What is Real Estate?
Real estate is the land along with any permanent improvements attached to the land, whether natural or man-made- including trees, water, minerals, Buildings, homes, fences and bridges.
Real estate is a form of what is known as REAL PROPERTY and differs from personal property which are not attached to the ground such as vehicles, boats, furniture and farm equipment.
Distinctions Between Land, Real Estate and Real Property.
*Land – This refers to the earth’s surface down to the center of the earth and upward to the airspace above, including the trees, minerals and water.
*Real Estate – This is the land, plus any permanent man-made additions such as houses and other Buildings.
*Real Property – This is defined as the interests, benefits, and rights inherent in the ownership of real estate.
Real Property is everything included in real estate, plus the rights of ownership, including the right to possess, sell, lease, and enjoy the land.
Physical Characteristics of Real Estate
- Immobility – The geographic location of any parcel of land can never be changed.
- Indestructibility – Land is durable and indestructible (permanent).
- Uniqueness – No two parcels off land can be exactly the same. They may share similarities but every parcel differs geographically.
Types of Real Estate
- Residential real estate – For residential purposes .
- Commercial Real Estate – Business purposes
- Industrial Real Estate – Manufacturing, production , distribution, storage, research and development.
- Land – undeveloped Property, vacant land and agricultural land( farms, ranches, orchard and Timberland)
- Special purpose – Property used by public such as cemeteries, government buildings, libraries, parks, place of worship and school s.
- Apartments Buildings*
An apartment is a housing unit with all the living spaces inside the unit. In apartment buildings, all the units are in one building all owned by one entity. This is the key difference between a Condo and an apartment.
With a Condo individual entities( persons or corporation ( own the units, whereas with apartments, all the units in the building are owned by one entity.
A maisonette is a unit where the balcony acts both as an entrance/exit of the unit as well as a spot for relaxation and viewing the environment. The major difference between a maisonette and a flat is this single feature. With flats or apartments, the balcony has no entrance/exit feature.
A bungalow is a small, square , single-storey home with front porch. .It has different variations:
A duplex is two units of flats or apartments connected by an internal staircase. There are varieties of duplexes:
Fully detached – This is a stand alone duplex
Semi-detached – two duplexes sharing a common wall with one having a mirror image of the other. These duplexes are like identical twins. They just two units.
Terrace Duplex- These are duplexes in a row sharing common walls like the semi-detached duplex.
Estate in Real Property
The amount and kind of interest a person has in real property is called an ” Estate in land”.
There are two major classifications: Freehold estates and Non-freehold estates.
They have indefinite duration and can last for a lifetime or forever. It involves ownership. Examples are:
- Fee Simple* – the holder is entitled to all rights in the property. It is the highest type of interest in real estate recognized by law. The estate is of unlimited duration, and when the owner dies, the estate passes to the owner’s heirs.
This is the type of titles we have in Epe. But the moment they sell, it is no longer a freehold. With freehold lands, getting your C of O is faster.
- Life estate* – A life estate is limited in duration to the life of the owner, or to the live or lives of some other designated person(s). Unlike a fee simple estate, a life estate is not considered an estate of inheritance.
These estates involve leases. They are not inheritable and exist ” without ownership” . It is also known as leasehold. They are created through written and oral leases and rental agreements. Examples are:
Tenancy for years – A tenancy created by lease with a definite beginning and end. The lease terminates automatically at the specified end. Also called estate for years…C of O.
Tenancy from period to period – a tenancy for a definite initial time but is automatically renewable for an indefinite period unless the owner or tenant terminates it with prior notice. Also called Estate from year to year . Example monthly or yearly rent paid for use of real property.
- Tenancy at will*: This tenancy can be terminated at any by either the owner or tenant. Also called estate at will.
- Tenancy at sufferance* – this is the lowest form known by law. It exists indirectly as a result of circumstance and is never created deliberately. It happens when a person who had a legal right to use the property remains on the property without the a legal right to do so-and without the owner’s consent. The only difference between a tenant at sufferance and a trespasser is that the former had the right to be on the property at some point, but stayed beyond the terms of the lease or agreement. Also called Estate at sufferance.
Kome Ibagere, The Real Estate Explorer