Chapter 1

Introduction to the Law of Real Property

Objectives

• After reading this chapter, you should be able to– Distinguish between real and personal property.– Understand the legal concept of property

ownership.– Identify the modern estates of ownership for real

property.

Objectives

• After reading this chapter, you should be able to– Understand and be able to explain the legal

concept of adverse possession.– Identify various ways of becoming an owner of

real property.

Real Property Law

• Laws that govern real property transactions– Two systems of law in the United States

1. Federal law2. State law

– Real property generally governed by state law

Real Property Law

• Real property versus personal property– Real property• Generally land and anything permanently attached to it

– Personal property• Also known as “chattels” or “goods”• Has a separate set of rules that govern ownership and

sale• Includes living and inanimate objects

Real Property Law

• Tangible personal property– Has physical substance– Is movable

• Intangible personal property– Represents rights that have no physical existence

but that do represent control or ownership of something of value

Real Property Law

• Fixtures– Personal property installed in or attached to land

or a building regarded by law as part of real property

– Trade fixture• Used by a tenant in its business• Most states allow removal of trade fixtures

Real Property Law

• Fixtures– Case• Ex Parte Brown

– Wife cited for contempt of court after removing fixtures from marital home in violation of divorce decree

Real Property Law

• Physical elements of real property– Airspace• Can be used for buildings (e.g., skyscrapers)• Can be used to preserve a scenic view

– Mineral rights• Owner can sell or lease

– Includes oil and gas

Real Property Law

• Physical elements of real property– Water rights• Groundwater• Surface water• Water that accumulates in a river, stream, or natural

lake– Owned by state or federal government– Owner of real property has right to the beneficial use of water– Riparian rights– Appropriation

Real Property Law

• Ownership of real property– Chief rights• Possession• Use• Disposition

– Ownership subject to federal and state safety, taxing, and condemnation regulations

History of American Real Property Law

• Modern-day estates in real property– Fee simple or fee simple absolute• Maximum legal ownership

– Fee simple determinable• Owner retains future interest• Also known as right of reverter

History of American Real Property Law

• Modern-day estates in real property– Fee simple on condition subsequent• Breach of condition does not cause automatic

termination

– Life estate• Duration is the life of the owner or some other person(s)

– Future interests• Generally reverters, reversions, or remainders

History of American Real Property Law

• Modern-day estates in real property– Estate for years• Fixed term

– Estate at will• No fixed term

Methods of Acquiring Ownership to Real Property

• Inheritance and devise– Take place on death of previous owner

• Gift– Delivery of deed makes gift irrevocable

• Contract and sale

Methods of Acquiring Ownership to Real Property

• Adverse possession– Requires that (unlawful) possession be public,

continuous, peaceful, exclusive, and uninterrupted

– Rules vary from state to state– Generally, possession must exist for 7 to 20 years

to ripen into ownership

Transfer of Ownership (Conveyances)

• Conveyance– Transfers ownership of real property– Generally accomplished by signing and delivery of

deed

Role of the Paralegal in Real Estate Legal Practice

• Research materials for real property law– Law of real estate usually governed by the state

where the property is located• Statutes• Judicial opinions

– Codes, cases, and statutes available at libraries and on the Internet

Ethics: Introduction

• Attorneys governed by two sets of ethical rules1. ABA Model Rules of Professional Conduct2. Rules of state bar associations

• Although paralegals not bound by rules, violations by paralegals can be imputed to attorneys

Ethics: Introduction

• Paralegal organizations– National Association of Legal Assistants (NALA)• www.nala.org

– National Federation of Paralegal Associations, Inc.• www.paralegals.org

Summary

• Ability to possess depends on rules of ownership– Horizontal ownership– Different estates ownership

• Determination of true ownership key to transactions