Chapter 3 Part I Estates and Interests1 New York Real Estate for Salespersons, 5th e By Marcia Darvin Spada Cengage Learning © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests2 Chapter 3 Legal Issues Part I Estates and Interests © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests3 Chapter 3 Key Terms  Act of waste  Air rights  Beneficiary  Board of directors  Bundle of rights  Chattel  Common elements  Curtesy and dower  Fixture  Holdover tenant  Homestead  IIliquid  Joint venture  Littoral rights © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests4 Chapter 3 Key Terms (continued)  Parcel  Partition  Personal property  Real estate/real property  Remainder interest  Remainderman  Reversionary interest  Right of survivorship  Riparian rights  Severalty  Special purpose real estate  Subsurface rights  Trade fixture  Trustee/trustor © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests5 Chapter 3 Key Terms (continued) Undivided interest Unity of interest Unity of possession Unity of time Unity of title © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests6 Real Property Real Property is real estate + legal rights, powers, and privileges Real Property Land Improve- ments Bundle of rights © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests7 Real Estate Ownership as a Bundle of Rights Ownership rights are less as “sticks” from the bundle are given away or sold © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests8 Water Rights Riparian rights Belong to the owner of property bordering a flowing body of water Littoral rights Property bordering a stationing body of water such as a lake or sea © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests9 Fixtures Items become a fixture in one of three ways: Attachment Adaptation Agreement Exception: Trade fixtures = business personal property © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests10 Economic Characteristics of Real Property Scarcity (Limited availability) Permanence of Investment Location (Situs) Modification by improvement © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests11 Physical Characteristics of Real Property Immobility Nonhomogeneity (Uniqueness) Indestructibility (Permanence) © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests12 Estates in Property  Nonfreehold or leasehold = possession with a determinable end  Freehold = ownership for an undetermined length of time Freehold = ownership Leasehold = Rental © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests13 Fee Simple Estates  Fee simple absolute- Most complete form of ownership  Fee simple defeasible – two types: Fee simple on condition Qualified fee simple May be destructible or defeated © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests14 Life Estates  Ownership, possession and control for someone’s lifetime  The life estate ends upon the death of the life tenant  Upon the end of the life estate, two outcomes possible: Life estate in remainder Life estate in reversion © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests15 Real Estate Co-Ownership Co- ownership Tenancy In common Tenancy by the entirety Joint tenancy © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests16 Joint Tenancy Right of Survivorship Unity of Title Unity of Interest Unity of Possession Unity of Time © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests17 Types of Business Organizations Individual broker (sole proprietor) Limited partnership Partnership Corporation Limited liability company Syndicates/Joint Ventures All business names for brokerage firms must be submitted in writing for DOS approval © 2013 All rights reserved.

Chapter 3 Part I Estates and Interests18 Ownership Advantages and Disadvantages AdvantagesDisadvantages Sole proprietorship All profits to owner Tax advantage to owner Lack of continuity Unlimited personal liability PartnershipBroader management Ease of formation Low start-up costs Difficult to find partners Division of authority CorporationLimited liability Legal entity Charter restrictions Double tax except S © 2013 All rights reserved.