Real Estate’s Bundle of Rights

As mentioned in the previous post, Real Estate is complicated. Another one of those complications is its bundle of rights. These rights include:

1. The right of exclusive possession.

“One of the most basic building blocks in tenant-landlord law is exclusive possession. It is a concept that means that once a landlord offers a space for rent, a tenant has exclusive possession, and, within the rules of the lease, can do whatever they want within the home (as long as it’s legal, of course).” https://www.tenantresourcecenter.org/exclusive_possession 11/12/2023

• The right of enjoyment.

“A landowner is entitled to use his/her property in such a way that maximizes his/her enjoyment.  However, the enjoyment must not unreasonably interfere or disturb the rights of adjoining landholders or create a private nuisance[i].  Thus, a landowner can use his/her property according to his/her will upon the condition that such use will not disturb or injure any adjoining landowner.

Similarly, a landowner can put his/her property to any lawful use as far as s/he does not deprive the adjoining owner’s right of enjoyment of his/her property.  However, such use by the property owner should not amount to a nuisance in law.”

https://adjoininglandowners.uslegal.com/mutual-rights-duties-and-liabilities-of-adjoining-landowners/landowners-right-to-use-and-enjoyment-of-property/  11/12/2023

• The right of disposition.

This simply means that the owner has the right of the property owner to transfer their ownership rights to another party.  This right gives the owner the right to sell, lease or give away their property.

There are many ways in which the bundle of rights may become dismantled. When this occurs, they have created lesser bundles held by different individuals and called interest. The value of a property varies with the completeness of the interest. Interest in real property is referred to as estates these can vary:

• Ownership Estate/ Titled Interest:  These are estate that have an indefinite length of time. These are referred to as freeholds.

• Fee Simple Absolute: These have the most complete bundle of rights, and thus hold the greatest value. They are only restricted by the government, and prior owners. All the rights of exclusive possession, enjoyment and disposition are passed and possessed by the new owner.

• Fee simple conditional: This type of ownership has a condition in which if something occurs the bundle of rights go back to the prior owner. The position in which the prior owner places themselves during their transfer of their bundle of rights is referred to as being a riveter.

• Ordinary Life Estate and Remainder: This is best explained by example. Suppose you are older and you live next to a growing business. Let’s say that the business wishes to purchase your property but you do not wish to uproot your lifestyle.  Then the two of you may enter into remainder estate where you have the right of possession, enjoyment for the remainder of your life but the business has the right of deposition. You as the owner would be justly compensated for this action.

• Legal life estate: These estates are created by legal actions. They say who the property will transfer to in case of the owner death.

Other Forms of Life Estates

• A Life Estate can also come out of marriage. This ties back into the old English law known as a dower which automatically gave the widow a third of the real property of her decedent husband. Today this dower most likely has become displaced by the will’s directions or the prenuptial agreement.

• Leasehold (Non-ownership) The three way they differ from the freehold estates are:  

1. Their time period is limited.
2. They have no right of disposition or it has been greatly diminished because the property goes back to the owner
3. They are not title interest.

• Tenancy for Years: These leases may be for a few days or a hundred year if the states laws permit them.
• Periodic Tenancy: Any lease that does not have a definite term at its starts is a periodic tenancy.
• Tenancy at Will: Sometimes it is in the owner’s best interest to allow a tenant to stay on for a short period of time then the landlord my offer a Tenancy at Will.

Perhaps for remodeling their may be an agreement that the tenant may stay until written notice is given. The tenant may also start these perhaps they do not wish to enter into a long lease because they have a location being built for them

• Tenancy at Sufferance: This occurs when a tenant refuses to vacate. These differ from trespassing in the fact that the person or organization occupying the property once did so under legitimate leasehold interest. If the owner accepts rental payment this is not Tenancy at Sufferance.
• It should be noted by all that leasehold laws since 1970 have been changing. Though they are based on the old English common law traditions, they have changed. COVID-19 has changed them forever, it appears.

Note: Images on this blog site are from a free source or taken by the author. No image or group of photos are intended to represent the people the author serves. The author does not care about Race (that is a politically correct term that he does not like because we are all of the same Race, the Human Race. He prefers the term ethnicity), color, religion, sex, gender, marital status, disability, genetic information, national origin, source of income, Veteran or military status, ancestry, citizenship, primary language or immigration status. He is a service provider for all people. We will all rise together when we band together and help one another. Joseph Erwin is a Real Estate Broker, DRE # O2131799, and a CA general contractor # B 696662. He’s a member of the CRMLS and The East Valley Association of Realtors located in the Inland Empire region of Southern California.