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Appurtenant

Appurtenance? Appurtenant? What does it all mean? For starters, appurtenant is a legal term to describe an object attached to something. Appurtenance is the item itself once it becomes part of the property. These two terms come into play in real estate law and can be a bit of a tongue twister; luckily, we have the answers!

What is Appurtenant?

Definition: Appurtenant is an adjective meaning it is attached to something.  If something is appurtenant, it belongs to something else, either attached to or by law. Typically anything that has been installed, or has become part of a property, is considered to be appurtenant.

Example: A great example of something described as appurtenant is the relationship between a barn and a house or an easement to some land. Typically, these things are attached to the property by law and are described as appurtenant.

What is an Appurtenance?

Definition: Appurtenance is a noun; describing an item that is attached to something. In real estate, after something is installed onto a property, it can be called an appurtenance. Meaning it is passed on to a new owner if the property is sold.

An appurtenance can be something tangible like a tree, barn, water tank, or something abstract such as an easement.

Example: A fantastic example is if a homeowner installs a new water tank onto his property. If he sells the house, the water tank typically will stay with the property and go to the new homeowner. The water tank itself is called an appurtenance.

What is the Difference Between Appurtenant and Appurtenance?

These two terms are usually applicable to property rights or items passed along with the sale of properties. The difference is appurtenant is an adjective to describe an attached object, while appurtenance is the item once it becomes attached to the land. So one is the noun, and the other is the adjective to describe it.

Check out some textbook examples:

  • Sally is selling her property and advertises her home: “Comes with many appurtenances.” Theses objects are a new washer, new dryer, and an in-ground pool.
  • Sigfrid asked his real estate agent “Is that shed appurtenant?” The real estate agent quickly responded “Yep, it comes with the property!”

What is an Appurtenant Easement?

An easement is a right held by one person to use the land of another for a specific purpose.  An appurtenant easement is a type of easement that “runs with the land” as opposed to without, meaning if the property is sold the easement remains with the land.

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Water Rights

Having land connected to water can be a huge plus for some property owners. It also can be sought after for businesses. Water rights can be somewhat complicated when it comes to the legality, but don’t worry, that’s what we’re here for! In short, water rights are the rights to use rivers, lakes, or oceans that fall adjacent to land.

What are Water Rights?

Definition: Water rights are the rights to use rivers, lakes, or oceans that fall adjacent to land. Owning land connected to water can add lots of value to a property. Water rights are appurtenant meaning they run with the land and not to the owner. Different types of waters rights exist based on various forms of water and where the property lays. The two basic forms of water rights are:

  • Riparian rights
  • Littoral rights

Example: Many oceanfront businesses adjacent to water may depend on their water rights for business. If for some reason, their rights are infringed, or compromised, it could be detrimental to their operations.

What are Riparian Rights?

Under riparian rights, all landowners whose properties adjoin a river or stream, have the right to make reasonable use of it as it flows through or over their properties. The only limitation owners have is they cannot stop or prevent the flow of water.  

Riparian rights vary from state to state but most grant unrestricted use. Unrestricted use means owners have the right to access it for swimming, boating, and fishing, build docs, etc.

The general rule of thumb is the riparian owner has the right of access and use, to and from the waters, they just cannot stop or prevent the flow of it.

It’s also important to note that in most cases, this form of water is considered navigational. Navigational water means it is treated as a public highway; meaning the public has the right to travel on it.

What are Littoral Rights?

Littoral rights pertain to landowners whose land border large, navigable lakes and oceans.

Littoral rights are usually concerned with the use and enjoyment of the shore. The landowner has access to the water but only owns the land up to the edge of the water. While the state owns the land under the water, and the United States has an overriding interest in preserving it for public navigation.

What is Water Diversion?

Water diversion is the removal or transfer of water from one place to another.  As a general rule of thumb, it’s best not to divert any water if possible. Diverting water can leave a negative impact on the surrounding environment and ecosystem.

In some cases, like owning a farm water diversion may be required, but it’s essential to make sure it’s legal before doing it. Each state and municipality will have regulations and limits on the extent of water diversion that is allowed. Some places may allow for certain irrigation uses of the water, while others may not.

Depending on where you live, landowners may apply for water diversion rights that would allow for the transport of water away from its source. As always it’s best to check with your local municipality before doing so.

What is the difference between Water Rights?

To recap, riparian rights are those rights and obligations of land adjacent to watercourses such as navigable streams and rivers, whereas littoral rights are a landowner’s claim to use of the body of water bordering his or her property as well as the use of its shore area.

Water rights are appurtenant, meaning they run with the land and not to the owner. In other words, if an oceanfront property is sold, the new owner gains the littoral rights, and the seller relinquishes his or her rights.

A good way to remember the difference is when you hear the word littoral think of lake, L for lake. And when you hear riparian rights think of river. R for river. Pretty easy right?

Other Important Water Rights Terms

Accretion

Accretion is the slow process of growth or acquisition of land, typically when soil is deposited by the natural action of water. Long term accretion can actually increase the size of a property.

Erosion

The opposite of accretion, erosion is the wearing away of land or soil by the action of wind, water, currents, or ice. Long term erosion can decrease the size of a property.

Avulsion

Avulsion is the immediate action of adding or tearing away land by violent acts from natural causes. An example of avulsion is a dam breaking or a hurricane.

The difference between accretion, erosion, and avulsion is the element of force. Accretion and erosion is a gradual loss or addition to land, while avulsion is a sudden addition or violent subtraction.

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Bundle of Rights

Real estate property holds with it specific rights. These legal rights can be split up and given to different parties and are called the bundle of rights.

What are the Bundle of Rights?

Definition: When a person purchases property, he or she is given the rights to the property; these rights can be split up and given to different parties. Think of the bundle of rights as a bundle of sticks. Each stick is different and can be separated from each other. The bundle of rights was designed to simplify the complexities of property ownership. The five legal rights included in the bundle are:

  • The right of possession
  • The right of control
  • The right of exclusion
  • The right of enjoyment
  • The right of disposition

Example: A community land trust is an excellent example of the distribution of the bundle of rights. In a community land trust, the responsibilities of ownership and management are often divided from the rights to use the property. A common community land trust strategy is to hold ownership over the land but to sell the residential buildings and their rights within it. This allows the trust to sell the homes at a lower rate and promote low-income families to find affordable housing.

What are the Five Different Rights?

Right of Possession: This right means the property is owned by whoever holds the deed or title. Once you close a real estate deal and have the title in your hands, it’s yours. When you have a deed in your name and no lien is against the property, you own it.

Right of Control: This right means according to the law, the owner controls the use of the property. That means the title holder has the ability to manage the use of the property in any means deemed legal within the jurisdiction in which the property exists.

Right of Exclusion: This right means others can be excluded from using or entering the property. So in plain terms, you don’t have to allow anyone to enter your owned property. Obviously, there are some exceptions like law enforcement.

Right of Enjoyment: This right means the owner can enjoy the use of the property in any legal manner and participate in any activities he finds pleasurable while on the property. This means as an owner you can be as loud as you want and pretty much do whatever you want as long as isn’t against the law or local ordinances.

Right of Disposition: This right means the title holder can sell, rent or transfer ownership at will. That means, whoever holds the title can sell, rent or transfer whenever they want, either permanently or temporarily, to another party.

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Government Power

Government powers within the world of real estate can be complex. In short, government powers enforce laws to promote the general welfare of the United States and its people.

What is Government Power?

Definition: Government power is the constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support the public health, safety, morals, and general welfare. This is established in the tenth amendment of the constitution.

Example: Government powers range from small to large. The most common example of a government power is zoning.

What is Real Estate Government Power?

There are many acronyms to remember government powers within real estate. I think the best word or acronym to use is PETE, which stands for:

P for Police Power

E for Eminent Domain

T for Taxation

E for Escheat

What is Police Power?

Police power is how the government regulates real estate. Examples of police power include zoning laws, building codes, fire codes, rent control, safety hazards, and tenant rights.

Unlike eminent domain, no compensation needs to be paid for the implementation of police power.

What is Eminent Domain?

Eminent domain is described as the right of the government to take over privately owned real estate usually despite the owners’ wishes. This often happens for land that is required for infrastructure like highways, major pipelines, railroads, etc. The fifth and fourteenth amendments of the U.S. Constitution permit the government to exercise its power of eminent domain.

Let’s say Ms. Jackson lives on property one acre next to a highway. The state wants to widen the road due to the higher amounts of traffic reported. The state needs the space on either side of the road to widen the road. The government then seizes Ms. Jackson’s property and gives her $100,000 for it. Sorry, Ms. Jackson. Ms. Jackson does not have the opportunity to say no, though she can challenge whether the $100,000 is fair market value.

What is Taxation?

We all know what taxes are. Real estate taxes vary on a lot. State to state, city to city it all changes. Real estate tax is a charge on real estate used to pay for services provided by the government. For example, some towns may tax property more because they have a better school system. Larger cities may tax more for numerous reasons like their infrastructure, police force, etc.

What is Escheat?

Escheat occurs when a property owner dies and leaves no proper documented inheritance plan, the property ownership then reverts to the government. Escheat ensures that property always has ownership. Escheat is part of the reason it’s critical to have a will or when you are purchasing property you establish a clear right to survivorship.

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Contingent

When you and your clients are searching the market for new homes, often you’ll run across properties in different states of activity. A contingent property simply means an offer for the property has been accepted by the seller. They are still labeled active listings because if requested provisions are not met the offer could fall through.

What is a Contingent Property in Real Estate?

Definition: A contingent property means an offer for the property has been accepted but there is a condition or “contingency” that is written into the contract and it must be met before the sale can go through. In order for the contract to be legally binding, the contingency must be met.

Example: A common example of a contingent property is when the buyers of a home include a clause on the contract that states it is not binding until a satisfactory home inspection from a home inspector is completed. Once the home inspection is completed, the contract is then legally binding, and the sale can proceed.

What is a Pending Property in Real Estate?

The term pending means that the offer has been accepted and both parties are moving forward with the sale. When a property is pending, it is in the period after the contingencies are resolved.

It’s normally not the best idea to make an offer on a property at this point as the odds of the sale completing are pretty high. Usually, a property that is listed as pending for awhile is under contract and is awaiting approval from the bank. There are some circumstances where a pending property deal will fall through, so it’s not a bad idea to keep an eye on the property.

What is an Active Property in Real Estate?

If you or your client sees a home listing with just “active” as their status, this indicates that the property is available for sale. This is the most basic and attractive status for buyers. This just means it’s up for sale, there are not any current offers with contingencies, and it is not in the pending process.

This is not to be confused with “Active Contingent” which is just another name for a contingent property.

Types of Real Estate Contingencies

There are many different types of contingencies in real estate. Some you’ll see more than others:

Inspection Contingency – If a home inspection reveals problems, the buyer can request repairs, compensation for the issue, or just cancel the offer completely.

Financial Contingency – A financing contingency provides a way for buyers to back out of the sale of the property if their loan falls through.

Appraisal Contingency – Most big lenders or banks require the buyer to have an appraisal done to the property before the loan is granted. This is to ensure the house is worth somewhat close to the price of the accepted offer.

Title Contingency – If the title for the property is under review the buyer can add a title contingency to the offer. During this process, a title report will be done which may reveal a conflicting ownership status, in which the buyer then can opt out of the sale.

Buyer’s Home Sale Contingency – This contingency allows the buyer to cancel the contract if they are unable to sell their current home in a specified amount of time. This is a tad bit risky for the seller because they have to wait for someone else’s house to be sold first in order to sell theirs. To combat the riskiness, typically this type of contingency allows the seller to continue to market the home to other potential buyers.

Should Buyers Make an Offer Contingent Property?

You or your clients may be eager to make an offer on the property if it is listed as contingent. The best time to make an offer on a home is when there are no contingencies… however, it is possible to make a successful offer while a property is labeled contingent.

Often the status will explicitly state if they are taking backup offers or not. If the case is they are, it’s not a bad idea to advise your client to make an offer. Although it can be quite risky, making an offer without contingencies is attractive to many sellers. It may pressure their current buyer also to drop their contingencies or leave the negotiations entirely.