13-1 Chapter 21 Law of Property: Real, Personal, and Intellectual

13-2 Definition of real property n Land and everything permanently attached to it. u An item is “attached” if: F removal would cause damage to the property, or F it is essential to the functioning of the structure. n Fixtures u Personal property that is later permanently attached to the realty. u Exception for trade fixtures. n Extent of ownership u Air space u Water rights u Mineral rights

13-3 Interests in real property n Fee simple absolute u Most complete estate one can own. n Conditional estate u Subject to a condition that could terminate the interest. n Life estate u Ownership lasts until death, then passes to another party. u Holder of life estate cannot waste the property. n Future interest u Present ownership of right to possess land sometime in the future.

13-4 Interests in real property (continued) n Leasehold estates u A possessory interest. u Tenant can exclude everyone else, including the landlord. u Sublease. n Easements u Irrevocable right to use a portion of another’s land. u By express agreement. u By prescription. F Created by open use of portion of another’s property for statutory period. u By necessity: when parcel of land is landlocked. n License u Temporary, revocable right to be on someone else’s property.

13-5 Co-ownership n Tenancy in common u Can own unequal shares. u Can sell without consent of other owners. u Interest can be attached by creditors. u Heirs receive interest at death. n Joint tenancy u Each owns an equal share. u Can sell without consent of other owners. u Interest can be attached by creditors. u Other owners receive interest at death. n Tenancy by the entirety u Only for married couples. u Need consent of other owner to sell. u Creditors of only one owner cannot attach the property. u Upon death, ownership passes to other owner. u Upon divorce, becomes tenancy in common.

13-6 Voluntary transfer of real property n A proper deed will: u Identify grantor and grantee. u Express grantor’s intent to convey the property. u Identify type and percentage of ownership. u State price paid. u Describe the physical boundaries of the property. u Specify easements and restrictions, if any. u Identify warranties and promises made by grantor. n Deed must be u executed u delivered u accepted n Recording of deed. u Not required by law. u But should always be done to protect grantee’s interest.

13-7 Types of Deeds n General warranty deed: grantor gives covenant: u of seisen: a promise she owns the title she is conveying. u of right to convey: a promise she has the right to convey her interest. u against encumbrances: promise there are no mortgages or other liens not stated in the deed. u for quiet enjoyment: promise to defend grantee’s title against any challenges. u of further assurances: promise to furnish any necessary documents grantee needs to perfect his title. n Special Warranty deed : Warranties limited to time of Grantors ownership. n Quitclaim deed u Grantor conveys title. u Grantor makes no additional covenants.

13-8 Involuntary transfer of real property n Adverse possession u A person can become the owner of realty that belongs to another if he: F treats realty as his own F openly F without permission of the true owner F for the statutory period of years. n Condemnation u Eminent domain F Government acquires ownership of private property. F For public purpose. F Must pay just compensation.

13-9 Restrictions on land use n Restrictive covenants u Entered into voluntarily by parties. u Agree to use or not use land in particular ways. n Zoning u Restriction of land use. u To allow for orderly growth and development u To protect health, safety, and welfare of citizens. u Variance F Permission to use land in a manner prohibited by the zoning laws. n Other statutory restrictions on land use u Historic preservation

13-10 Personal property n Tangible u material and movable n Intangible u without a physical form n Voluntary transfer of personal property u Title to property F passes when parties so intend. u Transfer by purchase. u Transfer by gift. F Delivery of the gift. F Donative intent. F Acceptance by the donee.

13-11 Personal property (continued) n Involuntary transfer of personal property u Abandoned property F Property discarded by original owner. u Lost property F Owner has accidentally dropped or left somewhere. u Mislaid property. F Owner intentionally placed property somewhere but has forgotten where. n Bailments u One party (the bailor) u transfers possession of personal property u to another party (the bailee). u Might be for benefit of: F the bailor F the bailee F of both (mutual benefit)

13-12 Trademarks n Distinctive mark, word, design, picture or arrangement u used by a seller in conjunction with a product u tending to cause the consumer to identify the product with the producer. n Common law protection. n Registration with U.S. Patent Office. n Infringement. u Likelihood of confusion. u Remedies F Damages F Injunction

13-13 Trade Secrets and Patents n Trade secret u A process, product, method of operation, or compilation of information F that gives a businessperson an advantage over her competitors. u Includes inventions and designs. u Protected from unlawful appropriation F so long as it is kept secret. u Lawful to discover the secret by reverse engineering. n Patents u Legal protection for a: F product, process, invention, machine, or for certain plants. u Must be new and useful. u Cannot be used for F tying arrangements F cross-licensing

13-14 Copyrights n Protection for expression of creative ideas. u Lasts for life of creator plus 50 years. n Such works as: u books u periodicals u musical compositions u motion pictures u art u computer programs n Infringement n Fair use u For criticism, comment, news, teaching, research.