RESN-Nevada-Prelicense-Chapter 1 (1).pptx

- You will have 10 minutes to get in to the class. Once the class
has been going on for 10 minutes you will have to wait for the
first break to enter.
- You will have 10 minutes to cancel your seat or there will be a
balance on your student account and you will be counted as no
call/ no show.
- If you miss more than 2 days of class the rest of your seats will
be canceled .
-At this time we cannot allow you to register for both morning and
evening classes held on the same day. If you do not contact the
school on this matter BOTH seats you reserve will be canceled out.
-The school has a dress code of business casual. If you are not in
dress code you will not be allowed to enter the class

CHAPTER 1
Real Property Characteristics,
Legal Descriptions, and Property Use

CLASSES OF PROPERTY
LAND
• Defined as:
• Surface of the earth
• Extending upward to infinity (airspace)
• And downward to the center of the earth (subsurface)
• Includes all things attached to the surface, like:
• Trees
• Shrubs
• And all things below the surface, like
• Water
• Minerals

CLASSES OF PROPERTY
REAL ESTATE
• Defined as the land, plus all
improvements:
• Which are man-made artificial
things
• Buildings, fences, driveways,
swimming pools, etc.
REAL PROPERTY
• Consists of:
• Land
• Man-made improvements
• And the bundle of rights of
ownership

CLASSES OF PROPERTY
WATER RIGHTS
• May accompany ownership of real estate
RIPARIAN RIGHTS
• Rights of owners along a river or stream
• On non-navigable bodies, owner typically owns the land under the water, out to
the center
• On larger, navigable bodies, owner owns only to the edge of the water
LITTORAL RIGHTS
• Owner's land borders large, commercially navigable lakes, seas, and oceans
• Owners have claim only to high water mark of water that borders their property

CLASSES OF PROPERTY
CHANGES IN BORDERS:
• Actions of nature change the property border
• Accretion
• Property becomes larger where water has added to the
land
• Increases in land due to accretion belong to the land owner
• Erosion
• Wind, rain, or flowing water has removed land and replaced
it with water
• Missing land no longer belongs to the landowner
• Avulsion
• Sudden removal of soil by an act of nature
• Property becomes much smaller very quickly

CLASSES OF PROPERTY
PERSONAL PROPERTY
• Property that is NOT real property
• “Movable”
• Potted plants to manufactured homes
TREES AND CROPS
• Trees, rocks, bushes, etc. that does not require cultivation
(annually) considered part of the land; real property
• Fruit, vegetables, nuts, grasses, grains, etc., annually cultivated
emblements or fructus industriales, and are personal property

CLASSES OF PROPERTY
FIXTURES
• Personal property permanently attached to land/building
• Become part of the real property
• Examples: lighting fixtures, alarm systems, heating systems,
elevators, kitchen cabinets, etc.
• Definition of a fixture can be controversial
• Courts have defined three legal tests:
• Method of Annexation
• Adaptation to the Real Estate
• Intention of the Parties
TRADE FIXTURES IN COMMERCIAL SPACES
• Installed by a commercial tenant, for tenant’s business
• Trade fixtures are personal property of the tenant, however if they are
not removed upon vacating property they become property of the
landlord through accession.

LAND CHARACTERISTICS
ECONOMIC CHARACTERISTICS OF LAND
• Area Preference: Location, Location, Location
• Scarcity: land is finite and scarce
• Improvements: construction of buildings may raise the value
• Permanence of investment: investments in land are usually long
term and relatively stable
PHYSICAL CHARACTERISTICS OF LAND
• Immobile
• Indestructible
• Unique (non-homogeneous)

LEGAL DESCRIPTIONS
3 TYPES
• Metes and Bounds
• Government Rectangular Survey
• Lot, Block and Subdivision
Being a portion of the Northwest Quarter (NW1/4), of Section 11,
T.20 S., R.60 E., M.D.M., City of Las Vegas, Clark County
Nevada. Described as follows:
BEGINNING AT THE Northwest Corner (NW Cor.) of said
Northwest Quarter (NW1/4); thence S.84 00’15” E. along the north
line thereof, 2319.76 feet; thence S.0 29’33” W., 1276.95 feet;
thence N.89 30’27” W., 60.00 feet; thence S.0 29’33” W.. 1411.48
feet to a point on the south line of said Northwest Quarter
(NW1/4); thence N.84 06’49’ W., along said south line 2234.71 feet
to a point on the west line of said Northwest Quarter (NW1/4);
thence N.O 01’19” W. along said west line 2700.95 feet to the
POINT OF BEGINNING said parcel contains 140.23 acres more or
less.
METES AND BOUNDS
• Least common method
• Property described by starting
and ending at point of beginning (POB)
• May involve natural objects,
monuments
• Starts and closes with POB; essential

LEGAL DESCRIPTIONS
(640 acres)
S ½ of SW ¼
of SW ¼
< 1 mile
>
<
1
mile
>
1 mile
1
mile

LEGAL DESCRIPTIONS
U.S. Government Rectangular Survey System
• Based on Principal Meridians and Base Lines (37 in U.S.)
• Forms imaginary lines vertically parallel to the Principal
Meridians called Range Lines, and
• Lines horizontally parallel to the Base Line called Township
Lines
• Each strip of land is 6 miles apart, called Ranges or Tiers
• Townships formed by intersection of Ranges and Tiers

LEGAL DESCRIPTIONS
U.S. GOVERNMENT RECTANGULAR SURVEY SYSTEM
• Based on Principal Meridians and Base Lines (37 in U.S.)
• Forms imaginary lines vertically parallel to the Principal Meridians called
Range Lines, and
• Lines horizontally parallel to the Base Line called Township Lines
• Each strip of land is 6 miles apart, called Ranges or Tiers
• Townships formed by intersection of Ranges and Tiers

LEGAL DESCRIPTIONS
S ½ of the SW ¼ of the SW ¼ of Section 15
2 ÷ 4 ÷ 4 ÷ 640 acres
640 ÷ 4 ÷ 4 ÷ 2 = 20 acres
N ½ of SW ¼ of
SW ¼
S ½ of SW ¼ of
SW ¼
EXAMPLE: How many acres are in the
S ½ of the SW ¼ of the SW ¼ of Section 15
Start with the 640 acres
Then work the description
backwards and divide by the
denominator of the fractions.
SOLUTION:

LEGAL DESCRIPTIONS
LOT, BLOCK, AND SUBDIVISION
• Makes reference to an approved and recorded
plat map for the subdivision
• Most common method
Example: “GREEN MEADOWS UNIT 9
PLAT BOOK 91 PAGE 61 LOT 254 BLOCK 6”

LEGAL DESCRIPTIONS
VAGUE REFERENCES TO PROPERT ARE NOT LEGAL DESCRIPTIONS
• Property street address
• Tax assessor’s parcel number (APN)
• These vague references are acceptable on documents that are
not going to be recorded (Contracts, Leases, etc.)

LEGAL DESCRIPTIONS
• While land is considered private - government, and sometimes
private individuals have control
• Police Power
• Government’s right to regulate for benefit of citizens
• Zoning regulations
• Subdivision regulations
• Building codes
• Health and safety regulations

EMINENT DOMAIN
•Government has the power to take our property, provided:
•Passes test public use
•Payment of just compensation is met
CONDEMNATION
•Process of taking the property
•Payment is:
Condemnation award
EMINENT DOMAIN

TAXATION
•Revenue raised by the federal, state, or local governments
•By taxing:
•Income
•Value of property owned
•Business transactions
•Transfer Tax
•Recording Fees
•Property Taxes
•Special Assessments
TAXATION

TRANSFER TAX
•Conveyance taxes
•Revenue stamps
•Documentary stamps
•Or deed stamps
•State tax based on the value of real property when it is sold
•Normally paid by the seller
TAXATION

TRANSFER TAX
EXAMPLE: If the transfer tax rate in the state is $2.55 per $500.00 of value (or any portion
thereof), the sale of a $300,000 home would result in a transfer tax of:
SOLUTION: $300,000 ÷ 500 = 600 “taxable units”
600 x $2.55 = $1,530.00 (annual tax)
NOTE: If the value of the home were $300,200 … the calculation would be: $300,200 ÷ 500
= 600.4
(the rule to remember here is whenever there is a decimal round UP!) so the “taxable units”
rounds up to:
601 x $2.55 = $1,532.55 (annual tax)
TAXATION

RECORDING FEES
•State charge for recording documents in public records
EXAMPLE: the county recorder might charge $14.00 for the first page of a document and
$1.00 for each additional page, so a 24 page document would cost what to record?
SOLUTION:
$14.00 for the 1st page
$ 1.00 x remaining 23 pages = $23
$14.00 + $23.00 = $37.00
TAXATION

PROPERTY TAX
•Based on assessed value (land + improvements)
•County assessor determines value; and informs owner
•State establishes an assessment ratio; artificial lowering of the market value, yielding the
assessed value
•Tax rate is applied against the assessed value
TAXATION

$MV x AR% = $AV
$AV x TR% = $Annual Tax
EXAMPLE: The market value of the property is $360,000. The state assessment ratio is 35%
and the tax rate in the taxing district for the home is $2.9299 per $100 of assessed value. What
are the annual taxes?
SOLUTION:
$360,000 market value x .35 assessment ratio = $126,000 assessed value
$126,000 assessed value ÷ 100 = 1,260 “taxable units”
1,260 taxable units x $2.9299 tax rate = $3,691.67 annual tax
TAXATION

SPECIAL ASSESSMENTS (SOMETIMES CALLED SIDs OR
LIDs)
•Levied against property for special improvements, such as:
•Sidewalks
•Street lights
•Paving
•Landscaping of public areas
•Charged against the properties in the taxing district which directly benefit
TAXATION

ESCHEAT
•All land needs to be owned by someone or some government entity
•If an individual dies owning real personal property, but:
•Had left no will directing its disposal (transfer of title) and
•Had no heirs living at the time of their death
•Then no taxes are being paid
•The solution is the concept of escheat -- where title
to the property will pass to the state.
ESCHEAT

MASTER PLAN
•Local governments develop a master plan for the community
•Taking into consideration the:
•Needs of the community
•Various uses of land
•Potential for conflict between uses
•Orderly growth of the community
•Implementation of the master plan is accomplished by
the zoning process
ZONING

NON-CONFORMING USE (NCU)
•Property put to a use with no zoning ordinances to permit the use
•Time passes; but now the use would not be permitted
•Because the use was there first, it is grandfathered in
ZONING

VARIANCE
•A request for different use; violates the zoning regulations
•It is not a change in zoning; it is a waiver
EXAMPLE: A family wants to add a room to their home,
which would make the structure closer to the rear property
line than the current 15 foot setback allows. They would
need a variance to go forward with their plans for the
addition.
ZONING
Setback: Homes usually have a setback from the property
boundary that sets a minimum distance a structure must “sit back”
from road or water; like fences, sheds, etc.

CONDITIONAL USE PERMIT (CUP)
•Zoning cannot account for every potential use
•If the intended use does not have a specific zone to be put like a hospital,
school, church, etc.
•After a public hearing, if the use does not conflict with surrounding area
and the site would provide greater benefit than harm, then CUP could be
granted.
•Different from variance in that it changes the zoning
ZONING

SPOT ZONING
•This is the zoning authority's decision to rezone a small area different from
surrounding parcels
EXAMPLE: Mom’s Beauty Shoppe wants to operate a home-based business in a
residential zone. She will need to get the zoning boards permission to do so.
ZONING

BUFFER ZONES
•Required separations between conflicting uses
EXAMPLE: A park separates a housing development from a commercial shopping
center
UP ZONING OR DOWN ZONING
•If additional uses are added: up zone and may add value
•If uses are taken away: represents a down zone and may lose value
ZONING

ENCUMBRANCES
• Can be in the form of financial liens (monetary) while others
can restrict use (deed restrictions, easements,
encroachments, etc.)
• ALL encumbrances create a burden on title to the property
• While benefits may be derived, they may obstruct the use or
value
MONETARY ENCUMBRANCES
• are financial liens against the title to the property. There are
2 ways to classify monetary encumbrances:
SPECIFIC LIENS:
• Deeds of trust/mortgages
• Property tax liens
• Mechanic’s liens
• HOA liens
• Special assessments
Non-monetary/Use Encumbrances restrict
how you can use the property and are said
to run with the land (meaning the use
restriction passes to the new owner when
title is transferred:
•Deed Restrictions
•Conditions, Covenants & Restrictions
(CC&Rs)
•Home Owner Association (HOA) Regulations
•Easements
•Licenses
•Encroachments
GENERAL LIENS:
Bankruptcy Judgements
Judgements
PRIVATE CONTROL

DEED RESTRICTIONS
•“Grantor” places restrictions on future use
•Would be put in the deed
•“Runs with the land”
EXAMPLE: no sale/manufacture of alcoholic beverages
CONDITIONS, COVENANTS AND RESTRICTIONS (CC&R’S)
•Usually managed by a homeowners’ association (HOA/CIC)
•Also called HOA Regulations
•Often very restrictive; may be offensive to some buyers
EXAMPLE: garbage cannot go to curb before 7:00 p.m.
USE ENCUMBRANCES

EASEMENTS
•Right to use, or pass over, for specific purpose
EASEMENTS BY NECESSITY
•All owners have a right of ingress (entrance) or egress (exit)
•Judge may force an easement by necessity
•Involves court action to find least intrusive access
USE ENCUMBRANCES

EASEMENTS APPURTENANT
•Allows one to cross over the land of another
•Land over which right to cross is servient tenement
•Land which enjoys the right to pass is dominant
tenement
•Easement “runs with the land”
USE ENCUMBRANCES

EASEMENT IN GROSS
•Simply, a right of passage
•No dominant tenement, only a servient tenement
•Most common examples are utility easements
EASEMENT BY PRESCRIPTION
•Seldom seen in modern times
•One party’s conspicuous use of another’s property
•A “prescribed”, long period of time
•Without permission
•Would have to be “continuous” and “hostile”
•Court order granting an easement by prescription
•Owner must exert rights of ownership, risk losing
them
USE ENCUMBRANCES

EASEMENT ARE CREATED BY:
•Granting or reserving in a deed
•Court order
•Prescription
EASEMENTS ARE TERMINATED BY:
•Abandonment
•Release by the easement holder (quit claim deed)
•Court order
•Merger
USE ENCUMBRANCES

LICENSE
•Giving permission to come on the land for specific
purpose
•Privilege; revocable
ENCROACHMENTS
•A thing (not a person) extends over the property
line without owner’s permission
•Can be buildings or portions thereof; driveways,
fences, walls, trees, shrubs, etc.
USE ENCUMBRANCES
METHODS TO REMEDY
ENCROACHMENTS
•Negotiations and agreements of the parties
•Removal (either by agreement or by court order)
•Suit for damages by the property owner being
encroached
•Utilization
•Suit for easement by prescription

RESN-Nevada-Prelicense-Chapter 1 (1).pptx

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RESN-Nevada-Prelicense-Chapter 1 (1).pptx