1. Prentice Hall © 20051 PowerPoint Slides to accompany The Legal Environment of Business and Online Commerce 4E, by Henry R. Cheeseman Chapter 23 Personal and Real Property

2. Prentice Hall © 20052 Two Kinds of Property Personal Property that consists of tangible property, such as automobiles, furniture, and jewelry, and intangible property, such as securities, patents, and copyrights Real The land itself as well as buildings, trees, soil, minerals, timber, plants, and other things permanently affixed to the land

3. Prentice Hall © 20053 Acquisition of Personal Property Possession Purchase or production Gift Will or inheritance Accession Confusion Divorce

4. Prentice Hall © 20054 Ownership Rights in Mislaid, Lost, and Abandoned Property Mislaid property Owner of premises where property is mislaid is entitled to possession He or she holds it as an involuntary bailee until the owner reclaims it Lost property Finder acquires title to the property against the whole world except the true owner Owner may reclaim his or her property from the finder Abandoned property Finder acquires title to the property, even against its original owner

5. Prentice Hall © 20055 Elements Necessary to Create a Bailment Bailor Bailee Goods transferred for safekeeping or storage Elements necessary to create a bailment: Personal property Delivery of possession Bailment agreement

6. Prentice Hall © 20056 Types of Bailments Ordinary bailments For the sole benefit of the bailor For the sole benefit of the bailee For the mutual benefit of the bailor and bailee Special bailments Common carriers Warehouse companies Innkeepers

7. Prentice Hall © 20057 Bailees and Bailors Bailee’s rights Exclusive possession of the bailed property Use of the bailed property, or Compensation for work done or services provided Bailor’s duties Pay agreed-upon compensation to bailee Not to interfere with bailee’s possessory interest Notify bailee of any defects in the bailed property

8. Prentice Hall © 20058 Special Bailees Common carriers Warehouse companies Innkeepers

9. Prentice Hall © 20059 What is Real Property? The land itself as well as buildings, trees, soil, minerals, timber, plants, and other things permanently affixed to the land

10. Prentice Hall © 200510 Freehold Estates Fee simple defeasible Grants owner all of the incidents of a fee simple absolute except that it may be taken away if a specified condition occurs or does not occur Life estate Interest in property for the life of a specified person A life estate terminates upon the death of the named person and reverts back to the grantor or his or her estate or other designated person

11. Prentice Hall © 200511 Freehold Estates Fee simple absolute Highest form of ownership of real property Ownership is infinite in duration, has no limitation on inheritability, and does not end upon the occurrence or nonoccurrence of any event

12. Prentice Hall © 200512 Future Interests Future interest The interest that the grantor retains for himself or herself or a third party Reversion Right to possession of real property returns to the grantor after the expiration of a limited or contingent estate Remainder Right to possession of real property goes to a third person upon the expiration of a limited or contingent estate

13. Prentice Hall © 200513 Concurrent Ownership Joint tenancy Deceased tenant’s interest automatically passes to co- tenants Tenant may transfer his or her interest without consent of co-tenants; transfer severs joint liability Tenancy in common Deceased tenant’s interest passes to his or her estate Tenant may transfer his or her interest without the consent of co-tenants; transfer does not sever tenancy in common

14. Prentice Hall © 200514 Concurrent Ownership Tenancy by the entirety Deceased tenant’s interest automatically passes to his or her spouse Neither spouse may transfer his or her interest without the other spouse’s consent Community property Surviving spouse automatically receives 1/2 of community property; other 1/2 passes to heirs Neither spouse may transfer his or her interest without the other spouse’s consent

15. Prentice Hall © 200515 How Ownership of Real Property Is Transferred Sale Tax sale Gift, will, or inheritance Adverse possession

16. Prentice Hall © 200516 Deeds and Recording Statutes Deed A writing that describes a person’s ownership interest in a piece of real property Recording statute A state statute that requires the mortgage or deed of trust to be recorded in the county recorder’s office of the county in which the real property is located

17. Prentice Hall © 200517 Nonpossessory Interests in Real Property Easement appurtenant Easement over a servient estate that benefits a dominant estate Easement runs with the land Easement in gross Easement that grants a person a right to use another’s land Does not run with the land

18. Prentice Hall © 200518 Nonpossessory Interests in Real Property License Grants a person the right to enter upon another’s real property for specified event or time Profit Grants holder the right to remove something from another’s real property

19. Prentice Hall © 200519 What Is a Landlord-Tenant Relationship? A relationship created when the owner of a freehold estate (landlord) transfers a right to exclusively and temporarily possess the owner’s property to another (tenant)

20. Prentice Hall © 200520 Types of Tenancies Tenancy for years Continues for the duration of the lease and then terminates automatically without notice Does not terminate on the death of either party Periodic tenancy Continues from payment interval to payment interval May be terminated by either party with adequate notice Does not terminate on the death of either party

21. Prentice Hall © 200521 Types of Tenancies Tenancy at will Continues at the will of the parties and may be terminated by either party at any time with adequate notice Terminates on the death of either party Tenancy at sufferance Arises when a tenant wrongfully occupies real property after the expiration of another tenancy or life estate Continues until the owner either evicts the tenant or holds him or her over for another term Terminates on the death of the tenant

22. Prentice Hall © 200522 Landlord’s Duties To deliver possession of the leased premises Duty to deliver possession Duty not to interfere with tenant’s right to quiet enjoyment To maintain the leased premises Building codes Implied warranty of habitability Duty of reasonable care to tenants and third parties not to cause them injury

23. Prentice Hall © 200523 Tenant’s Duties Duty to pay rent Duty not to use leased premises for illegal or nonstipulated purposes Duty not to commit waste Duty not to disturb other tenants Duty of reasonable care to persons who enter upon the leased premises

24. Prentice Hall © 200524 Transferring Rights to Leased Property Assignment of the lease A transfer by a tenant of his or her rights under a lease to another Assignor The party who transfers the rights Assignee The party to whom rights have been transferred

25. Prentice Hall © 200525 Transferring Rights to Leased Property Sublease When a tenant transfers only some of his or her rights under the lease Sublessor The original tenant in a sublease situation Sublessee The new tenant in a sublease situation

26. Prentice Hall © 200526 Regulation of Land Use Private Private nuisance Restrictive covenants Public Public nuisance Zoning Eminent domain