WHAT IS REAL PROPERTY?

Real property is generally defined as land and the things permanently attached to the land. Things that are permanently attached to the land, also can be referred to as improvements, include homes, garages, and buildings. Substances that are beneath the land (such as gas, oil, minerals) are also considered permanently attached. Other items which can be attached to the land, such as mobile homes and tool sheds, are not considered to be real property.

WHAT IS OWNING REAL PROPERTY ABOUT?

You have a right to do with the land as you please, subject to restrictions imposed by law. When you own land, you can do many things with it, such as:

• use it;
• rent or lease it to others;
• sell or transfer it;
• give it away;
• use it as collateral for a loan;
• bequeath it to intended beneficiaries (by will or trust upon your death);
• let it sit where it is without doing anything to it (although this could create problems due to restrictions imposed by law.)

WHAT ARE SOME TYPICAL RESTRICTIONS IMPOSED BY LAW ON OWNING REAL PROPERTY?

There is a myriad of federal, state, county and local laws which restrict what you can do with the real property that you own. Enforcement of these laws typically resides with various governmental agencies which are responsible for keeping you in compliance with these laws. The three most common restrictions imposed by government are:

zoning - restriction on the use of the property as to residential, industrial, agricultural, or commercial purposes are very common. The size and height of improvements attached to the property are likewise subject to restriction.

environmental hazards - what materials can be stored on the real property as well as who is responsible for removing environmental hazards from real property (such as asbestos, lead paint, petro-chemicals, radon and toxic wastes) are government regulated.

public easement and right of way - a portion of the real property may have to be left open for others to use. Easements and right of way are used to allow access to other property, to provide for roads and sidewalks, and to enable electric/gas/telephone/sewer lines to be installed. A broader discussion of easements appears below.

Violation of government law can result in fines, penalties, injunctions and even criminal prosecution resulting in you being sent to prison.

WHAT NON-GOVERNMENT RESTRICTIONS ARE THERE ON THE USE OF MY PROPERTY?

In addition to laws established by the government, there may also be private party agreements and other restrictions controlling what you can do with your real property. For example, a real estate developer may sell homes in a subdivision or condominiums subject to restrictive covenants in the purchase contract (typically referred to in Real Estate World, as CC&R--covenants, conditions, and restrictions). Lot size, architectural design, vehicle parking and even placement of satellite dishes are subject to the conditions set forth in the purchase contract. Private easements and rights-of-way may be established by grant, implication and prescription enabling others to use a portion of the real property. Typical remedies for violation of private party agreements include an award of damages against the violator and injunctive relief (requiring removal of the violation and prohibiting such a violation in the future).

In addition to the rights that you obtain by owning property, it is important that you recognize that there are responsibilities and potential liabilities to others which also result through ownership of real property. For example,

• you may own property subject to a mortgage (if you fail to pay the mortgage, the lender will take the property back);
• a lien for payment of a debt can be placed against your property (such as a "mechanic's lien" or "judgment lien"); and
• if someone is injured on your property, you may be held liable to the injured person for all damages resulting from your negligence.

I HAVE AN EASEMENT ON MY BEACH FRONT PROPERTY AND THE PUBLIC IS REPEATEDLY CUTTING ACROSS THE EASEMENT BOUNDARIES AND WALKING OVER MY FLOWERS. WHAT IS THE LINE BETWEEN EASEMENTS AND ENCROACHMENTS?

Easements and encroachments also affect your ownership of land. People may have been traveling across your land for years to gain access to adjacent property. Your neighbor may have placed a fence across fifteen feet of your property line. Benefits and burdens run with the land - what you obtained when you acquired the property from the previous owner passes to you. The easements and encroachments, whether they be benefits or burdens upon your land, which existed at the time that you acquired the land continue, while you own the land.

An easement is the right of a no owner to use your land for a designated purpose (e.g., accessing the beach in your case). A right of way is a form of easement granted by the property owner which gives the right to travel over your land and to have the reasonable use and enjoyment of your property to others, as long as it is not inconsistent with your use and enjoyment of the land. These principles had their origin in traditional common law which governed, for example, the free flow of water or allowed neighboring landowners to travel over another's property (an informal "road system"). Although ownership rights of property are lessened by an easement, society at large benefits due to the additional freedom of movement.

An encroachment is an unauthorized entry upon land of another; whether or not an obstruction is placed upon the land. Traditional common law created the action of trespass for injury to your property (trampling your flower bed in your case) when another interfered with your property rights by an unauthorized and direct breach of the boundaries of your land, enabling you to bring a lawsuit to recover damages for the intrusion. The converse is also true, when you trespass or encroach upon the land of another, you can be held responsible for damages.

WHAT ARE SOME OF THE COMMON FORMS OF PROPERTY OWNERSHIP?

There are a variety of forms of ownership of property. The more common forms of ownership include:

Joint Tenancy: property owned by two or more people at the same time in equal shares; typically referred to as the four unities (unity of time, title, interest and possession vesting in each joint tenant). Each joint tenant has an undivided right to possess the whole property and a proportionate right of equal ownership interest. When one joint tenant dies, his/her interest automatically vests in the surviving joint tenant(s) by operation of law. Words in the deed such as "John and Mary, as joint tenants with right of survivorship and not as tenants in common" establishes title in joint tenancy. Not all the states allow this form of property ownership.

Tenancy in the Entirety: some states have a special form of joint tenancy when the joint tenants are husband and wife -- with each owning one-half. Neither spouse can sell the property without the consent of t he other. Words in the deed such as "John and Mary, husband and wife as tenancy in the entirety" establishes title in tenancy by the entireties.

Sole Ownership: owned entirely by one person. Words in the deed such as "John, a single man" establishes title as sole ownership.

Tenants in Common: property owned by two or more persons at the same time. The proportionate interests and right to possess and enjoy the property between the tenants in common do not have to be equal. Upon death, the decedent' s interest passes to his/her heirs named in the will who then become new tenants in common with the surviving tenants in common. Words in the deed such as "Peter, Paul, John and Mary as tenants in common" establishes tenancy in common.

Community Property: only in states that recognize community property, a special form of joint tenancy between husband and wife, each owning one-half. Upon death, the decedent's interest passes in a manner similar to tenants in common. Words in the deed such as "John and Mary, husband and wife as community property" establishes community property ownership.

The above ways for owning real property are all present interests - that is, the owner has the rights now. There are also future interests - that is, interests in property that come into effect in the future. Typically future interests are based upon the occurrence of a contingency, such as someone dies and the decedent's interest in the property passes in accordance with his/her last will or trust.

WHAT IS THE DIFFERENCE BETWEEN COOPERATIVES AND CONDOMINIUMS?

In a "condo" arrangement, you legally own a particular unit in a multiple unit structure of building. Plus, under a typical arrangement, you have a share and a right to use common property (i.e., hallways, elevators, gardens, swimming pools, club house, and so forth) within that structure. Monthly payment to an "association" for expenses incurred in maintaining the common property are normally required. The association gains its legal authority from the legal documents which create it - declarations, by-laws, and articles - and these associations typically run like a corporation and may be managed by professional property management companies. There are usually complaint and appeal processes built into the association documents to protect individual rights and to provide a mechanism for resolving controversies within the community - as well for selecting the members of the Board of Directors who oversee management of the association.

A "co-op", on the other hand, is a "horse of a different color". You do not own your own specific unit in the building but own stock in the corporation that actually owns the building and all the apartments. You lease your apartment or unit from the corporation. The unit's size determines the number of shares of stock you must purchase. Monthly fees based on the number of your shares of stock are assessed for the mortgage payment, taxes, and general operating expenses. As a shareholder, you have a say in electing the Board of Directors who manage and decide on how the cooperative is to be run, who is qualified to buy shares, and so on.

WHAT ARE THE RISKS IN OWNING REAL PROPERTY?

There are many risks inherent in owning real property. Some of the more common include:

• liability for violation of zoning ordinances.
• liability for environmental hazard clean-up.
• liability to others who are injured on the property.
• liability to others who are injured by the property (such as an uphill landowner is responsible when his land slides onto a downhill landowner's property).
• liability to third parties pursuant to contract (such as responsibility to make mortgage payments to the lender).
• liability to a purchaser when the property is sold (and there is a problem in transferring title, interest or possession).

If you fail to maintain your property or knowingly create a condition on your property that causes injury to someone's property or person without taking steps to eliminate the hazard or provide a proper warning; you could be determined to be negligent and thus responsible for the harms and injuries that result of your negligence. To reduce your exposure to risk from owning real property, you have an affirmative obligation to maintain your property so as not to cause harm or injury to others.

Despite the risks inherent in owning real property, most people agree that owning real property is desirable.

HOW CAN I PROTECT MYSELF BEFORE I SIGN?

For starters, know what you are buying. Ask questions. For example:

• Are there any zoning violations on the property which will have to be corrected?
• Are there any environmental hazards which may be present (someone in the distant past may have dumped environmental hazards on the property so an environmental assessment should be made)?
• Are there any apparent conditions on the property which could potentially harm someone who happens to come on the property?
• Are there any restrictions or covenants in the purchase contract that would be hard to comply with?
• Will you be able to pay the mortgage on time?
• Are there any potential defects in the chain of title? Resolve these issues before you take title, interest or possession.

Real property owners can protect themselves from many of the risks of ownership by purchasing insurance. The two most common forms of insurance for real property includes liability insurance and title insurance.