Florida Real Estate Principles, Practices & Law
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Florida Real Estate Principles, Practices Law 43rd Edition Unit 8: Property Rights: Estates and Tenancies, Condominiums, Cooperatives, and Time-Sharing Land, Real Estate, and Real Property Land Surface and everything attached to it by
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01
Florida Real Estate Principles, Practices & Law 43rd Edition Unit 8: Property Rights: Estates and Tenancies, Condominiums, Cooperatives, and Time-Sharing<br>
02
Land, Real Estate, and Real Property Land
Surface and everything attached to it by nature (earth’s center to infinity)
Real estate
Land and human-made improvements
Real property
Real estate plus the legal bundle of rights<br>
Surface and everything attached to it by nature (earth’s center to infinity)
Real estate
Land and human-made improvements
Real property
Real estate plus the legal bundle of rights<br>
03
Definition of Real Property, F.S. 475 Real property or real estate means any interest or estate in land and any interest in business enterprises or business opportunities
Includes mineral rights
Does not include
Cemetery lots
Renting of a mobile home lot or recreational vehicle lot in a mobile home park or travel park<br>
Includes mineral rights
Does not include
Cemetery lots
Renting of a mobile home lot or recreational vehicle lot in a mobile home park or travel park<br>
04
Physical Components of Land Surface rights include land and water rights
Riparian rights
Littoral rights
Subsurface rights also referred to as mineral rights
Air rights involve space above<br>
Riparian rights
Littoral rights
Subsurface rights also referred to as mineral rights
Air rights involve space above<br>
05
Riparian vs. Littoral Rights Riparian rights associated with land abutting a flowing waterway
Banks of a river or stream
Littoral rights associated with land abutting tidal bodies of water
Oceans and seas including ocean-front and gulf-front property
Nonflowing water including ponds and lakes<br>
Banks of a river or stream
Littoral rights associated with land abutting tidal bodies of water
Oceans and seas including ocean-front and gulf-front property
Nonflowing water including ponds and lakes<br>
06
Definitions Associated with Water Rights Accretion
Process of land buildup from water-borne rock, sand, and soil
Alluvion
New deposits resulting from accretion
Erosion
Loss in land due to natural forces
Reliction
Receding of water, uncovering additional land<br>
Process of land buildup from water-borne rock, sand, and soil
Alluvion
New deposits resulting from accretion
Erosion
Loss in land due to natural forces
Reliction
Receding of water, uncovering additional land<br>
07
Real vs. Personal Property Two basic types of property
Real property (realty)
Personal property (chattel)
Personalty indicates personal property
Real property becomes personal property by act of severance
Personal property becomes real property by attachment<br>
Real property (realty)
Personal property (chattel)
Personalty indicates personal property
Real property becomes personal property by act of severance
Personal property becomes real property by attachment<br>
08
Fixtures Fixture—was originally personal property, now permanently attached to and made part of the real property
Four tests
Intent of the parties
Relationship or agreement of the parties
Method or degree of attachment
Adaptation of the item<br>
Four tests
Intent of the parties
Relationship or agreement of the parties
Method or degree of attachment
Adaptation of the item<br>
09
Basic Property Rights Disposition
Enjoyment
Exclusion
Possession
“C”ontrol<br>
Enjoyment
Exclusion
Possession
“C”ontrol<br>
10
Estates and Tenancies The degree, quantity, nature, and extent of the interest (ownership rights)
Two general groups
Freehold – indefinite length (unknown) duration
Leasehold – (nonfreehold) fixed (known) duration<br>
Two general groups
Freehold – indefinite length (unknown) duration
Leasehold – (nonfreehold) fixed (known) duration<br>
11
Freehold Estates Ownership interest for an indefinite period (unknown duration)
Two types
Fee Simple – inherited (largest bundle of legal rights)
Life Estate – measured by a person’s life span<br>
Two types
Fee Simple – inherited (largest bundle of legal rights)
Life Estate – measured by a person’s life span<br>
12
Freehold Estate Fee simple
Most comprehensive
Absolute and complete ownership
Can be inherited
Also, fee or fee simple absolute
Power to use, dispose, descend to heirs<br>
Most comprehensive
Absolute and complete ownership
Can be inherited
Also, fee or fee simple absolute
Power to use, dispose, descend to heirs<br>
13
Freehold Estate Life Estate - own property for the period of a lifetime (the owner’s or other designated person)
Conventional life estate created by agreement of the parties; grantor transfers life estate to another<br>
Conventional life estate created by agreement of the parties; grantor transfers life estate to another<br>
14
Freehold Estate Life Estate: possible persons who hold title once life estate is over
Estate in reversion
Property reverts to the original grantor
Remainder estate
Property goes to remainderman<br>
Estate in reversion
Property reverts to the original grantor
Remainder estate
Property goes to remainderman<br>
15
Legal Life Estate Created by Florida law
If a homestead is owned by one person and they die, their surviving spouse gets a legal life estate<br>
If a homestead is owned by one person and they die, their surviving spouse gets a legal life estate<br>
16
Homestead Right to homestead permanent (principal) residence
Protections and benefits
Protection of the family (legal life estate)
Protection of homestead from forced sale
Tax exemption of up to $50,000
Size restriction of protected homestead is 160 acres outside city or .5 acre within city
Personal property protection ($1,000 value)<br>
Protections and benefits
Protection of the family (legal life estate)
Protection of homestead from forced sale
Tax exemption of up to $50,000
Size restriction of protected homestead is 160 acres outside city or .5 acre within city
Personal property protection ($1,000 value)<br>
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Nonfreehold or Leasehold Estates Measured in calendar time (known duration)
Not freehold because it does not exist for an indefinite period
Nonfreehold or less-than-freehold
Not an ownership interest
Transfer right of enjoyment (use and possession) for a period of time<br>
Not freehold because it does not exist for an indefinite period
Nonfreehold or less-than-freehold
Not an ownership interest
Transfer right of enjoyment (use and possession) for a period of time<br>
18
Leasehold Estates Estate for years (tenancy for years)
Specific starting and ending date (designated period)
Created by written lease agreement
Establishes tenant interest in property but does not convey legal title<br>
Specific starting and ending date (designated period)
Created by written lease agreement
Establishes tenant interest in property but does not convey legal title<br>
19
Leasehold Estates Tenancy at will
Lease agreement with a beginning date but no fixed termination date
Tenancy without specific term
Notice to terminate set in statute
Week to week: 7 days notice
Month to month: 15 days notice<br>
Lease agreement with a beginning date but no fixed termination date
Tenancy without specific term
Notice to terminate set in statute
Week to week: 7 days notice
Month to month: 15 days notice<br>
20
Leasehold Estates Tenancy at sufferance
Tenant stays in possession of property beyond ending date and without landlord’s consent
Tenant holds over
If with written consent of landlord, then it becomes a tenancy at will<br>
Tenant stays in possession of property beyond ending date and without landlord’s consent
Tenant holds over
If with written consent of landlord, then it becomes a tenancy at will<br>
21
Sole vs. Concurrent Ownership In Severalty
Property is held by one person
Sole ownership
“Severed” ownership
“Separate” property: owned by one spouse
Equitable distribution of marital assets upon divorce
Concurrent Ownership
Concurrent ownership Two or more persons own property at the same time
Three types
Tenancy in common
Joint tenancy
Tenancy by the entireties<br>
Property is held by one person
Sole ownership
“Severed” ownership
“Separate” property: owned by one spouse
Equitable distribution of marital assets upon divorce
Concurrent Ownership
Concurrent ownership Two or more persons own property at the same time
Three types
Tenancy in common
Joint tenancy
Tenancy by the entireties<br>
22
Tenancy in Common Two or more people
Acquire title at same or different times
Undivided interest (interest in whole property)
Equal or unequal shares of ownership
Heirs inherit (no right of survivorship)<br>
Acquire title at same or different times
Undivided interest (interest in whole property)
Equal or unequal shares of ownership
Heirs inherit (no right of survivorship)<br>
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Joint Tenancy Right of survivorship—share of a co-owner who has died goes to surviving co-owner(s), not to heirs
Four unities
Possession—undivided
Interest—equal ownership interest
Title—acquire title on same deed
Time—acquire interests at same time
Specific wording in the deed must provide for survivorship<br>
Four unities
Possession—undivided
Interest—equal ownership interest
Title—acquire title on same deed
Time—acquire interests at same time
Specific wording in the deed must provide for survivorship<br>
24
Tenancy by the Entireties Married couple only
Must be married to each other when they take title
Four unities of a joint tenancy must exist
Actions affecting property require consent of both spouses
When one spouse dies, ownership interest transfers to surviving spouse by right of survivorship
In event of divorce: tenancy by entireties becomes tenancy in common<br>
Must be married to each other when they take title
Four unities of a joint tenancy must exist
Actions affecting property require consent of both spouses
When one spouse dies, ownership interest transfers to surviving spouse by right of survivorship
In event of divorce: tenancy by entireties becomes tenancy in common<br>
25
Cooperatives (F.S. 719) Multi-family building owned by corporation
Unit owners purchase shares of stock
Stock ownership entitles purchaser to a proprietary lease and right to occupy
Property taxes assessed on each unit
Owners can deduct real estate taxes and mortgage interest
Shareholders pay a pro rata share of property taxes and the corporation pays the tax bill<br>
Unit owners purchase shares of stock
Stock ownership entitles purchaser to a proprietary lease and right to occupy
Property taxes assessed on each unit
Owners can deduct real estate taxes and mortgage interest
Shareholders pay a pro rata share of property taxes and the corporation pays the tax bill<br>
26
Cooperative Disclosures and Cancellation Disclosure in contract with developer
Buyer has right to cancel within 15 calendar days of signing contract and receipt of cooperative documents
Disclosure in resale contract, either
Buyer has received documents at least 3 business days before signing, or
Buyer has right to cancel within 3 business days of signing contract and receipt of cooperative documents<br>
Buyer has right to cancel within 15 calendar days of signing contract and receipt of cooperative documents
Disclosure in resale contract, either
Buyer has received documents at least 3 business days before signing, or
Buyer has right to cancel within 3 business days of signing contract and receipt of cooperative documents<br>
27
Condominiums (F.S. 718) Consists of condo units and common elements
Own condo unit in fee simple plus an undivided fractional share of common elements
Deed conveys ownership
Common elements legally attached to each unit and transfer with unit
Property taxes levied on individual units<br>
Own condo unit in fee simple plus an undivided fractional share of common elements
Deed conveys ownership
Common elements legally attached to each unit and transfer with unit
Property taxes levied on individual units<br>
28
Condominium Documents The following documents must be given to buyer of residential condo units sold by developer and resales
Declaration of condominium
Condo is created by recording declaration
Articles of incorporation for condo association
Bylaws
Operational requirements, rules and regulations
FAQ sheet
Information regarding leasing units, assessments<br>
Declaration of condominium
Condo is created by recording declaration
Articles of incorporation for condo association
Bylaws
Operational requirements, rules and regulations
FAQ sheet
Information regarding leasing units, assessments<br>
29
Condo Units Sold by Developer In addition to four documents, provide buyer
Prospectus (if more than 20 units)
Estimated operating budget
Purchaser has 15 calendar days to cancel contract
After signing contract
Clock does not begin until buyer also receives required condo docs<br>
Prospectus (if more than 20 units)
Estimated operating budget
Purchaser has 15 calendar days to cancel contract
After signing contract
Clock does not begin until buyer also receives required condo docs<br>
30
Resale Condo Units Sold by Owner Disclosures for residential resales
Four primary documents, and
Most recent year-end financial information
Rules of association
Governance form
3 business days to cancel contract
After signing contract and receiving docs<br>
Four primary documents, and
Most recent year-end financial information
Rules of association
Governance form
3 business days to cancel contract
After signing contract and receiving docs<br>
31
Time-Sharing (F.S. 721) Units are divided into time segments of ownership, usually 52 weeks
Deeds or other ownership evidences are prepared for each ownership segment<br>
Deeds or other ownership evidences are prepared for each ownership segment<br>
32
Time-Share Licensure Requirements Real estate license is required to sell another’s time share for compensation
Exemptions
Salaried employees of time share developers selling time shares for developer, provided
Not paid commission
No payment based on transaction
Owners of time shares can sell their own time shares<br>
Exemptions
Salaried employees of time share developers selling time shares for developer, provided
Not paid commission
No payment based on transaction
Owners of time shares can sell their own time shares<br>
33
Time-Share Resale Listing Agreements Illegal to collect advance fee for listing a time-share
Required disclosure not guaranteeing a sale
Other requirements
Commissions (fees)
Terms
Broker’s services
Termination and listing extension rights
Judgments (or litigation) against the broker<br>
Required disclosure not guaranteeing a sale
Other requirements
Commissions (fees)
Terms
Broker’s services
Termination and listing extension rights
Judgments (or litigation) against the broker<br>
34
Sale Contract Disclosures Time share sale contract must contain
Current year’s time share assessment
If property taxes not included in assessment, most recent property tax assessment
Form of time share ownership
Managing entity
Terms for closing and costs
Existence of mandatory exchange program<br>
Current year’s time share assessment
If property taxes not included in assessment, most recent property tax assessment
Form of time share ownership
Managing entity
Terms for closing and costs
Existence of mandatory exchange program<br>
35
Right of Cancellation Buyer has right to cancel within 10 days of signing time share sale contract or receipt of public offering statement, whichever occurs later
New time shares from developer
Resale time shares<br>
New time shares from developer
Resale time shares<br>
36
Time-Share Ownership Interval ownership—fee simple ownership
Fractional interest transferred by deed
Right-to-use
Usage of time-share is limited to a certain number of years
Ownership of time-share remains with developer<br>
Fractional interest transferred by deed
Right-to-use
Usage of time-share is limited to a certain number of years
Ownership of time-share remains with developer<br>