Importance of Knowing Real Estate Terms
I began teaching another NC Pre-licensing Course yesterday and I emphasized to the students the importance knowing the vocabulary or the terms of real estate. Every profession and industry has in a way developed its own language and terms that are unique to that endeavor. Real estate is no different. One cannot correctly answer a question if one does not understand the meaning of the words in the question.
For example, “what is the difference between land and real estate?”
Land is defined as the earth’s surface extending downward to the center of the earth and upward to infinity, including permanent natural objects.
Real estate is defined as land at, above and below the Earth’s surface, plus all things permanently attached to it, whether natural or artificial.
Real Property is defined as the interests, benefits, and rights that are automatically included in the ownership of land and real estate.
The Bundle of Rights
Real Property includes what is known as the Bundle of Rights. This concept came from old English common law and it includes the rights of Possession, Control, Enjoyment, Exclusion and Disposition.
Disposition is the right to sell, will, trade or gift real estate that is owned. Enjoyment is the right to use one’s property in any legal manner. Exclusion is the right to keep others from entering or using the property. Possession is the right to use the property. Control means that you can control the property that you own. It is one’s individual domain and you also control the profits that are made.
We all learn differently, so I like to use visuals in addition to words. A way to remember what is included in the bundle of rights is:
The Bundle of Legal Rights
E – Enjoyment
E – Exclusion
P – Possession
C – Control