Real Estate, Real Property and Leased Land; Definitions, Discussion and Explanations

Delaware, and the rest of the original British Colonies, has some land that is leased rather than owned by the residents of that land. Much of it is not evident to the casual observer.The land on Lewes Beach is leased, not owned by the home owners. The land of Lewes Beach is owned by the Town of Lewes. The lands of Rehoboth by the Sea and Dewey Beach include leased land too. Most of the leases on that land will NOT be renewed but will return to the owners and the homes on top of that land will be removed by the home owners at their expense. Much of the land in Riverdale, on Indian River Bay, adjacent to Oak Orchard is leased as well. In Riverdale the leased land is owned by Chief Clark of the Nanticoke Indians.We have about half the inhabitants of Sussex County living on leased land; most of that leased land is found in what people call mobile home parks or communities. However, in those communities there are seldom any homes that are truly mobile and there are even two story stick built homes on some of the leased lands in those communities. Condominiums and town houses are sometimes found on leased land as well. Some folks find all this rather difficult to understand.We Realtors and Attorneys use the term fee simple to describe land that is being sold as real property; that is real estate. We used the term leased land or leasehold interest to describe land that is not transferring as real estate.This rather lengthy text is regarding Leased Land, Real Estate, Private Property, Chattels, Mobile Homes, Homes on Leased Land and a legal dissertation to define, describe and determine the differences.Terminology is important when discussing Real Estate, i.e. real property.Black’s Law Dictionary is the recognized, definitive source for legal definitions under our American Law; which is derived from English LawPROPERTY: In the strict legal sense, an aggregate of rights which are guaranteed and protected by government. BL6, p. 1216.PERSONALTY: Personal property; movable property; chattels; property that is not attached to real estate. BL6, p. 1144PROPERTY: (personal property) – In broad and general sense, everything that is the subject of ownership, not coming under the denomination of real estate. A right or interest less than a freehold in realty, or any right or interest which one has in things movable. BL6, p. 1217Therefore personal property, is that which can be easily removed from the real estate, and is not real estate. Personal property includes crops, trees, shrubs, trailers, sheds, cars, mobile homes, manufactured homes that have a Department of Motor Vehicle title instead of a deed, and the contents of a home or building. In a home or business the personal property includes drapes, lighting fixtures, rugs (not installed carpeting) free-standing cabinets and cupboards, furniture, and all the contents of closets, drawers and buildings. Buildings without a foundation, that is sheds that are just supported by blocks are chattel property, that is personal property, and not part of the real estate. Such chattel includes dog houses and particularly the little storage buildings that are so common outside of homes today.LANDS: In the most general sense, comprehends any ground, soil or earth whatsoever… Black’s Law dictionary 6th Ed. (BL6), p.877PRIVATE PROPERTY: As protected from being taken for public uses, is such property as belongs absolutely to an individual, and of which he has the exclusive right of disposition. Property of a specific, fixed and tangible nature, capable of being in possession and transmitted to another, such as houses, lands, and chattels. BL6, p. 1217. Private property is land, houses, and chattels. Private property is protected from being taken for public uses. Private property is owned absolutely.REAL ESTATE synonymous with real property” and p.1218 REAL PROPERTY … A general term for lands, tenements, hereditaments (those things which are hereditary); which on the death of the owner intestate, passes to his heir.” BL6, p1263ESTATE: The degree, quantity, nature and extent of interest which a person has in REAL and PERSONAL property. An ESTATE in lands, tenements, and hereditaments signifies such interest as the tenant has therein. BL6, p.547 The definitions here all refer to: real estate = real property = estate = lands, tenements, and hereditaments. At first, one might think that ‘real property’ is the proper term for ‘all lands’. But it doesn’t state the manner of ownership as clearly as the definition of estate. We just had a huge instance of this when the thousands of leased land lots under the homes of several thousand people, in Angola, Pots Nets, and Long Neck areas owned by the Robert Tunnel family was inherited by the children.IN OUR AREA THERE ARE NUMEROUS LEASED LAND PROPERTIES AND THOSE PROPERTIES ARE THE REAL ESTATE OF THE OWNER OF THE LAND – NOT THE OWNER OF THE HOME WHICH IS UPON THAT LAND. If you examine the definition for ESTATE it refers to an interest in the same articles defined in real property and real estate.What is this LAND and WHO owns it and HOW is it owned? Land can be private property OR estate, i.e. real estate. Estate is an interest in “real property” by a person or a tenant. Private property is owned absolutely by an individual.INTEREST: More particularly it means a right to have the advantage of accruing from anything; any right in the nature of property, but less than title. – BL6, p.812. By this definition it’s clear that INTEREST cannot be TITLE, since it is less than title. Interest may be a property right to land, but it’s not a right to absolute ownership of land. Those who live on leased land, thus, have only an interest in the land; and that interest is a lease-hold interest. Is there a definition of property that says it’s land held in absolute ownership, as does private property’s definition? We can delve into this more.ABSOLUTE TITLE – As applied to title to land, an exclusive title, or at least a title which excludes all others not compatible with it. An absolute title to land cannot exist at the same time in different persons or in different governments. BL6, p.1485PRIVATE PROPERTY – … is such property as belongs absolutely to an individual, and of which he has the exclusive right of disposition. BL6, p.1217OWN – To have a good legal title; to hold as property; to have a legal or rightful title to; to have; to possess. BL6, p. 1105. To “own” is to have title. An interest is LESS THAN TITLE.ESTATE: The degree, quantity, nature and extent of interest which a person has in real and personal property. An estate in lands, tenements, and hereditaments signifies such interest as the tenant has therein. – - BL6, p.547 From these definitions, it’s plain that we can’t absolutely “own” real estate. We can only have a qualified ownership of qualified and described ownership of Real Estate. Thus, we need that Deed Description to describe it and qualify it. That ownership is also qualified by various government rights, decrees and laws, from antiquity, such as rights against trespass. That ownership is qualified by taxation, zoning, rights of way, and a myriad of other entailments. We need, therefore, a title search to determine those entailments, some of which are invisible.Therefore there is NOT as much difference in the rights and privileges of ownership and interest as one is led to believe. I have no problem with those who live on leased land instead of owning the land. Usually they are paying far less than it would cost them to own the same property. However, they don’t often get any appreciation of the land; the landlord gets the appreciation in real value, while the resident can appreciate the lifestyle for less cost per month or year.However, since an interest in leased land is not automatically transferable and is NOT Real Estate and since the chattel property upon it, the mobile home is personal property, without a deed but instead has a title – Realtors are not by law supposed to be involved in the sale of such – but we are. We are supposed to only be selling real property. It gets all cloudy and foggy doesn’t it. That is why there are people and companies who sell mobile homes on leased land who are not realtors and don’t need to be. In fact, although no one will discuss it, Realtors are not supposed to sell mobile homes on leased land. We don’t need to engage in that battle any more than I just did by describing it.OWNERSHIP: The complete dominion, title, or proprietary, including right in a thing or claim… Ownership of property is either absolute or qualified. The ownership of property is absolute when a single person has dominion over it, and may use it or dispose of it according to his pleasure, subject only to general laws. The ownership is qualified when it is shared with one or more persons, when the time of enjoyment is deferred or limited, or when the use is restricted. – BL6, p. 1106 Such sharing is common with husband and wife, partners, families and corporations, etc.DOMINION – Generally accepted definition of “dominion” is perfect control in right of ownership. The word implies both title and possession and appears to require a complete retention of control over disposition. – - -BL6, p. 486 I think you’d agree that zoning, building codes, home owners association covenants, condominium documents of use and business licensing is a restriction on the use of land (if it’s Real Estate). And there is obviously the fact that failure to pay property taxes on real estate will result in loss of said property. That’s definitely not absolute ownership. But private property is defined as ABSOLUTE OWNERSHIP, not qualified (interest).PROPERTY (tangible) – All property that is touchable and has real existence (physical) whether it is real or personal. – - BL6, p. 1218 In summation, it takes a good attorney, and one well versed and experienced in real estate to understand the complex definitions, rights, liabilities, and privileges of real estate ownership. I have been buying and selling real estate for myself and assisting others in the buying and selling of real estate for thirty years. I have taught courses on real estate and real estate law. And, I would NOT consider purchasing a property, or purchasing property on leased land without the professional and paid assistance of an attorney who is a real estate specialist in the exact county in which the property is located. Other attorneys from other areas are not valid choices at all.Copyright © 2001 – 2005 by www.JodyHudson.com>

Why Invest in Real Estate?

It’s a competitive world out there. There are many investment options. So why should you invest in real estate? Well, real estate has some unique qualities that have made it one of the top investment strategies in the U.S. for hundreds of years. Its benefits include:You can get paid two times – instead of once like most other investments.In real estate, you get money from both the operation of the property (also known as a “dividend”) and a second time when you sell it, and it’s value has increased due to increasing rents (known as “capital appreciation”). This is in contrast to most other investments such as precious metals and non-dividend paying stocks, in which you only get paid once based on appreciation of the value of the asset. For example, if you buy an ounce of gold, you don’t get a penny in dividends. The only thing you get is the difference between what you bought the gold for and what you sell it for. The same is true for most stocks. Clearly, the best of all worlds is to get consistent income while you own it, and then a large distribution when you sell it.It pays a higher dividend than any other form of investment.Most real estate investments pay out a dividend of roughly 10%. The average stock that pays a dividend – and most don’t – is lucky to be 1%. The same is true with CDs and bonds – you are looking at around 3% to 5%. There are no other forms of investing that can pay out a dividend as high as real estate. Of course, there are such items as “junk bonds” that might pay out 10%, but they might just as likely lose your entire investment if they default. That’s why they call them “junk”. Remember the saying “before you can have return on investment, there must be return of investment”.It comes with attractive leverage.Most real estate investments include the potential for leverage in the form of a mortgage. This allows the investor to create an even higher return, without taking excessive risk. If you buy a property and put down 20%, and borrow the remaining 80%, you will increase the yield on your investment hugely, assuming that the yield of the entire property is higher than the interest rate of the mortgage. This ability to utilize intelligent leverage has long been an attraction. It allows you to pay off the property using the property’s own cash flow. Can you do this with a CD? No. Bond? No. Gold? No. Sure, you can buy stock on margin, but that is really a form of speculation more than investing, and often has dire consequences.It is time-proven and has an impressive track record.Investing in real estate has an impressive pedigree. The first American millionaire – John Jacob Astor – made his fortune in Manhattan real estate. Since then, many of the richest individuals in the U.S. have created their wealth in real estate. These include Donald Trump, Conrad Hilton, Joseph Kennedy, and literally hundreds of thousands more. It has been asserted that more wealth has been created through real estate investing than all other forms of investing combined.Security.When you invest in a stock or bond, you really don’t have any control over where your money goes or how that company is managed. Unlike Warren Buffet, who normally buys full control of the entity through buying a majority of the stock, the regular investor has no power over the day-to-day operations of the business they own stock or bonds in. Additionally, their stock or bonds are normally not secured by anything tangible. In most cases, all you have as security on your investment is a piece of paper and the hope that there will be a market of buyers for that piece of paper in the future. With real estate, you get a deed to a property – the title to the asset is put in your name. You control what happens. You are the boss. Your investment – your capital – is backed by the title to real estate.ConclusionThere are many great reasons to invest in real estate. Not only does real estate offer the highest financial returns, it also offers security and has a proven track record of performance. It also offers attractive leverage to allow you to stretch your investment dollars farther and obtain an even higher real rate of return.”I made a tremendous amount of money on real estate. I’ll take real estate rather than go to Wall Street and get 2.8%. Forget about it.” – Ivana Trump