Page 28 - Principals of Real Estate

28 California Real Estate Principles

Learning Objectives

After completing this Unit, you should be able to:
2A identify the bundle of rights inherent in owning property.
2B differentiate personal and real property.
2C specify the types of estates.
2D distinguish types of real property ownership.
2E recall the recording process and how it safeguards ownership.

BUNDLE OF RIGHTS

When you buy property, you might think you are buying the physical item;
however, what you are buying are the rights to use that property. Property
rights are the rights someone has in something and are known collectively
as the bundle of rights. This important package includes the right to own,
possess, use, enjoy, borrow against, and dispose of real property. An owner may
choose to sell or give away one of the rights and keep the rest. For example,
an owner may give away the right of use for a period of time to a tenant, under
a lease agreement.

Use: The right to use property, within the law
in any way, or for any purpose.

Possess: The right to live on the property and the
right to keep others out.

Transfer: The right to sell property, give it as a
gift, or dispose of it in any way
permitted by law.

Encumber: The right to borrow money and use
property as security for the loan.

Enjoy: The right to peace and quiet enjoyment without aggravation by others.

Bundle of Rights: Property rights are the rights someone has in something.
Remember the mnemonic UPTEE:

Use, Possess, Transfer, Encumber, and Enjoy.

PROPERTY

Property is anything that may be owned and gained lawfully. Property can
be real or personal. Anything that is not real property is personal property.