Summary

Real property is land and everything attached or appurtenant to it. Real property rights include the bundle of rights

  • Disposition
  • Exclusion
  • Enjoyment
  • Possession
  • Control

Personal property is any property that is moveable and not intended to remain with the land. Personal property is also called chattel or personalty and can include intangible, aka incorporeal, things such as copyrights, patents, etc...

Appurtenances are rights that go with the land. These rights usually transfer with land but may be sold separately.

Natural attachments (plants) are real property in the ground, but personal property when picked. The doctrine of emblements lets a tenant farmer return and pick up the first crop after his tenancy ends. Man-made attachments are fixtures; major fixtures are improvements. Attachments go with the land; personal property does not. Fixtures are personal property attached to real property; they are legally part of real property due to annexation. Courts decide if an item is a fixture mostly by looking at the annexor's intent and purpose of annexation: written agreements take precedence. A bill of sale transfers title to personal property. Trade fixtures installed by the tenant for business purposes, may be removed before the lease ends, unless a written agreement states otherwise.

Physical characteristics that influence real estate markets include immobility (land cannot be moved), indestructibility (land cannot be destroyed), non-homogeneity (each property is unique), and situs (location).

Economic characteristics that influence real estate markets include scarcity (land cannot be created), improvements (changes in parcel), and fixity (fixed investment)

There are four government powers that affect land ownership:

  • Police power
  • Eminent domain (right of the government to take private land for public use)
  • Taxation
  • Escheat (land goes to the state if person dies without a will and without heirs)
Public restrictions under a government's police power generally take the form of:
  • Zoning ordinances
  • Building codes
  • Subdivision regulations
  • Environmental laws

Zoning ordinances separate land use in different categories. They can be residential, planned area development, commercial, industrial, or agricultural.

Each Zone category will have rules about the following:

  • Minimum lot size
  • Maximum building height
  • Setback requirements (min distance from other things)
  • Min front footage on a road or a street
Exceptions to zoning laws are nonconforming uses, variances, and conditional uses. Building codes set minimum standards for construction and materials.

Real property tax is ad valorem tax, based on the value of real property. Special assessment taxes are levied against specific properties to pay for infrastructure costs, such as sidewalks or street lights. Property taxes are raised locally by counties, municipalities, and school districts. Unpaid property taxes can result in a lien against the property, and if not paid, can result in a tax lien sale.

A property's assessed value is the value placed on land and the building by a city, town, or county assessor for use in levying annual real estate taxes. Arizona assessment ratios are:
  • Commercial: 18%
  • Raw Land: 15%
  • Residential: 10%
The assessed value is multiplied by the tax rate to determine the property taxes.

Property taxes are paid in arrears which means they are paid after the fact and split up into 2 payments per year.

First Half: January 1 to June 30 taxes are due October 1 and are late November 1
Second Half: July 1 to December 31 taxes are due March 1 and are late May 1

Remember "Oh No, More Money"
October, November, March, May.

Delinquent taxes are assessed a 16% interest penalty per annum until paid.

Tax lien sales are presented on February 1 and the winning bids are the bidders who bid the lowest percent of interest. The successful bidder takes over the state's lien position, receives a certificate of purchase, and pays the taxes due.

Vocabulary

Fixture- Item of personal property that has been attached to or closely associated with real property to become part of the real property.

Ad valorem- A concept for property taxes that means "according to value".

Escheat- The reversion of property to the state after a person dies without leaving a valid will or any heirs.

Special assessment- A tax levied only against properties that benefit from a public improvement.

Eminent domain- The right of government bodies to take private real estate for public use opon payment of just compensation to the owner.

Situs- The location of a parcel of real property.

Bill of Sale- An instrument in writing that transfers ownership of tangible personal property.

Trade fixture- An item of personal property that is annexed to leased property and is necessary to a business; removed at lease termination.

Police power- The right of the government to pass legislation protecting the safety, health, and welfare of the public.

Annexation- Attaching personal property to land so that the law views it as part of the real property.

Real property- The physical land itself to the center of the earth and the sky above, anything permanently affixed, and the associated rights.

Intestate- A person who dies without making a will, causing his or her estate to pass on by the laws of descent and distribution.

Assessed value- For property tax purposes, a percentage of the market value.

Emblements- Farm crops that require annual cultivation.

Quiz

Property rights that go with ownership of real property are referred to as Bundle of Rights

Surface of the earth, below to the center, and above, with all natural things is Land

Personal property is conveyed with a document called a Bill of sale

Naturally growing plants are considered ______ property Real

Emblements are considered ______ property Personal

An item which was once personal property but is now real property is a Fixture

Ownership of trade fixtures depend on when they are removed or the expiration of the lease

______ is not a factor in determining if an item is a fixture Cost

People's preference for a certain area is called Situs

The document used to transfer real property is a Deed

The process of taking private party property for public use with just compensation through the government's power of eminent domain Condemnation

Process when government action has caused significant loss of value or inability to use the property Inverse condemnation

A special taxing district that allows the financing of the installation, operation & maintenance of public improvements such as roads, water, sewer, schools, parks, police, fire facilities & flood control. Community facilities district (CFD). There are 5 CFDs in Scottsdale: DC Ranch, McDowell Mountain Ranch, Scottsdale Mountain, Via Linda Road, and Waterfront Commercial. Source

Property taxes are paid to the __________ County treasurer

Police power is without ________ Compensation

Process of verifying the validity of a will is called _________ Probate

Escheated property is sold at public auction by the sheriff. The proceeds of the sale go to ___________ General fund of the State of Arizona

Real estate property taxes are levied _______ Annually

Redemption period for a lien when it is sold due to unpaid property taxes is _______ 3 years

Chapters