Business

DFI 522 Real Estate Finance and Investments

Overview

Objective

The objective of this topic is to introduce students : • to the subject of real estates; • the definitions and basis legal concepts on real estates; • to mortgages and notes

Basic concepts

Real estate is the term used to mean land and all things attached to it permanently Personal property refers to all intangibles and all movable things eg cars, stocks, patents etc Real property is the ownership rights associated with the real estate

Property rights is defined as the right to possession, use, enjoyment, and disposal of property

Basic legal concepts Interest in property: Is the interest created by owners of real estate who pledge and encumber property in order to achieve an objective. Eg pledging real estates and easements

Basic legal concepts

The term ESTATE means “ all that a person owns” The term estate in real property is used to describe the extent to which rights and interests in real estates are owned.

Basic legal concepts

Classifications of Estate 1) Based on rights: a) Estates in Possession: Is one that entitles its owner to immediate enjoyment of the rights of the estate. b) Estates not in possession: Does not convey the rights of the estate until sometime in the future. Examples include Reversions and Remainders

Basic legal concepts

Classifications of Estate 2) Based on Possession and use: a) Freehold Estates: They last for an indefinite period of time. Connotes ownership. Examples include Fee simple estate and Life Estate b) Leasehold Estate: Expires on a definite date. Implies only right to possess and use. Examples include Estate for years and Estate from year to year

Notes and Mortgages

Notes and Mortgages are the two legal instruments used frequently in real estate financing.

Promissory note is a document that which serves as evidence that debt exists between a borrower and a lender and contains the terms under which the loan must be repaid and...