Quiz 1: Real Estate Investment: Basic Legal Concepts
When a person owns something legally, it is called the property of that person. The property is broadly divided into two categories as follows: 1. Real Property 2. Personal Property Real property refers to the ownership rights associated with realty which is referred to the land and the things which are permanently attached. These properties are not movable. For example, building, office, land, residence, real estate etc. Personal property refers to the ownership rights associated with personalty. Personalty includes all things, tangible, intangible, and things which are movable and not realty. For example, car, bike, television, wrist watch, clothes, computer, laptop etc.
Estate Definition of estate is similar to definition of Assets. Estate is defined as all the properties that an individual person owns. Estate represents the legal ownership on properties of the individual. Estate are those properties on which an individual has right to use it, sell it or leased it. According to English property law with tell the nature of right on property. In the transaction of estate the buyer and seller describe the nature of use of property and extent of the right of property. The term "Real estate" represents all the reality related property that an individual owns. Likewise there is another type of estate that is classified according the nature of right and nature of use. There are major two general categories that are classifying bases of nature if right and use is mention below: 1. Estate based on right 2. Estate based on possession
Leased Fee Estate Leased fee estate are those estate or property that are owned as a rent as lease for certain period of time. For a normal estate life of estate is infinite but for leased fee estate there is always a limited time of the life of estate. There are two parties for the lease contract. Lease is a contract between two parties first is lessor that is owner of an Estate and another party is lessee that is the user of the Estate. Under the lease contract the owner of the assets gives right to use the Estate for certain period of time for the consideration. There is two type of leasehold estate which is shown below: 1. Estate for year 2. Estate from year to year. Value of Estate under leased fee estate is determined in following ways. 1. Market Value of Estate 2. Time period for the Estate is use as lease 3. Nature of use of estate 4. Cost saving from the lease 5. Depreciation and expected life of Estate Based on above parameter leased fee estate have value that is transferred from lessor to lessee and from one lessee to another lessee.