer.

A36
Fee simple absolute

Resource Video: https://thebusinessprofessor.com/fee-simple-defined/

Q37
___________ ownership means that a condition (or multiple conditions) are attached to a transfer of the property. This means that if a certain event occurs, the transfer is undone and the property either reverts back to the original owner or to a third party.

A37
Fee simple defeasible

Resource Video: https://thebusinessprofessor.com/fee-simple-defined/

Q38
A ___________ is a temporary transfer of an ownership interest in real property that is good for the life of the transferee or some other third-party identified in the deed of transfer.

Q39
At the end of the life estate, the land reverts back to the original owner who has a _________ interest.

Q40
At the end of the life estate, the person to whom the property returns has a __________ interest.

Q41
The holder of a life estate has the ability to fully use and enjoy the property; but, s/he cannot cause extraordinary changes to the property or knowingly deplete the property of non-renewable resources (such as digging up minerals). True or False

Q42
A ___________, commonly called a lease, is the property right granted to a tenant by a landlord.

Q43
In a _______________, all owners of the real property are indicated on the title and each owns an equal an undivided interest in the property.

Q44
In a _____________ there is a “right of survivorship” among owners.

Q45
In a _____________ if any owner seeks to sell or transfer her interest in the property, the joint tenancy is broken and the ownership becomes a _________.

A45

Q46
In a _____________, each owner owns a specific percentage of the property, which is separate from other owners’ interest.

Q47
In a ______________, the ownership interest is not unified; rather, it is “divisible”. Any owner can sell her ownership interest and there is no right of survivorship.

Q48
In a ____________, iff the owner passes away, her ownership interest passes to her heirs and assigns. The remaining owners do not acquire the deceased owner’s interest.

Q49
This is a method of joint ownership in property by married spouses, whereby each spouse owns and equal and undivided interest in the real property.

Q50
In a ___________ there is a right of survivorship among spouses, so either spouse will inherit complete ownership of the property when the other spouse passes.

Q51
Generally, property held by a married couple is either classified as ___________ or ______________.

A51
marital property, separate property

Resource Video: https://thebusinessprofessor.com/community-property-vs-separate-property/

Q52
_____________ is owned equally by both spouses and each spouse’s consent must be present to legally sell the property.

Q53
_____________ belongs to one spouse or the other. It does not require the consent of both spouses to sell or transfer.

Q54
There are two systems in the United States for determining whether property is marital or separate - __________ rule and the ___________ rule.

A54

Q55
The ______________ states that marital or separate property is determined by whose name is on the title, who purchases the property, or who receives it as a gift.

Q56
______________ States that all property acquired during the marriage is considered marital property, with the exception of property acquired before marriage, property inherited, or received as a gift.

Q57
A(n) ___________ is a limited interest in real property.

Q58
A ___________ involves a particular right to use the subject property in a particular manner, but does not necessarily create a right to possess the property.

Q59
An ____________ is an easement intentionally granted to another person in writing. It generally arises pursuant to a deed, contract, or testamentary document.

Q60
An ________________ easement grants an individual the right to do something on the subject property.

Q61
A____________ easement restricts an individual from using her land in a certain way, and it generally arises pursuant to a transfer of land whereby the original owner does not want the land used in a specific manner.

Q62
An easement may attach to the land or it may belong specifically to the person. True or False

Q63
An ______________ is an easement that allows an individual to use the subject land. The easement does not attach to the land, rather it is a right held by the individual.

Q64
A(n) ______________ is an easement that attaches to or is a part of the land, rather than owned by an individual. The easement will remain with the property, no matter who owns the property.

Q65
A __________ easement arises when it is necessary for an individual or the public to make use of land located near the property subject to the easement.

A65
natural easement (Easement by Necessity)

Resource Videos: https://thebusinessprofessor.com/easement-or-right-of-way-in-real-property/

Q66
An is obtained by adverse possession, such that an individual who wrongfully uses someone else’s land under the conditions required for adverse possession may pursue a court action to establish ownership rights in the property.

Q67
A _________ is not a true property interest, but is a grant of the right to use real or personal property.

Q68
A license of real property will be limited to a particular holder and it will have a definite (limited) term. True or False

Q69
A license allows for use (without possession) of the real property, and it is similar to an easement in gross. True or False

Q70
A ____________ is a situation where the owner of personal property gives the property to another person to hold or to use in a specific manner.

Q71
The owner who entrusts property to another is called the _________ and the person receiving the property is called the ________.

A71

Q72
An ____________ bailment is pursuant to agreement by the bailor and bailee.

Q73
An ________ bailment is simply a result of the parties’ conduct in holding property on behalf of another.

Q74
A _____________ is a situation where either the bailor or the bailee receives a benefit from the bailment, while the other party does not. This situation may arise as a gift or favor by one party to the other.

Q75
A _____________ provides a benefit to the bailor and bailee. Generally, a mutual benefit bailment is pursuant to an enforceable contract, as there is an exchange of value that is the impetus of the relationship.

Q76
The ________ generally has the right to receive return of the property (or any proceeds derived from disposing of the property).

Q77
The bailee generally has the right to:

A77
possess the bailed item; use the bailed item (unless otherwise limited in the bailment agreement); Compensation for services (if provided for in the bailment agreement); limited personal liability or indemnification by the bailor

Resource Video: https://thebusinessprofessor.com/unilateral-and-mutual-benefit-bailments/

Q78
The bailor and bailee owe specific duties to each other in the bailment relationship. True or False

Q79
The bailor must reveal any defects in the bailed item and warrants that there are no defects in the bailed object that could have been discovered through reasonable inspection. True or False

Q80
A Bailee has an absolute duty to return the object to the bailor or to dispose of it as the bailor directs. True or False

Q81
The bailor and bailee owe duties of care to each other in the bailment relationship. True or False

Q82
The bailor must take reasonable care to protect the bailee from known risks in the bailment relationship. True or False

Q83
In a ___________, the bailee generally must exercise reasonable care in taking care of the bailed property.

Q84
In a ___________, the bailee owes a higher standard of care in carrying out her bailment duties.

Q85
The US Constitution protects individual ownership rights in property. True or False

Q86
The concept of property allows the owner to exclude others from possessing or using that property. True or False

Q87
Laws may limit property by regulating when and how a person can use her property. True or False

Q88
The Federal Government limits the use of property through its power to regulate ___________.

Q89
State and local governments regulate the use of property pursuant to their ________, to protect the health, safety, morals, and general welfare of its citizens.

Q90
_________ is the use of one’s property in a manner that creates a substantial, unreasonable interference with the use or enjoyment of another person’s property.

Q91
__________ arises from use of land that causes a substantial interference with the use and enjoyment of the property by the public at large.

A91

Q92
__________ arises when a person uses her property to substantially interfere with the use and enjoyment of another person’s property.

A92

Q93
___________ refers to local (city or county) ordinances controlling how property within specific areas can be used.

Q94
___________ generally divide areas of counties or municipalities into districts designated for residential, commercial, or industrial use.

Q95
_____________ is the power granted local, state, and federal governments under the Takings Clause of the 5th Amendment.

Q96
This clause allows the various levels of government to take away property from private owners under certain conditions.

Q97
Taking of property pursuant to Eminent Domain must be for a __________ and the government must provide _______________ to the landowner for the taking.

A97
public purpose, just compensation

Resource Video: https://thebusinessprofessor.com/eminent-domain-explained/

Q98
_________ Is a taking of property that includes a physical seizure of the land as well as unduly burdening an individual’s use and enjoyment of her property.

Q99
__________ are a form of direct tax on the real and personal property owned by individuals or businesses.

Q100
__________ are often the primary source of funds for local schools, police, and county administration.

A100
Property taxes (primarily on real estate)

Resource Video: https://thebusinessprofessor.com/taxation-of-real-and-personal-property/


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