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March 2018

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Understanding real estate agreements requires a basic knowledge of what rights or interest to property that are affected by a specific agreement or contract. The following is a basic listing of rights that are commonly dealt with and general descriptions. As it has been previously said in this book, the intent is to provide the reader with a practical knowledge of real estate agreements. The following listing does not represent a complete list of the various rights that can be held in and to real estate, nor does it give a thorough and full description of the rights covered, but it is sufficient for practical purposes.

A bundle of rights to real estate could include:
a)All the rights, fee simple
b)Mineral rights
c)Air rights
d)Water rights
e)Life estate
(f)Remainder interest
g)Equitable rights

1) Land contract
2) Leasehold
3) Option
4)Pending purchase contract

OWNERSHIP- Fee Simple Ownership. This is the highest form of ownership to property. Generally if you have real estate that you have received a warranty deed for, this is what you have.

EQUITABLE INTERESTS- These are rights that are acquired by agreement of the owner, without transferring ownership. In other words, if you have an equitable interest in real estate, you may have the right to acquire title and ownership, but you don't have it yet. Typical examples of equitable interests are the rights of the purchaser under a full accepted purchase agreement, the rights of an optionee under an option agreement and the rights of the purchaser (vendee) under a land contract.

LEASEHOLD INTEREST- These are the rights to property for a duration of time with no promise to transfer ownership. Rental/leasing applies here as well as use licensing.

OWNERSHIP INTERESTS- Ownership to property is a combination of things and rights, and you can own property and not have all parts of ownership and vice versa. These are the basic parts or types of the ownership of real estate: Legal, Equitable, Possession and Use

Legal interest is normally evidenced by having title to the property. Equitable interest is described above. Possession is simply having possession or control of the property. For example, a "squatter" is a person who has possession, but no other rights to the property. "Squatters," simply by virtue of being in possession of the property have certain rights. Use , is simply the right to use the property. A typical example of this is a letter of permission to hunt on land.