Vocabulary tricks that make terms stick

Whether something is a fixture (real property) or personal property is one of the most tested topics on the real estate exam. MARIA gives you the 5 tests courts use. Intent is the most important — what did the person intend when they installed it? Agreement of the parties controls if there is one.

The bundle of rights is the concept that property ownership is actually a collection of individual rights. You can hold all of them or transfer some while keeping others — for example a landlord transfers the right to Possess and Use but keeps the right to Transfer and Encumber. Government can limit rights through PETE (police power, eminent domain, taxation, escheat).

Dwelling: a place to live (house, condo). Unit: an apartment or condo unit. Structure: a building or improvement. Tract: a parcel of raw land. Real property = land plus anything permanently attached to it.

Real property: land and everything permanently attached (buildings, fixtures, trees). Personal property (chattel): movable items not permanently attached. The test: is it a fixture? MARIA — Method of attachment, Adaptability, Relationship of parties, Intention, Agreement.

Grant deed: grantor guarantees they own the property and haven't sold it to anyone else. Implied warranties of title. Quitclaim deed: grantor transfers whatever interest they have — could be full ownership or nothing. No warranties. Used to clear title defects, between family members, in divorce.

Financial encumbrances: mortgages, deeds of trust, judgments. Easements: right of others to use the property. Liens: financial claims against the property (tax lien, mechanic's lien). Title restrictions: CC&Rs, deed restrictions, zoning.

Easement appurtenant: attached to the land, transfers with the property. Dominant tenement (benefits) and servient tenement (burdened). Example: right-of-way across a neighbor's land. Easement in gross: personal right, not attached to land. Utility company right-of-way, billboard rights.

General rule: liens are paid in order of recording date. EXCEPTIONS: Property tax liens always have first priority regardless of recording date. Special assessment liens (street improvements) also super-priority. Then recorded mortgages in order. Mechanic's liens may relate back to start of construction.

Lender's (mortgagee) policy: required by almost all lenders, protects lender's interest up to loan amount. Owner's policy: optional but strongly recommended, protects buyer's full equity. Both protect against defects in title that existed BEFORE the policy date — not future events.

Escrow agent (title company, attorney, or escrow company depending on state) holds: earnest money deposit, loan documents, deed, closing funds. Releases everything simultaneously when all conditions met. Protects both parties — seller knows funds are secured, buyer knows deed won't transfer until paid.

Riparian rights (rivers and streams): landowner has the right to use water flowing past their land but cannot unreasonably diminish flow for downstream users. Littoral rights (lakes and oceans): landowner owns to the high-water mark. Prior appropriation states: water rights based on 'first in time, first in right.'

A person can gain title to land by occupying it openly and continuously for the statutory period (varies by state, typically 5-21 years). OCEAN: Open (visible, not hidden), Continuous (uninterrupted), Exclusive (not shared with owner), Actual (physical use), Notorious/Hostile (without owner's permission).

5th Amendment: government can take private property for public use but must pay 'just compensation' (fair market value). Condemnation: the legal process. Inverse condemnation: when government action damages property without formal taking. Escheat: property reverts to state when owner dies with no heirs.

Residential (R): housing — single family (R-1), multi-family (R-2, R-3). Commercial (C): retail, offices, restaurants. Industrial (I): manufacturing, warehouses. Agricultural (A): farming, ranching. Variance: exception to zoning rules. Non-conforming use: legal use that predates the zoning change.

Easement = permanent right that runs with the land and survives sale. License = revocable temporary permission. Easements are recorded; licenses are not.

Deeds transfer ownership but offer very different buyer protections.

General rule: first recorded = first priority. Exception: Property tax liens ALWAYS have first priority regardless of recording date.

Escheat is a government power: property of someone who dies intestate with no heirs reverts to the state. One of the four government powers — remember PETE (Police, Eminent Domain, Taxation, Escheat).

Real property ownership = bundle of rights: Dispose (sell, gift, will), Enjoy (use however you wish within law), Encumber (mortgage, grant easements), Possess (occupy and exclude others), Control (improve and modify). You can convey individual rights without selling the property — grant an easement (right to use), lease (right to possess), mortgage (financial encumbrance). Eminent domain takes the entire bundle. Zoning limits the control right. Easements limit the exclude right.

Joint Tenancy: equal shares, right of survivorship (deceased owner's share passes to surviving joint tenants — NOT to heirs). Four unities required: Time, Title, Interest, Possession (TTIP). Any joint tenant can "sever" into tenancy in common. Tenancy in Common: unequal shares allowed, NO right of survivorship — shares pass to heirs by will or intestacy. Most common form for investors. Community Property (9 states): property acquired during marriage owned 50/50 — both spouses must sign. Tenancy by Entirety: married couples only, right of survivorship, cannot sever without spouse's consent.

Required: grantor (must be competent), grantee (must be identifiable), legal description of property, words of conveyance (granting clause), grantor's signature. NOT required: consideration/price (can be $1 or "love and affection"), recording (valid without), acknowledgment/notarization (required for recording but not for validity), witnesses (varies by state). Delivery and acceptance: deed must be intentionally delivered by grantor and accepted by grantee — delivery is complete when grantor parts with control. Recording: protects grantee against subsequent claims (constructive notice).

Police Power: regulate land use for health, safety, welfare — zoning, building codes, environmental regulations. No compensation required. Eminent Domain: government takes private property for public use — REQUIRES just compensation (5th Amendment). Process is condemnation. Taxation: property taxes are a lien on real property — failure to pay leads to tax sale. Escheat: if owner dies with no will and no heirs, property reverts to the state. Police power is the broadest and most frequently tested.

Surface rights: the right to use the surface of the land — buildings, farming, etc. Air rights: the right to use the space above the surface. Can be sold to developers (air rights transfers in NYC — building over railroad tracks, etc.). FAA regulates flight above certain altitudes — limits absolute air rights. Subsurface rights (mineral rights): the right to extract minerals, oil, gas, and water below the surface. Can be severed from surface rights — mineral estate can be owned separately. Severance: when subsurface rights are separated from surface ownership, two distinct estates are created — each can be sold.

Zoning: government regulation under police power — classifies land use (residential, commercial, industrial). Enforced by government. Can be changed through variance, rezoning, or conditional use permit. Deed restrictions (CC&Rs): private agreements recorded in the chain of title — enforced by neighboring landowners or HOA. Run with the land. Cannot be changed by zoning. When they conflict: most restrictive rule governs. Example: zoning allows duplexes, but CC&Rs restrict to single-family → single-family only. A zoning change doesn't override a deed restriction. Obtaining a variance doesn't help if CC&Rs prohibit the use.

Chain of title: the complete sequence of recorded documents showing every ownership transfer from the original grant (patent from government) to the current owner. Title search: examining the chain at the county recorder's office to verify ownership and find encumbrances. Abstract of title: a summary of all recorded documents affecting a property. Title defect (cloud on title): anything that casts doubt on ownership — forged deed, missing signature, undischarged mortgage, unresolved lien, missing heir. Title insurance: insures against defects in the chain including those not found in the search. Marketable title: reasonably free from defects that a reasonable buyer would object to.

Homestead exemption: state law that protects a portion of a primary residence's equity from forced sale by unsecured creditors (medical debt, credit card debt, judgment creditors). Amount varies dramatically by state — Florida: unlimited value, but capped at 1/2 acre in a city or 160 acres outside one. Texas: unlimited value, but capped at 10 acres urban or 100-200 acres rural. California: $300,000-$600,000. Some states: $0. What it protects against: unsecured judgment creditors trying to force a sale. What it does NOT protect against: mortgage foreclosure (voluntary lien), property tax liens, mechanic's liens, HOA liens. Must be primary residence — vacation/rental homes don't qualify. Automatic in some states; requires filing in others.

Condemnation: government exercises eminent domain — files a lawsuit (condemnation proceeding) to take private property for public use. Owner is paid just compensation (fair market value). Owner has right to contest the necessity of the taking and the amount of compensation. Partial taking: only part of property is taken — owner may be compensated for the remainder's loss in value (severance damages). Inverse condemnation: owner sues the government — government has taken or damaged property without formal condemnation and without paying compensation (flooding neighbor's land, building a noisy highway). Regulatory taking: zoning that strips all economic value from property may require compensation.

Estate for years: lease with a definite start and end date — automatically terminates on end date, no notice required. Any length qualifies, even one day. Periodic tenancy: automatically renews for successive periods (week-to-week, month-to-month) until either party gives notice. Notice usually equals one period (30 days for month-to-month). Estate at will: either party can terminate at any time with reasonable notice — no fixed term. Tenancy at sufferance (holdover): tenant's lease expired but they remain without landlord's permission — landlord can evict or accept rent (creating new periodic tenancy). Accepting rent from holdover converts to periodic tenancy.