Real Estate Ownership and Property Rights

Owning real property can bring a sense of pride and accomplishment. In addition to claiming the real estate as your own property, you gain additional rights. These rights enable you to use and enjoy your property. By understanding your rights, you can better exercise and protect them.

What Are Property Rights?

Property ownership rights allow individuals to own, possess, and use real estate. Owners can buy, sell, and transfer their property as they wish. As long as they do not violate the law, owners can use the property as they wish.

What Bundle of Rights Comes with Property Ownership?

Private property owners enjoy a bundle of rights when they become the title holders of real estate:

• Possession. The right to own the property.
• Control. The right to use the property as you wish within the confines of the law.
• Exclusion. The right to decide who can and cannot enter your property.
• Enjoyment. The right to use and enjoy the property as you wish.
• Disposition. The right to transfer, bestow, or sell the property as you wish.

Jeffrey S. Marks, a top-rated real estate attorney at Busse & Busse in Arlington Heights, Illinois, explains how property owners can protect their rights when involved in real estate transactions. “The as-is term is a crucial term that people need to pay attention to, at least when it comes to doing residential transactions. If you go ahead and ask for something when it’s an as-is clause, the contract automatically terminates. The seller is free to cancel, and then they can accept another offer.”

Where Are My Property Rights Listed?

Property rights are outlined and listed in multiple places. All of these recordings work together to give real estate owners rights. The U.S. Constitution’s Fifth Amendment bestows the freedom to buy, sell, and utilize property. This right has been further expanded and defined by common law, where judges make rulings on court cases. Property owners’ rights are memorialized on the deed that transfers ownership. A title records that the rightful owner of a property can claim the given rights. Property rights can also be afforded to another party by the property owner. This is typically done through a lease contract.

Is There a Difference Between Ownership and Possession Rights?

Property ownership and possession rights are separate rights that can sometimes overlap. Having an ownership interest in real property is an absolutely legal and legitimate claim to the real estate. The owner has the highest interest in the property and is able to afford the bundle of rights. Possession of real estate is the physical control and occupation of the property.

An individual or entity can have ownership and possession or just one of these. For example, someone can have ownership of real property, but their rental tenant can have physical possession. Alternatively, an individual can have ownership and possession of their property. However, they worked with a lender to secure a mortgage. The lender has an ownership interest in the property but not physical possession. The lender must initiate a foreclosure to take possession of the real estate.

Do Co-Owners Have the Same Rights in the Property?

Yes, co-owners of real estate can have equal property rights. Community property laws allow spouses to co-own their home together. A joint tenancy agreement would allow the couple to buy the property at the same time and own equal shares.

However, co-ownership can create practical issues, as it can be difficult for multiple property owners to utilize the property at the same time. One option is a tenancy in common. This allows the parties to have different ownership interests and gain their interests at different times.

These are examples of legal solutions for owning property with someone else. Speaking with a lawyer can give you full insight into your legal options. A better legal solution for creating ownership rights among multiple people may exist.

Are There Limits to My Ownership Rights?

While property rights are broad in what they encompass, there are limits. Property owners must follow the law and cannot do anything illegal. They cannot do anything that would hinder someone else’s ability to enjoy and use their property. Other legal tools can create limits on property ownership and use.

Zoning and Land Use Regulations

State, county, municipality, and city zoning ordinances and land use laws can restrict a property owner’s ability to use their property. These local laws often control how private property is developed. They also outline how a property is developed. Generally, these codes ensure safety and functionality.

Liens

A lien is an ownership interest placed on a property by another party. Typically, the property owner owes the other party money, and a lien is placed on the property to secure that debt. If the property owner does not repay the debt, they can recoup the money when the property sells. Examples of liens include a mortgage or mechanics lien.

Restrictive Covenants

A residential property that is in a homeowners association (HOA) governed community has restrictions placed on its property rights. The property owner must adhere to the covenants of the HOA. Violating the HOA rules can result in penalties. These rules can govern a broad range of homeowner aspects, from the house’s color to the type of vehicles that can be parked in the driveway.

Easements

An easement restricts property ownership rights by giving them to another. Easements give other parties the right to use a portion of the property. Examples would be a shared driveway or footpath that cuts across the property.

Easements are created with the permission of the property owner. An encumbrance is an encroachment on the property that the owners disagreed with. It can be unintentional or intentional. Examples include a neighbor’s fence or outbuilding crossing the property line into the neighboring property.

Encroachments

Sometimes, a neighbor encroaches on the property bordering theirs without the consent of the neighboring property owner. Examples would be landscaping, a fence, or a driveway that goes over the property line. Sometimes, this is intentional, and sometimes, it is unintentional. Once discovered, the encroaching neighbor will need to correct the issue or compensate the neighbor.

Eminent Domain

While property owners are free to do with their land as they wish within the confines of the law, the government retains some right to it. The federal, state, or local government can take ownership of private property for public use. The current owner is not required to consent to the government’s taking of the land.

However, eminent domain requires the government to provide just compensation for real estate.

Leasehold and Rental Agreements

A property owner can give some or all of their rights to another individual or entity. This is typically done through a leasehold or rental agreement. These legally enforceable contracts enable the tenant to have physical possession of a property. The tenant steps into the owner’s shoes by having the right to live on and enjoy the property. During this time, the owner gives up their right to live on and use the property.

There are also use agreements that allow someone to use the property. Mineral rights are an example of this. The property owner grants another party the ability to mine the property for a particular mineral. Another would be water rights for coastal property. These rights give the property owner the right to use the water adjacent to their property. These rights typically extend out a specific distance.

What Is Adverse Possession and How Does It Impact My Property Rights?

Someone entering property they do not own and who does not have permission from the property owner is trespassing. A trespasser can gain title to property by meeting certain requirements. Each state has its adverse possession laws. Generally, the trespasser would need to live continuously and openly on the land for a specific number of years. They would need to do everything the real owner should do, such as using the property and paying property taxes. The trespasser can advocate for themselves in court and take the title from the owner.

Inheritance of Property Rights

Ownership rights can be transferred from one person to another through inheritance. State’s have estate planning laws that define how property transfer ownership. If an individual does not have a will, ownership follows intestate laws. If they have a will that describes what they want done with their property, the property transfers according to your wishes. There are also legal tools that allow you to transfer ownership outside of probate court.

Marks discusses the importance of recording your ownership of inherited property. “So in Illinois, for example, you have a requirement that when somebody owns the property, and they pass away, the property ownership has to go to probate and have the probate courts adjudicate. Even if you have a will.  It doesn’t automatically transfer; it has to go to probate”

Spouses that have joint tenancy have a right of survivorship. With the submission of a death certificate, the spouse can take full ownership. Another common legal tool is a life estate. This gives two parties legal ownership of the property. The first party retains use rights for the length of their life. The second party retains inheritance rights, taking ownership when the first party dies.

Find an Experienced Real Estate Lawyer

As a property owner, you must protect your rights to ensure you have full use and enjoyment of your real estate. Before you agree to restrictions on your ownership rights, consider consulting with a real estate attorney. It can also be helpful to consult an attorney if someone tries to take your legal rights away without your consent.

Visit the Super Lawyers directory to begin your search for an experienced real estate attorney. For more information, read our guide on what a real estate attorney does.