Washington Real Estate Fundamentals Lesson 1: The Nature of Real Property © 2011 Rockwell Publishing

Property Real vs. personal Two types of property: Real property: Land and anything attached to it. Also called realty. Personal property: Anything that is not real property; usually movable. Also called personalty or chattels. © 2011 Rockwell Publishing

Real Property Bundle of rights Real property ownership includes a bundle of ownership rights, including the right to: Possess Use Enjoy Encumber Will Sell Do nothing at all © 2011 Rockwell Publishing

Real Property Inverted pyramid Imagine a parcel of land as an inverted pyramid. © 2011 Rockwell Publishing

Summary Basic Concepts Real property Personal property Bundle of rights Inverted pyramid © 2011 Rockwell Publishing

Appurtenances Appurtenance: A right or interest that goes along with ownership of real property, but isn’t necessarily a physical part of the property. © 2011 Rockwell Publishing

Appurtenances Air rights Water rights Solid mineral rights Oil and gas rights Support rights © 2011 Rockwell Publishing

Appurtenances Air rights Air rights: Landowner has the right to use the airspace above the property. Subject to restrictions, including: Federal aviation laws Local laws and private restrictions Air rights can be sold separately from land (as with condominiums). © 2011 Rockwell Publishing

Appurtenances Water rights Two systems for allocating water rights: riparian rights system prior appropriation system Either system can be applied both to surface water and to subsurface water. © 2011 Rockwell Publishing

Water Rights Riparian rights system Riparian rights: Right to use water that flows through or adjacent to landowner’s property. Allowed to make reasonable use of water without diminishing the flow. Allowed to use water for domestic purposes on the riparian land. Not allowed to divert water for use on non-riparian land. © 2011 Rockwell Publishing

Water Rights Riparian rights system Two types of water in riparian rights system. Riparian water: Flowing water (river or stream). Littoral water: Standing water (pond, lake, or ocean). © 2011 Rockwell Publishing

Water Rights Appropriative rights Prior appropriation system: Developed to address needs not met by riparian rights system, particularly in arid areas. Appropriative rights have largely replaced the riparian rights system in some states (including Washington). © 2011 Rockwell Publishing

Water Rights Appropriative rights Permit required for appropriative rights. Permit holder can take or divert water from a particular source for a specified reasonable and beneficial use. Example: irrigation Permit holder does not have to own land beside the water source. © 2011 Rockwell Publishing

Appurtenances Solid mineral rights Mineral rights: Landowner has right to extract any solid minerals located within property’s inverted pyramid. © 2011 Rockwell Publishing

Appurtenances Solid mineral rights Minerals are: real property when in the ground personal property once extracted and brought to the surface © 2011 Rockwell Publishing

Appurtenances Oil and gas rights Rule of capture: Special rule for oil and gas. Landowner owns all oil and gas produced from (captured by) wells on her property. © 2011 Rockwell Publishing

Appurtenances Support rights Support rights: Natural support provided to a piece of land by the surrounding land. Subjacent support: Provided by underlying earth. Lateral support: Provided by adjacent land. © 2011 Rockwell Publishing

Summary Appurtenances Air rights Water rights Riparian rights Littoral rights Appropriative rights Mineral rights Rule of capture Support rights © 2011 Rockwell Publishing

Attachments Attachments: Things that are permanently attached to land. May be natural or man-made. Are ordinarily considered part of the real estate. © 2011 Rockwell Publishing

Attachments Natural attachments Natural attachments: Trees, bushes, and other plants; growing things that are attached to the land by roots. Includes plants cultivated by people as well as plants growing naturally. Transfer with the land unless otherwise agreed. © 2011 Rockwell Publishing

Natural Attachments Doctrine of emblements Doctrine of emblements: Special rule for crops planted by tenant farmer. Applies when tenancy for indefinite period terminates through no fault of tenant. Tenant is allowed to return and harvest crop after tenancy has ended. © 2011 Rockwell Publishing

Natural Attachments Severance Once severed from the land, natural attachments become personal property. For example, timber becomes personal property when it’s cut down. Standing timber subject to a contract of sale or crops sold before harvest are considered constructively severed. © 2011 Rockwell Publishing

Attachments Fixtures Fixtures: Man-made attachments to real property. Items that were once personal property. Now attached to or connected with real property in such a way that they have become part of the real property. Example: Lumber is personal property; fence is real property. © 2011 Rockwell Publishing

Attachments Fixtures vs. personal property Written agreement determines whether item is treated as fixture or personal property. If no written agreement, four legal tests applied: method of attachment adaptation to the property intention of the annexor relationship of the parties © 2011 Rockwell Publishing

Fixture Tests Method of attachment test Is the item attached to the realty in some way, and if so, how? Is the item movable? © 2011 Rockwell Publishing

Fixture Tests Adaptation test Has the item been specially adapted to the realty in some way, or specially designed for it? © 2011 Rockwell Publishing

Fixture Tests Intention test Did the person who installed (annexed) the item intend it to become part of the realty? © 2011 Rockwell Publishing

Fixture Tests Relationship test Did the person who installed the item own the property, or was he just a tenant? An item installed by a tenant is usually considered personal property. An item installed by an owner is usually considered real property. © 2011 Rockwell Publishing

Fixture Tests Trade fixtures Trade fixtures: Equipment and other items that commercial tenant installs to do business. Generally remain tenant’s personal property, no matter how they’re attached. Tenant may have to restore property to original condition after removal of trade fixtures. © 2011 Rockwell Publishing

Attachments Manufactured homes New manufactured home is considered personal property and has a title like a motor vehicle. Manufactured home may become real property through a process called title elimination. © 2011 Rockwell Publishing

Attachments Manufactured homes After manufactured home’s title is eliminated: home is part of the real property on which it is located transferred and taxed as real property After title eliminated, a real estate licensee may sell the home (otherwise, must have a manufactured home dealer’s license). © 2011 Rockwell Publishing

Summary Attachments Attachment Natural attachment Doctrine of emblements Fixture Fixture tests Trade fixture Manufactured home Title elimination © 2011 Rockwell Publishing

Methods of Legal Description When real property is transferred, land being conveyed must be clearly identified. Precise description of a piece of land is called the legal description. Three main methods of legal description: metes and bounds government survey lot and block © 2011 Rockwell Publishing

Methods of Legal Description Metes and bounds Metes and bounds description: Describes a piece of land by specifying its boundaries. Monuments: Natural or man-made objects that mark a fixed point. Courses: Compass directions. Distances: Length of each boundary. © 2011 Rockwell Publishing

Metes and Bounds Descriptions How they work Starts with a point of beginning, then gives the course (direction) and distance for each leg of the boundary, until it has described the full circuit and arrived back at the point of beginning. © 2011 Rockwell Publishing

Metes and Bounds Descriptions Example “Beginning at the old oak tree, go South 15° East 200 feet. Then go North 90° West 310 feet, more or less, to the centerline of Smith Creek. Then go northwesterly along the centerline of Smith Creek to a point due west of the old oak tree. Then go North 90° East 430 feet, more or less, to the point of beginning.” © 2011 Rockwell Publishing

Methods of Legal Description Government survey Government survey description: Property identified by location in a section, township, and range on a U.S. government survey map. Also called rectangular survey description. © 2011 Rockwell Publishing

Government Survey Descriptions Grid system Government survey system is made up of a series of very large survey grids covering much of the U.S., including Washington. © 2011 Rockwell Publishing

Government Survey Descriptions Principal meridian & base line Each grid has its own: principal meridian (main north-south line) base line (main east-west line) © 2011 Rockwell Publishing

Government Survey Descriptions Principal meridian & base line Each grid identified by name of principal meridian. In Washington: Willamette Meridian © 2011 Rockwell Publishing

Government Survey Descriptions Range & township lines Each grid has grid lines running parallel to principal meridian and parallel to base line at intervals of six miles. © 2011 Rockwell Publishing

Government Survey Descriptions Range & township lines North-south lines, called range lines, divide the land into columns called ranges. Each range is six miles wide. © 2011 Rockwell Publishing

Government Survey Descriptions Range & township lines East-west lines, called township lines, divide the land into rows called township tiers. © 2011 Rockwell Publishing

Government Survey Descriptions Townships Each individual square is called a township. Particular township identified by its position in relation to base line and principal meridian. 6 miles × 6 miles 36 square miles Township = © 2011 Rockwell Publishing

Government Survey Descriptions Townships This township: “Township 4 North, Range 5 East.” It’s the township created by the intersection of the fourth township tier north of the base line and the fifth range east of the principal meridian. © 2011 Rockwell Publishing

Government Survey Descriptions Complete description Complete government survey description must include section, township, and range. Name of principal meridian must also be included, to identify grid. Example: N ½ of NE ¼ of SE ¼, T4N R3D, Willamette Meridian, Clark County, State of Washington © 2011 Rockwell Publishing

Government Survey Descriptions Sections Each township is divided into 36 sections. Each section is one mile on each side, or one square mile. Each section is 640 acres. 1 acre = 43,560 square feet. © 2011 Rockwell Publishing

Government Survey Descriptions Partial sections Most individual parcels are only part of a section, so they are described in terms of fractions of sections. For example, the N ½ of the NE ¼ of the SE ¼. NW1/4 160 ACRES NE1/4 160 ACRES SW1/4 160 ACRES N 1/2 OF NE1/4 OF SE1/4 40 ACRES © 2011 Rockwell Publishing

Methods of Legal Description Lot and block Lot and block description: Standard method for describing property in towns and cities. Property identified by its lot number on a subdivision plat. Plat: Survey map developer must record when land is subdivided. Also called a plat map. © 2011 Rockwell Publishing

Lot and Block Descriptions Plat map Plat map shows precise location and dimensions of each lot. Each lot is assigned a lot number. Groups of lots separated by streets within the subdivision may also be assigned block numbers. © 2011 Rockwell Publishing

Lot and Block Descriptions Example Once plat map recorded, a parcel can be described by giving: lot and block numbers name of subdivision city and/or county “Lot 7, Block 2, in the Lowland Heights subdivision, according to the plat thereof recorded at Vol. 22, Page 16, in the records of Spokane County, State of Washington.” © 2011 Rockwell Publishing

Methods of Legal Description Other methods Other methods of describing land: Reference to description in earlier recorded document. Reference to recorded survey map or tax assessor’s map. Generalized description, such as “all my land in King County.” Street address generally not considered adequate description for legal documents. © 2011 Rockwell Publishing

Summary Methods of Legal Description Metes and bounds method Monuments, courses, distances Government survey method Section, township, and range Principal meridian and base line Lot and block method Plat map © 2011 Rockwell Publishing