BBA 3210 Columbia Southern University Interests in Real Property Business Law Questions Answer each question with at least 200 words, no formatting needed:

BBA 3210 Columbia Southern University Interests in Real Property Business Law Questions Answer each question with at least 200 words, no formatting needed:1. In the Unit III Lesson, we stated real property or “realty” is land and everything permanently attached to it. That seems like a simple concept. Explain how the idea of mineral rights can impact you as a business person. Include information from our Unit Lesson and your personal experience. 2.In the Unit III Lesson, we explored Article I, Section 8, Clause 8 of the United States Constitution. The creators of intellectual property have some protection. Explain what you view as threats to intellectual property in today’s world economy. What are some examples where intellectual property is threatened? What are some protections in place to give creators of intellectual property some protection? Real Property
LO 8-2
How does real property law balance private and public rights?
There are a number of types of interests in land, ranging from temporary to permanent to future.
The duration of one’s ownership interest and the power one has over using the land depend on
the type of estate one is said to hold. The following section on interests in real property describes
the various estates in detail. First, though, this chapter explores the landowner’s rights that pertain
to areas beyond the surface of the land itself.
Extent of Ownership
When a person owns land, she or he owns more than just the surface. The airspace above the
land, extending to the atmosphere, is also part of the legal concept of real property. Rights to
airspace generally do not generate much controversy, but occasionally disputes arise that involve
aircraft flying too low over individuals’ property. Alternatively, a tree’s branches may hang over
into the airspace of the property next door, and the owner of that airspace may want to cut the
overhanging branches.
In dense, commercial urban areas, airspace may actually be an asset. Owners of two
commercial buildings might want to build an overhead walkway joining their buildings across a
parking lot that you own. They will have to pay you handsomely for the right to build in your
airspace.
In addition to having airspace rights, the owner of real property also has water rights, the legal
ability to use water flowing across or underneath the property. However, these rights are
somewhat restricted; one cannot deprive the landowners downstream from the use of the water
by diverting the water elsewhere.
Finally, ownership of real property extends to mineral rights; these rights involve the land
below the surface. The landowner has the legal ability to dig or mine the materials from the earth,
and he may sell or give these rights to another person. Ownership of these subsurface
rights includes the right to enter onto the property to remove the underground materials.
All these additional rights are illustrated in Exhibit 8-1.
Interests in Real Property
LO 8-3
What interests in real property can one hold?
Various interests in land are discussed in the following sections and summarized in Exhibit 8-2.
Exhibit 8-2
Possessory Estates in Land
INTEREST
EXTENT OF RIGHTS
Leasehold estate
Right to possess property for an agreed-on period of time
Life estate
Right to possess property until death, subject to restriction against waste
INTEREST
EXTENT OF RIGHTS
Conditional estate
Right to possess property until death, subject to restriction against waste
Fee simple absolute
Right to possess property for life and pass it to heirs on death; the most encompassing inte
Fee Simple Absolute With regard to estates in land, a fee simple absolute is the most complete
estate a person may have. Exclusive rights to ownership and possession of the land belong to
the person who has a fee simple absolute. It is this type of estate to which most people refer when
they speak of buying a house or piece of land. A fee-simple-absolute interest is passed to the
owner’s heirs when the owner of such an estate dies.
fee simple absolute
An ownership interest in which the holder has exclusive rights to ownership and possession of the land; the most
comprehensive type of estate.
Conditional Estate The owner of a conditional estate possesses the same interest as the owner
of a fee simple absolute except that this interest is subject to a condition: If a certain required
event fails to occur or a specific prohibited event occurs, the interest will be terminated. For
example, Todd may be given property rights to a Victorian house on the condition that he is to
preserve it in its original form. If he violates this condition by turning the house into a piano
showroom or a beer hall, the house will either revert to the original owner or be transferred in
accordance with the terms of the deed. (The deed is the instrument used to convey real property.)
conditional estate
An ownership interest in which the holder has the same interest as that in a fee simple absolute except that this
interest is subject to a condition.
Life Estate A life estate is granted for the lifetime of an individual; the right to possess the
property terminates at the individual’s death. On the death of the holder of the life estate, the
property will go to another party as designated by the original grantor. Thus, this future owner has
an interest in seeing that the life tenant does not waste the property; in other words, the life holder
is not allowed to neglect or abuse the property in a way that diminishes the property value. If the
life tenant fails to make necessary repairs or uses the property in ways damaging to its future
value, the future holder could bring legal action against the holder of the life estate to recover
damages for waste.
life estate
An ownership interest in which the holder has the right to possess the property until her or his death.
Future Interest A future interest is a person’s present right to property ownership and
possession in the future. Such an interest usually exists in conjunction with a life estate or a
conditional estate. For example, Joe owns a life estate in Oak Hills Apartments, and on his death
the property will pass to Sarah with fee-simple-absolute rights. Sarah, in this case, holds a future
interest in Oak Hills Apartments, and if Joe allows the buildings to deteriorate from neglect, Sarah
may sue Joe to enjoin him from engaging in waste of the property.
future interest
A person’s present right to property ownership and possession in the future.
Leasehold Estate The interest of a leasehold differs from the interests previously described in
that the holder of such an estate has a possessory interest but not an ownership interest. This
interest is transferred by a contract known as a lease. Both the owner of the property (the lessor,
or landlord) and the tenant (the lessee) sign the lease. The contract generally specifies the
property to be leased, the amount of the rent payments and when they are due, the duration of
the leasehold, and any special rights or duties of either party. A leasehold gives the lessee, or
tenant, exclusive rights to the use and possession of the land, including the right to exclude the
property owner under most circumstances, for the term specified by the lease.
leasehold
A possessory interest, but not an ownership interest, transferred by contract.
The tenant’s and landlord’s rights and obligations may vary according to the lease, but some
states have statutes requiring landlords to keep the property in good condition for the tenant’s use
and giving the tenant the right to withhold rent payments if the landlord fails to maintain the
premises. However, if the tenant fails to make the agreed-on payments without such grounds, the
landlord may evict the tenant. The landlord is not allowed to enter the property except when there
is an emergency or when the tenant has given permission to enter to make repairs. Near the end
of the leasehold, the landlord may enter with notice to the tenant for the purpose of showing the
property to a potential tenant.
Subleasing of the property by the tenant to another party is permissible unless specifically
prohibited by the lease. However, the initial tenant is liable throughout the entire term of the lease
for payment of the rent to the landlord.
Nonpossessory Estates Although most people think of interests in land as being possessory in
nature, some estates do not include the right to possess the property. Such interests include
easements, profits, and licenses. Easements and profits are similar in that they are neither
ownership nor possessory interests, and they are subject to similar rules, but they are not exactly
the same. An easement is an irrevocable right to use some part of another’s land for a specific
purpose without taking anything from it. A profit is the right to go onto someone’s land and take
part of the land or a product of it away from the land. For example, if Bill has the right to drive his
car across Jenny’s property to get to his property, he has an easement; but if he has the right to
go onto her property and remove the topsoil he needs from it for his landscaping business, he
has a profit. Easements and profits can be transferred in multiple ways: by express agreement,
inheritance, necessity, implication, or prescription. If the land that benefits from the easement or
profit is sold, the nonpossessory interest goes with the property. Thus, if Bill sold his land to
Sonny, Sonny would also receive the easement across Jenny’s property. Similarly, if Jenny sold
her property, the new owner would have the burden of Bill’s easement as long as it had been
properly recorded. Of course, just as easements and profits can be created, they can also be
terminated, with the most common method of termination being by agreement. The easement
holder may simply deed the easement back to the property owner. If the easement arose by
necessity and the necessity no longer exists, the easement would terminate.
easement
An irrevocable right to use some part of another’s land for a specific purpose without taking anything from it.
profit
The right to go onto someone’s land and take part of the land or a product of it away from the land.
A license is a right to use another’s property that is both temporary and revocable. For
example, when a person purchases a theater ticket, he or she has the right to a specific use of
the property for a limited time, subject to good behavior. No property interest goes to the license
holder.
license
A revocable right to use another’s property temporarily.
Property Transfer
The owner’s ability to transfer real property is part of the value of property. Any or all of the owner’s
property may generally be transferred to anyone for any price or no price, as the owner desires.
However, to effectuate such a transfer, the owner must follow certain legal procedures. These
procedures are execution, delivery, acceptance, and recording (see Exhibit 8-3), the last of
which page 162 is required to protect the recipient of the property. Such a transfer is presumed to
be the conveyance of a fee simple absolute unless the contrary is stated.
The transfer of the owner’s interest in real property is not always voluntary. Transfer of
property may also take place without the owner’s knowledge and even, in some cases, against
his or her will by either adverse possession or condemnation. In adverse possession, a person
takes ownership of property by treating a piece of real property as his or her own, without protest
or permission from the owner. Most states have established statutes determining a length of time
after which such a possessor receives the ownership interest in the property. The exact lengths
of time vary from state to state, but adverse possession must be actual (the person lives on or
uses the land as an owner would), open (not secretive), and notorious (without the owner’s
permission). In some states, the adverse possessor must have performed certain acts such as
the payment of real estate taxes. In other states, such possession must have taken place under
color of title; in other words, the adverse possessor was operating under the assumption that he
or she actually held the title to the land.
adverse possession
An involuntary property transfer in which a person acquires ownership of property by treating a piece of real property
as his or her own, without protest or permission from the owner.
Condemnation is the legal process by which a transfer of property is made against the protest
of the property owner. As you will remember from Chapter 5’s discussion of the takings clause of
the Fifth Amendment, the government has a constitutional right to take private property for the
use of the public provided it pays the owner fair compensation. This right may be exercised at any
government level, and sometimes it is exercised on behalf of a private company operating to
benefit the public.
condemnation
The legal process by which a transfer of property is made against the protest of the property owner.
When the government decides to exercise its power of eminent domain, it will first make an
offer to purchase the property for what it believes is the fair market value. If the owner either does
not want to sell or feels the price is too low, the government will initiate a condemnation
proceeding, and the court will determine whether the government body bringing the action has a
valid claim that the taking is for a legitimate public purpose. If the court determines that, in fact,
the taking of the property will benefit the public interest, the court will then determine the fair
market value of the property. This price will be paid to the owner, and the property will be
transferred to the government.
It is sometimes difficult to determine whether the exercise of eminent domain is actually for
the public’s benefit when the property will be conveyed by the government to another private
individual. Since the 1980s, businesses increasingly have been appealing to cities to use their
power of eminent domain to assist the businesses in acquiring land that the owners have not
wanted to sell. Because this transference of property from one private individual to another is for
the alleged public use of economic development, an increasing number of state supreme courts
began to address the issue of whether economic development was a public use under the
constraints of the Fifth Amendment. Some state supreme courts found that job creation and
expansion of the tax base did constitute public use, whereas other courts found that they did not
constitute public use. The U.S. Supreme Court finally settled the issue—at least for the present
time—in the 5-4 decision summarized in Case 8-1.
Whereas the Kelo case involves government attempts to take property from individuals to sell
to companies, sometimes governments seek to take the property of one company for use by
another company. For instance, in June 2000, Costco, a large retail chain, wanted to expand its
warehouse in Lancaster, California. Afraid of losing the large store, which threatened to move if it
could not expand, the city considered using its eminent domain powers to acquire an adjacent 99
Cents Only store so that Costco could obtain the property. This example demonstrates that even
businesses may be at risk of losing their property to larger, more powerful businesses.
The response to the Kelo decision was widespread. President George W. Bush issued an
executive order limiting the taking of private property by the federal government to “situations in
which the taking is for public use, with just compensation, and for the purpose of benefiting the
general public, and not merely for the purpose of advancing the economic interest of private
parties to be given ownership or use of the property taken.” During the year and a half
after Kelo, 30 state legislatures enacted statutes limiting the use of eminent domain. Additionally,
in 2006, nine states passed ballot measures restricting the definition of public use for purposes of
eminent domain. Thus, it appears that the ultimate impact of the Kelo decision will be the opposite
of what that decision held; by statute, a much more restrictive definition of public use will govern
government takings. The case is also important because it shows how constitutional issues
directly affect areas of the law, such as property law.
Personal Property
LO 8-4
How do you transfer personal property?
All property that is not land or not permanently affixed to land is personal property. Personal
property may be either tangible or intangible. Tangible property is property that can be identified
by the senses. It is property that you can see or touch. Tangible property includes items such as
furniture, cars, and other goods.
Books are typically thought of as personal property. The owner of a book may write in it and
generally do what he or she wants with it, and the law protects the owner against having the book
taken by someone else. However, the growing popularity of e-books has raised questions about
what rights e-book users have to their e-books. In July 2009, Amazon deleted copies of George
Orwell’s 1984 and Animal Farm directly off people’s Kindles (Amazon’s e-book reader) and
refunded their money. This action has sparked massive controversy over whether Amazon has
the right to remove content that customers had bought from their Kindles. At least one lawsuit page
165 has already been filed as a result of this incident. Much of the outrage has been because
people do not see e-books and physical books as different types of property. Businesses that
offer digital content should be clear about what rights customers have to the content, and they
should make that information well known and visible to avoid problems like the one Amazon is
faced.
Intangible property includes such items as bank accounts, stocks, and insurance policies.
Because most intangibles (with the exception of some that are classified as intellectual property
and discussed later in this chapter) are evidenced by writings, most of the following discussion
applies to both tangible and intangible property. The primary issues that arise in conjunction with
personal property involve the means of acquiring ownership of the property, which is discussed
in the next section.
Voluntary Transfer of Property
LO 8-5
How do you transfer personal property?
Voluntary transfer, as a result of either a purchase or a gift, is the most common means by which
property is acquired. Ownership of property is referred to as title, and title to property passes when
the parties so intend. When transfer of the property is by purchase, the acquiring party gives some
consideration to the seller in exchange for title to the property.
Such a transfer of ownership usually requires no formalities, but in a few cases, changes of
ownership must be registered with a government agency. Sales of motor vehicles, watercraft, and
airplanes are among the primary transfers requiring registration. To transfer such property, a
certificate of title must be signed by the seller, taken to the appropriate government agency, and
then reissued in the name of the new owner.
Gifts are another voluntary means of transferring ownership. They differ from purchases in
that a promise to make a gift is unenforceable. Once properly made, however, a gift is irrevocable.
Three elements are necessary for a valid gift. First, there must be a delivery of the gift.
Delivery may be actual, which is the physical presentation of the gift itself, or constructive, which
entails the delivery of an item that gives access to the gift or represents it, such as handing over
the keys to a car. Second, the delivery must be made with donative intent to make an immediate
gift. The donor makes the delivery with the purpose of turning over ownership at the time of
delivery. Third, there must be acceptance, a willingness of the donee to take the gift from the
donor. Usually, acceptance is not a problem, although a donee may not want to accept a gift
because of a desire not to feel obligated to the donor or because of a concern that ownership of
the gift may impose some unwanted legal liability.
Sometimes, however, it can be difficult to determine whether something is a gift or a loan,
especially when proper documentation is not filed at the time of the transaction. This was the
scenario faced by Don Whittington when he disputed ownership of a 1979 Kremer Porsche
displayed at the Indianapolis Motor Speedway Hall of Fame Museum. Whittington believed that
he was the owner of the Porsche and that he had merely loaned it to the museum in 1980. The
Indianapolis Motor Speedway Foundation believed that Whitt…
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