Lecture 2

1. MGT 374
Real Estate Analysis
College
of Business
AlfaisalUNIVERSITY

4. Poverty
is a lack of
Rights

5. What is Real Estate?
physical, bundle, industry
Three markets
user, capital, property
Review

6. IRV
Income, Rate,Value
Different
heterogeneous (age, building,
design), immobile,
illiquid, localized, segmented,
private complex negotiations

7. Chapter 2
Legal Foundations
toValue

8. Chapter 2
Legal Foundations
toValue

9. Value is
a function of rights
no rights = no value

10. Rights
government protected claim
non-revocable
enduring

11. Rights
claims the
government
enforces

12. Rights
non-revocable

13. Rights
enduring

14. Two kinds of Rights
Personal
Property

15. Personal or Civil
life
expression
assembly
others

16. Property
Exclusive Possession
Enjoy Use
Dispose

17. Two kinds of
property Rights
Personal
Real

18. Real
rights in land and permanent
structures
Personal
everything else

21. Surface
Buildable Air Space
Subsurface
Air Traffic Space
oil, gas, mines,
water

23. MetLife Building
NewYork City
Build above the
railroad right-
of-way entering
Grand Central
Station

25. Subsurface rights can be extremely valuable

26. Fixtures
personal property
that has become
real property

27. Four Fixture Rules
attachment
adaptation
intention
relation

28. Sale Contracts
must be clear what
are personal
fixtures

29. Bundle of Rights
Interests

30. Can separate interests
different people can hold

31. Possessory Interests
Estates
fee simple absolute
tenancy at sufferance

32. Fee Simple Absolute
complete
limited by
government and
prior owners

33. Fee Simple
Conditional
fee simple
as long as …

34. Life Estate
fee simple
until someone dies
Remainder Estate

35. Legal Life Estate
special rules for
couples with children

36. Leaseholds
limited in time
no disposition
no title
temporary right

37. Estates
owner
freehold
renter
leasehold

38. Ownership Estates
with inheritance
without inheritance

39. Ownership with inheritance
fee simple absolute
conditional with reverter
interest

40. Ownership without
inheritance
life estate
legal with remainder interest

41. Leasehold Estates
tenancy for years
periodic tenancy
tenancy at will:
tenancy at sufferance

42. Tenant at Sufferance
a former tenant
does not leave

43. Leasing Laws
repair
right of entry
deposits
notifications

44. Non-possessory
Interests
rights that do not
include possession

45. Non-possessory
Interests
easements
restrictive covenants
liens

46. Easement
right to use land for
a specific and limited
purpose

47. Easement
Right
License
Permit

48. Easement Appurtenant
dominant - servient
runs with the land

49. Driveway
Easement
Dominant
Parcel
Servient
Parcel
Easement

50. Easement Appurtenant
driveways
water, sewer, power,
phone
parking

51. Restrictive
Covenants
clause in the deed
limit uses

52. Lien
security for an
obligation

53. Would you build if you didn’t own the land?
Would you loan someone the money to build
if you could not get the property if they
failed to repay?

55. property rights
provide incentives to create wealth

56. Lien
taxes
mortgage
mechanic’s
court
order

57. Co-Ownership
business entity
tenancy in common
joint tenancy

58. Condominium
fee simple to area
common to elements
can mortgage

59. Condominium
create a little
government for your
building