Tutorial 2, revised

1. Describe the general nature of “Property”.

Real Estate

• Land and all things attached
• That a person owns

Property rights - ownership rights

• When investing in real estate, in addition to acquiring the physical assets of the land and all things permanently attached, investors also acquire certain rights
• Rights can be exercised by the property owner
  • the right to control, occupy, develop, improve, exploit, pledge as the right of a person to the possession, use, enjoyment and disposal of her/her property

Interests in property

• created by owners of real estate who pledge and encumber property in order to achieve an objective without giving up ownership
  • E.g. property owner grants an easement to another party to cross land in order to gain access to another site

2. What are the two main classifications of the “things” we call property?

Real Property (Realty)

• Land and all things permanently affixed (buildings, sidewalks, etc). Immovable and fixtures.

Personal Property (Personalty)

• Intangibles and all moveable things (e.g. stocks, auto, patent, furniture)

3. Can Real Property be intangible? If yes, provide some examples.

Real property can be intangible

Easements

• Right to use the land that is owned or leased by someone else for some special purpose (e.g. as a right of way to and from one's property)
  • easement entails only a limited user privilege and not privileges associated with ownership

  • Gas and water meters, a small item but someone else has the right to access it

Volumetric subdivision Creating a volumetric subdivision (using space above or below the land)

• Apartment building, multiple levels
• Land subdivision: land can be physically subdivided and each parcel owned by a party
• Strata title: a building can be divided into multiple lots and this is commonly referred to a "strata titling" or a "strata title subdivision"

4. What is meant by an “interest in property”?

As outlined in question 1.

5. What is the definition of an “estate” in the context of real property?

The term estate means "all that a person owns"

• All realty owned as part of an individual's estate
• Used to describe the extent to which rights and interest in real estate are owned

6. Provide two examples of Freehold Estates.

Fee Simple Estate

• most complete form of ownership of real estate
• Holder of fee simple estate is free to divide up the fee into lesser estate and sell, lease or borrow against them

Life Estate

• Fewer ownership rights than a fee simple estate
• a freehold estate that lasts as long as the life of the owner of the estate of the life of some person
• e.g. a grantor may with to make a gift to his/her property prior to dealth, yet wish to retain the use and enjoyment of the property until that time.
• Life estate can be leased, mortgaged or sold

7. How do Freehold Estates differ from Leasehold Estates?

• Freehold estate lasts for an indefinite period of time, no definitely ascertainable date on which the estate end
• Leasehold estate expires on a definite date
• Freehold estate connotes ownership of the property by the estate holder

8. What is the similarity between a Reversion and a Remainder?

Reversion

• Holder of the real estate (grantor) conveys to another person (grantee) a present estate in the property that has fewer ownership rights than the grantor's own estate and retains for the grantor the right to take back, as some time in the future, the full estate before the conveyance.
• grantor has reversionary fee interest

Remainder

• when the grantor of a present estate with fewer ownership rights than the grantor's own estate convey's to a third person the reversionary interest.
• IN OTHER WORDS - A remainder interest is a future interest created in someone other than the grantor, which becomes possessory upon the termination of a prior estate
  • For example, if a landowner grants a life estate to their nephew, with the remainder to their niece, the niece has a remainder interest in the property. When the nephew's life estate ends, the niece's remainder interest becomes possessory.

Similarities

• both examples of future estates
• both created at the same time

9. What are the differences between a Reversion and a Remainder?

Definitions outlined in question 8. mainly:

• a reversionary interest eventually has the rights reverted back to the grantor. For the example of a life estate, the grantor will eventually have ownership rights once the grantee has died. A remainder, on the other hand, is the entity which is granted ownership rights of the property after the death or termination of the grantee. the main difference is that the 'remainder' is a separate party to the original grantor, where a revisionary interest is the original grantor.

10. Describe the Doctrine of Tenure and explain why it still applies today in Australia?

Doctrine of tenure All land is held by way of grant from the Crown (or in modern language from the State).

• This is important as it dictates that whilst the crown (essentially the government) gives you the right to have real property and rights associated with it, they still have the right to take it back.

11. What are the three sources for rights and obligations under a lease?

1. Written contract: the primary source of rights and obligations between the parties
2. Part VIII of the Property Law Act 1974 (QLD)

• s105 - tenant’s obligation to pay rent, keep in repair etc.
• s107 - landlord’s right to enter, repair etc

3. Common law - implied terms and conditions

• Tenant right - quiet enjoyment
• Landlord obligation - non derogation of grant

12. What are the main differences between a lease and a licence?

• A licence is a contractual right and merely gives the licensees the right to use the premises for a given purpose and to do something rightfully on the land which would otherwise be a trespass. Differences
• Where a lease conveys an estate in the land to the tenant, a licence passes no estate in the land to the licensees.
• A lease when granted cannot be revoked (subject to termination rights for breach) - but the grantor of a licence may revoke it at any time, upon reasonable notice.
• A lease can be assigned to a third party in the absence of express stipulation to the contrary.