IntroductionThe real estate market is of vital importance to market economies on both provisional rent and investment levels. For example, the housing market … Expand.
We examine the impact of heterogeneous investors with asymmetric bargaining positions on transaction prices in private commercial real estate markets. Using a dataset that contains nearly , … Expand. View 1 excerpt. Analyzing capital expenditure in commercial real estate assets. The ability of Commercial Real Estate to provide strong current income returns has long been one of its benefits of inclusion into a long-term portfolio.
Capital Expenditures can significantly hamper … Expand. Financial management techniques used by residential property developers. Real estate development can be one of the largest contributors of wealth in society; and it plays a key role in determining the level of economic prosperity of individuals, business firms and the … Expand. The strong building: a case study in direct investment.
What other factors affect the volatil- 5. Real estate assets and markets are unique when compared ity of real estate production? Discuss the primary ways that. Solutions to Concept Checks 1. A major determinant between real and personal property is 3. About 61 percent of the U. Tangible assets are physical assets such as land, automo- 4. The four capital market quadrants include private equity, pri- biles, and buildings.
Intangible assets are nonphysical, vate debt, public equity, and public debt. The private equity including patents, financial claims, or contractual agree- market includes transactions of real property between indi- ments.
Real estate is a tangible asset, but a bundle of intan- viduals, firms, and institutions. Private debt includes the trad- gible rights is also associated with the ownership and use of ing of home mortgages. Investors trade real estate companies the property. Mortgage- immobile, and therefore location and its accessibility are backed securities are traded in the public debt markets.
Third, real estate is a localized, segmented mar- 5. Commercial real estate rental rates are determined in local ket due to local competition and the heterogeneous nature of user space markets, while property values are determined the product. Finally, real estate transactions have high trans- largely in the local property market. First, real estate is a heterogeneous product distinguished by its age, building design, and location. Second, real estate is. At the federal level, many housing programs exist.
Dictionary of Real Estate Appraisal, 5th ed. Geltner, D. Miller, J. Clayton, and P. Archer, W. Mason, OH: Cengage Learning, Edwards, K. Your Successful Real Estate Career, 5th ed.
New Ling, D. Careers, Rev. Careers in Real Estate. Contemporary Books, Friedman, J. Harris, and B. New York: Vault Reports, book, 7th ed. Nonpossessory Interests Forms of Co-Ownership 2 State the distinguishing characteristic of an Indirect Co-Ownership through a Single Entity estate, list three types of freehold estates, and Direct Co-Ownership distinguish a freehold estate from a leasehold.
Timeshare Rights Related to Water 3 Define an easement, distinguish it from a Rights to Oil, Gas, and Minerals Appendix: Property Rights Relating to Water license, distinguish two basic types of easements, and identify four examples of each. Introduction When we purchase real estate, it is not so much the ground and bricks that we acquire but rights to do certain things with them. This understanding opens the window to a wealth of questions and possibilities.
The diversity of the possible claims rights to land is rich, with important implications for value. In fact, no estimate of value is meaningful until we know what rights are involved.
This chapter provides a tour of these possible claims on real estate, to some of their uses, and to some of the resulting effects on value. Several concepts are necessary to understand the nature of real property. The very concept of rights is the beginning point. Next, the difference between personal rights and property rights is important. Finally, we must distinguish between personal property and real property. A variety of nonpossessory rights also can affect the value of real property, including restrictive covenants, easements, and liens.
Ownership of the bundle can be by multiple persons. These co-ownership claims can arise both from traditional law and from laws enacted by states, and they can occur in a variety of forms. A special source of co-ownership claims is marriage, and it is important to under- stand the variations in joint property rights that automatically arise from that union. Real property often involves bodies of water and the use of groundwater.
It is impor- tant to understand the issues involved with water rights. Finally, an important part of land is rights to minerals, including oil and gas.
First, rights are claims or demands that our government is obligated to enforce. For example, ownership of a car gives us the right to possess it. If someone steals it, we can expect law enforcement to try to reclaim it for us and punish the offender. This is in contrast to claims that are enforced only by force or threat.
For example, a street gang may claim part of a street by intimidation, but government will not honor and support its claim. A second characteristic of rights is that they are nonrevocable.
We can contrast this, for example, with the typical office space usage: Employees may have an office in which they have considerable privacy; have liberty to arrange, equip, and decorate with discretion; and can come and go freely. But the employees understand that this is not ownership. They have this access by permission of the employer and it is revocable.
Property rights are not revo- cable. The ownership claims to a residence or other real estate cannot be canceled, ignored, or otherwise lessened by any other private citizen. While they may be diminished signifi- cantly by action of government in the interest of public health, safety, and welfare, there is a limit to the restriction. The power of government to take private property is called eminent domain.
It, and the related legal procedure, condemnation, are discussed in Chapter 4. The nonrevocable nature of rights suggests a third aspect of property rights: They are enduring. They do not fade away with time. The government is obligated to defend them in subsequent generations just as now, and it does not have the power to abandon that obligation.
What distinguishes rights from permission? Society is concerned with two kinds of rights: personal rights and property rights see Exhibit In the United States, personal rights personal freedoms derive primarily from the Bill of Rights and other amendments and clauses of the U. The principal rights in property include exclusive possession, use enjoyment , and disposition. If we own a computer, for example, we have the right to: 1.
Prevent others from using it. Enjoy the use or benefit of it for ourselves. Get rid of it as we see fit but without harm to others. As suggested by Exhibit , the two kinds of rights abut each other, and can conflict in important ways. See Industry Issues Property is divided into two classes, real and personal. Real property is defined as rights in land and its permanent structures.
Personal property is the rest; that is, it is sim- ply rights in any other kind of object, including intellectual matters. Personal Property Rights Rights Freedom of Vehicles assembly Household goods Freedom of Stocks and bonds expression Patents No unreasonable search or seizure Software Personal Music No double jeopardy or self-incrimination Property Protection of life, Real Residence liberty, and property Property Airport No taking property Commercial building without Government building compensation Religious building Speedy, public, Streets, railroads, bridges, etc.
Real property is rights in land, but what is land? It is the surface of the earth, of course, but, as shown in Exhibit , it also includes rights to air space above the land either up to the height it is technologically feasible to erect structures or to the level where airspace becomes reserved for air traffic.
Also, it includes rights to the subsurface down to the cen- ter of the earth, and to the minerals, including oil and gas, contained therein. In large cities many prominent structures are built on air rights alone, as exemplified in Exhibit Oil, gas, and mineral rights are discussed briefly at the end of this chapter.
In seven southwestern the way of a road-widening project turned up way to widen a road that would serve the states protecting its habitat along streams the heat on tree-sitter, John Quigley, trying to proposed 21,home Newhall Ranch has threatened to end centuries-old cattle protect it, charging him with trespassing and development north of Los Angeles.
Supporters placeable natural resource. In the Pacific Northwest, millions of sleeping below the times and the lifetimes of maybe 10 acres of mature forest were restricted from tree were generations. To date, the habitat protection has a greater challenge to chain-link fence bly the most ambitious tree relocation ever. Endangered species act restricts use of opened. By 1, actions were taken to stabilize the situation troubled plants and animals, has encoun- ranches and 4.
The distinction between personal rights and property rights is far from simple see Industry Issues However, this issue is beyond the scope of the current chapter. It is discussed at length in Chapter 4. We instead focus our attention on the distinction between personal property and real property. Real Property and Personal Property: The Problem of Fixtures A fixture is an object that formerly was personal property but has become real property.
This special class of real property is an enduring problem in real estate. If a valuable antique chandelier is hung in a new home, is it then part of the real property?
Are custom draperies real property? What about removable shutters or storm. What about a kitchen range or refrigerator? This ambiguity between personal property and real property has long been recognized, and rules have evolved in the com- mon law tradition to help sort it out.
The manner of attachment: The question in this rule is whether removal of the object results in damage to the property. Clearly, for example, removal of vinyl floor cover- ing would damage a building. But a court may regard removal of wire connecting a dwelling to cable service as being damage as well.
The character of the article and manner of adaptation: Under this rule, items that have been custom designed or custom fitted tend to be regarded as fixtures. Examples might include window screens, storm windows, church pews, custom bookshelves, custom draperies, or custom security systems. The intention of the parties: This rule refers not to the private intention of the parties but to the facts of the situation and the intention that an observer familiar with custom- ary practice would conclude from them.
A major example would be kitchen appli- ances: If a kitchen range or refrigerator is in a single-family residence being sold, it normally is expected to remain with the seller. On the other hand, if the appliances are furnishings in a rental apartment building, they normally would be expected to remain with the building. Thus, the rule of intention would treat the appliances as personal property in the single-family residence, but as fixtures in the apartment.
Relation of the parties: For landlord and tenant relationships, special versions of the rule of intention have evolved in determining fixtures: a. Trade fixtures, which are items installed by a commercial tenant to conduct its business, are always considered personal property of the tenant unless they are abandoned at termination of the lease.
Agriculture fixtures, such as fences, also are considered property of the tenant. Anything that is installed by the tenant remains personal property. Residential tenants also tend to be given the same protection. The rule of intention is the most recent, and dominant, rule. That is, if there is conflict among the rules, the rule of intention generally will prevail.
There is a very practical importance to the fixture issue for property value. A contract for the sale of real estate applies only to real property unless personal property involved is explicitly included. Frequently when property is purchased, including personal residences, there are items on the property that may or may not be fixtures. Thus, who owns them after sale of the property may not be clear. In any real estate transaction, it is important for both parties involved to carefully review the property with this issue in mind, and to draw up the contract so that there is no ambiguity regarding disposition of these items.
The Real Property Bundle of Rights The owner of real property holds a bundle of rights that is complex. As noted above, this bundle is some combination of the right of exclusive possession, use enjoyment , and disposition. But this bundle can be dismantled in many ways, creating lesser bundles, held by different individuals.
These bundles of rights are referred to as interests. The value of. Common law is the body of traditional law derived from the ancient courts of England, constantly evolv- ing through new court rulings or case law. T-V Transmission, Inc. County Board of Equalization, N. Below, we examine the possible variation in the bundle. What is the dominant rule for determining whether something is a fixture?
Possessory Interests Estates Interests in real property that include possession are called estates. In between are a variety of bundles, differing by the combination of other rights included. The range of estates is displayed in Exhibit The most complete estate, the fee simple absolute, is singled out, as are the weakest, ten- ancy at will and tenancy at sufferance.
Each possible estate is discussed below. Ownership with inheritance Fee simple conditional with reverter interest. Ownership estates Ordinary life estate freeholds with remainder interest. Ownership without Legal life estate inheritance homestead, dower with remainder interest.
Estates Tenancy for years. Leasehold Periodic tenancy estates. Ownership Estates Freeholds or Titled Interests. The more substantial or complete estates are those that are indefinite in length.
These are the titled interests we commonly think of as ownership. In the common law term, they are freeholds. They can differ by variations in the right of disposition. Fee Simple Absolute. Fee simple absolute is the most complete bundle of rights possi- ble, and has the greatest value.
Subject to the limitations imposed by government or by prior owners, all possible rights of exclusive possession, use and enjoyment, and disposi- tion are possessed by the owner. This is the traditional concept of landownership. Fee Simple Conditional. In a fee simple conditional, ownership is subject to a condition or trigger event. This uncertain interest held by the previous owner or heirs is called a reverter interest.
For example, an owner could convey a small apartment building to a university but require that the property be used for a scholarship dormitory for women students. As long as the university uses the property for this purpose, it may enjoy all the rights of a fee simple owner. The resulting uncertainty that this kind of condition creates can, of course, greatly reduce the value of ownership. Ordinary Life Estate and Remainder.
In an ordinary life estate the rights of disposition of the fee simple absolute are unbundled and separated completely. For example, suppose an older homeowner lives adjacent to an expanding university, and the university would like to acquire her residence for future university use. Suppose also that she is willing to sell, but is not interested in moving. A possible solution is for the university to purchase a remainder estate while the owner retains a life estate.
In this arrangement the homeowner retains all rights of exclusive possession, use, and enjoyment for her lifetime while the university gains the right of disposition. The owner is compensated either through cash payment or a tax deduction if the remainder is donated and simplifies the eventual settle- ment of her estate, while assuring the continued right to occupy her home.
At the time of her death the life estate and remainder estate are rejoined, becoming a complete fee simple absolute owned by the university. Legal Life Estate. Legal life estates are created by the action of law. In Florida, for example, a family residence that is declared a homestead carries the possibility of becom- ing subject to a life estate. While intended to protect the surviving family, this law can create as many problems as it solves. If the surviving spouse needs to sell the residence to relocate, a trustee must be created to act on behalf of the minor children to convey their interests in the sale.
Thus, additional legal costs and delays are likely to result. Other Life Estates. Life estates also can arise out of a marriage. In the English common law tradition a right known as dower automatically gave a widow a life estate in one-third of the real property of her decedent husband. Today, however, dower generally has been displaced, as discussed later in this chapter. While rare, and normally inadvisable, the life estate could be tied to the life of someone other than the owner.
For this reason, families in Florida are advised to acquire their primary personal residence by the special joint ownership known as tenancy by the entirety discussed later in this chapter. Leasehold Nonownership or Non-freehold Estates. Leasehold interests are possessory interests and are therefore estates. They differ from freehold estates in three respects: 1 They are limited in time.
Essentially, they are a temporary con- veyance of the rights of exclusive possession, use and enjoyment, but not the right of disposition. Tenancy for Years Estate for Years. A tenancy for years is a leasehold interest for a specific period of time. It may be for a few days, or for hundreds of years, state law permit- ting.
Until recently the relationship between landlord and tenant was governed entirely by the terms of the lease. However, as explained below, a shift from rural to urban society and changing social needs have altered this. While all leases should be put in writing, this is especially true for the lease conveying a tenancy for years because the lease may be the only tangible evidence of the landlord—tenant understanding. If the term is for more than one year a year and a day, or more the lease must be in writing to be enforceable.
This requirement results from the Statute of Frauds, discussed in Chapter 3. Periodic Tenancy. Any lease that has no definite term at the start is a periodic tenancy. In sharp contrast to the tenancy for years, the lease conveying the periodic tenancy often is oral and, hence, is rather informal. While simpler and quicker, this arrangement carries more risk of landlord and tenant misunderstanding.
The length of the period is implied by the payment period. Every state has specified requirements for notification prior to termi- nating a periodic tenancy, with both landlord and tenant subject to the same requirements. Generally, the minimum notice period is one-half the payment period, and begins the day after actual notification, running to the end of the last day of the rental period.
The use of written rental contracts is a superior practice that reduces risk for both parties, thus adding to the value of the property. Tenancy at Will. Sometimes at the end of a lease there is a short period of time when it suits both landlord and tenant for occupancy to continue. For example, this might occur if the building is being sold or renovated in the near future. Tenancy at Sufferance. A tenancy at sufferance occurs when a tenant that is supposed to vacate does not.
This tenancy, at least until the landlord accepts a rental payment, differs from trespassing only in that the tenant previously occupied the property under a legitimate leasehold interest. Changing Leasehold Concepts. Dramatic change has occurred in leasehold law in recent decades. Until around , the law of leasehold estates had evolved little from the English common law tradition of rural leaseholds. In that setting, the obligation of the landlord was little more than to get off the land and leave the tenant alone.
In an urban setting of residen- tial apartments, this treatment of landlord—tenant relations was woefully inadequate. As a result, states have enacted elaborate residential landlord—tenant laws that take great strides in defining the rights and obligations of both parties under a residential lease.
The laws address such matters as obligations for care and repair of the premises, rights of entry, handling of deposits, notification requirements, and many other matters. In short,. In Florida, for example, the periods for notification are as follows: for year-to-year, three months; for a quarterly period, 45 days; for a monthly period, 15 days; for a weekly period, 7 days.
The use of the term here is derived from common law usage. More about modern statutory Summarizes residential landlord landlord—tenant relationships is available on the websites in the margin, and in Chapter Then can affect the value of real estate significantly. An easement is the right to use land for a specific and limited purpose. A rich variation Widely respected academic source of applications lies between these extremes, as we show below.
Easements Appurtenant. Easements appurtenant have two distinguishing features. First, the easement appurtenant involves a relationship between two adjacent parcels of land. The dominant parcel benefits from the easement while the servient parcel is con- strained or diminished by the easement.
See Exhibit Easements appurtenant are of two types: affirmative and negative. The examples below clarify this difference. Dominant Parcel. Affirmative Easements Appurtenant. Affirmative easements give the dominant parcel some intrusive use of the servient parcel. There are many examples: 1.
A driveway easement across one parcel to another. A drainage easement for storm water from one parcel across another. Access across a parcel for sewer service. A common wall easement requiring the wall of one townhouse to support the floors, roof, and structure of an adjacent one.
A common drive easement where owners of adjoining lots must permit each other to use a driveway lying on their shared property line. Reciprocal parking easements among separately owned parcels in a shopping center. Negative Easements Appurtenant. Negative easements allow no intrusion onto the servient parcel. One example of a negative easement appurtenant is a sunlight easement www. An easement in gross is the right to use land for a specific, limited Conservation easements as purpose unrelated to any adjacent parcel.
While there is one or more servient parcels, there described by the nature is no dominant parcel. Further, the easement in gross, unlike the easement appurtenant, is conservancy. Examples of easements in gross can include rights-of-way for roads, railroads, irrigation water, communication and electrical cables, gas lines, or billboards; and access for timber or crop harvesting, or for mineral or oil extraction. Not surprisingly, easements in gross are sometimes referred to as commercial easements, although noncommercial versions also exist.
Noncommercial exam- ples might be access for recreation purposes—fishing, hunting, boating, or snowmobiling— granted by a landowner to friends or family members. One significant issue with a commercial easement in gross is whether it is exclusive or nonexclusive. The owner of an exclusive easement in gross holds all the easement rights, in effect, and can extend them to others, thus giving additional persons access to the easement and potentially increasing the usage burden on the servient land.
Haupt — in Real estate business. Author : Kathryn J. Haupt File Size : Ring — in Real estate business. Author : Alfred A. Ring File Size : Real Estate Principles Metzger — in. Author : Metzger File Size : Real Estate Principles Spodek — in.
This prediction model correlated past real estate cycle pinpoints to economical driving forces in order to create an ongoing formula. The study used a descriptive, secondary interpretation of raw data already available.
Quarterly data was taken from the study's seven independent variables over a year span from to to examine the correlation over two real estate cycles. Public information from 97 quarters was also gathered on seven topics: consumer confidence, loan origination volume, construction employment statistics, migration, GDP, inflation, and interest rates.
The Null hypothesis underwent a test of variance at a. Multiple regression analysis uncovered that four of seven variables have correlated and could predict movement in real estate cycle evidence from previous data, based in the Inland Empire. GDP, interest rates, loan origination volume, and inflation were the four economical driving variables that completed the Inland Empire's real estate prediction model and global test.
Findings from this study certify that there is correlation between economical driving factors and the real estate cycle. These correlations illustrate patterns and trends, which can become a prediction model using statistics.
By interpreting and examining the data, this study believes that the prediction model is best utilized through pinpointing an exact numerical location by running calculations through the established global equation, and recommends further research and regular update of quarterly trends and movements in the real estate cycle and specific variables in the formula.
The success of qualified and professional resources, the development of new approaches and methodologies in the real estate have already provided positive results, in terms of better quality offer of the proprieties. In a fully evolved market, in fact, the adherence by professionals to a specific code of conduct and the spread of shared procedures acknowledged as standards, represent a guarantee for quality. The experts must be able to compete on international markets in the field of technical and of economic management of existing buildings and urban environments.
The main scope of this text is to provide methods and tools to be used for technical-economic evaluation on purchase or managing and valorize of building and property. In particular, it is addressed to those profiles in the real estate market and to the students that aim at a potential employment gravitating around the economic-financial management.
This scope is achieved through formative procedures that include the description of the main processes and instruments that characterized the real estate operations worldwide.
The main methodologies refer to the ones adopted by the operators of this sector and to the most common texts that include scientific publications, rule and codes widespread on a national and international scale. This book presents a new way of thinking about, teaching, learning, and practicing real estate development.
Real Estate Development Matrix describes the process in a two-dimensional model and presents seven Development Stages which form the horizontal axis, and eight sets of Development Tasks which form the vertical axis to define a cell matrix.
In each cell, money is spent and risks are taken to achieve certain tasks and thereby create or destroy value. This holistic process considers the entire life cycle of real estate from its "green field" inception to its "brown field" state.
The book is written by a real estate developer and academic, and the presented material is conceptual, practical, and non-technical. Jargon has been minimized as much as possible as the author introduces an entirely new model for real estate development that is both academically authoritative and developed in practice. It is aimed at a general professional audience participating in the development process, but equally the book is ideal for use as a textbook in undergraduate and graduate courses in real estate development, and an excellent supplemental text for business courses discussing real estate finance and investment.
It may also be used as a textbook for professional courses, workshops, or seminars in real estate development. This handbook equips academics, practitioners, and students with an understanding of the cutting-edge developments and applications of emerging blockchain technology. Covering the basic concepts while showcasing practical applications in intricate real-world situations, readers benefit from a useful balance of detailed and user-friendly coverage.
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