Sarah Reinhart-Friendship Based Real Estate®

Okay, so now you're rich cause you discovered a sea of oil the size of Montana under your grandmother's Azaleas, which must be on your cone of space also known as your yard. However, you still have no idea what "Real Property" is. Here is the next line in context again:

real property n. 1) all land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all "interests" in the property which may be the right to future ownership (remainder), right to occupy for a period of time (tenancy or life estate) the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall), use of airspace (condominium) or an easement across another's property. Real property should be thought of as a group of rights like a bundle of sticks which can be divided. It is distinguished from the other type of property, personal property, which is made up of movable items. 2) one of the principal areas of law like contracts, negligence, probate, family law and criminal law.

The line stating:

"the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall)"

Again this is piggybacked on another definition. A Reversion.

A Reversion is:essentially...

Any future interest kept by a person who transfers property to another.

A reversion occurs when a property owner makes an effective transfer of property to another but retains some future right to the property. For example, if I transfer a piece of property to Bubba Gump for life, Bubba Gump has the use of the property for the rest of his life. Upon his death, the property reverts, or goes back, to me, or if I die, it goes to my heirs. Bubba Gump's interest in the property, in this example, is a life estate (see last blog...part IV). My ownership interest during Bubba Gump's life, and my right or the right of my heirs to take back the property upon Bubba Gump's death, are called reversionary interests.

WHEEW!

So, following our definition, the right to have the abilty to create a reversion, is by definition "real property"! Blah

More to follow....

Ah! The confusion imposed on real life by people who get paid big bucks to write definitions of things that should be simple (haha)

:)

We are still sludging through the definition of real property and I want to focus this blog on the next line in our murky dictionary definition of Real Property. Here it is in context.

real property n. 1) all land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all "interests" in the property which may be the right to future ownership (remainder), right to occupy for a period of time (tenancy or life estate) the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall), use of airspace (condominium) or an easement across another's property. Real property should be thought of as a group of rights like a bundle of sticks which can be divided. It is distinguished from the other type of property, personal property, which is made up of movable items. 2) one of the principal areas of law like contracts, negligence, probate, family law and criminal law.

The line I am pulling out is ironically the most simplistic. "the right to drill for oil", or essentially the minerals and valuable stuff under the land.

The best way to explain it is to imagine the earth...yep big blue ball. Then think of your "plot", or yard/lot lines. Now imagine a cone starting from the edges of your lot into the center of the earth. Now, there are easements, deeded rights and all kinds of stuff to interfere with that perfect cone, but the essential space concept remains your property. So, if you were to find a well of oil while planting your rose bushes, unless there was a recorded exception, it would belong to you.

More to follow...

And...we continue to grope our way through the murky waters of the definition of 'Real Property".

Again, the dictionary definition of Real Property is a follows:

real property n. 1) all land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all "interests" in the property which may be the right to future ownership (remainder), right to occupy for a period of time (tenancy or life estate) the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall), use of airspace (condominium) or an easement across another's property. Real property should be thought of as a group of rights like a bundle of sticks which can be divided. It is distinguished from the other type of property, personal property, which is made up of movable items. 2) one of the principal areas of law like contracts, negligence, probate, family law and criminal law.

I want to talk about the part that says:

"right to occupy for a period of time (tenancy or life estate)".

To explain this part, I must explain what a life estate is. BTW, this is one of the lines on the Seller's Disclosure most of you filled out glibly :)

A life estate allows a person to possess, but not have ownership of property (typically land, a home, or other buildings) during his or her lifetime. When the person passes away, the life estate ends and the title holders (remaindermen) have full benefit of the land and income.

As an example, I want to leave my land and home to my husband so he can live in the home and can receive income from the land after my passing. But after I pass away he wants his children to inherit the land and home.

To ensure this, I write a will leaving my home and my land as a life estate for my husband (who then becomes the life tenant) with the remainder to my children, Hannah and Nicole. After I pass away and everyone cries and eats potato salad at the memorial service, full benefit and income from the land become Hannah and Nicole's because they were named as remaindermen (women...whatever) in my will.

My husband ( the life tenant), however, will have the full use and/or the possession of the property for the duration of his life. At the passing of the life tenant ( my husband) the life estate ends and my kiddos have the full use and benefit of the property. My children must be named in my will. If there is no will, then their use of the property will be determined under AIPRA rules.

Whew! And that is why i am worth the money :)

(More to follow)

So, I left you with this horribly confusing dictionary definition of Real Property that is really strange.

real property n. 1) all land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all "interests" in the property which may be the right to future ownership (remainder), right to occupy for a period of time (tenancy or life estate) the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall), use of airspace (condominium) or an easement across another's property. Real property should be thought of as a group of rights like a bundle of sticks which can be divided. It is distinguished from the other type of property, personal property, which is made up of movable items. 2) one of the principal areas of law like contracts, negligence, probate, family law and criminal law.

That part I want to focus in on in this blog is:

"and all "interests" in the property which may be the right to future ownership (remainder),

What does that mean in the language of "I am not a lawyer" and Sarah is not either?

:)

It means that the right to determine the "future use of the property "is included in the definition of "property". For example, you can't sell a house and then knock on the door 10 years later and demand that it is yours to will to your children. When you sell the property, you are selling your right to whine or determine how that property is used.

Have you heard the term "real property"? Is that, like the opposite of "pretend" property? Fairytale land, imaginary land....

I personally think that term is very confusing and the person who thought of it should be kicked. However, in buying or selling a house, understanding that term is imperative. Grasping this definition can save you time, money, and stress. The dictionary defines 'real property' as:

real property n. 1) all land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all "interests" in the property which may be the right to future ownership (remainder), right to occupy for a period of time (tenancy or life estate) the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall), use of airspace (condominium) or an easement across another's property. Real property should be thought of as a group of rights like a bundle of sticks which can be divided. It is distinguished from the other type of property, personal property, which is made up of movable items. 2) one of the principal areas of law like contracts, negligence, probate, family law and criminal law.

So...let me break it down in real life. A screwed in shelf is "real property". A shelf leaning against a wall is not. A ceiling fan is "real property", a lamp is not. A rose bush planted in the ground is "real property", and one in a pot on the deck is not. Hold on...it gets weirder. However, you'll have to read my next blogs to find out :)