Real Estate Terms

Bundle of Rights Definition

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 is 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 the 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 encourages 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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