Ownership Rights on the Real Estate License Exam
A variety of rights come with real estate ownership and you’ll need to know about these for the Real Estate License Exam. Some of these include water rights, air rights, surface rights, subsurface rights, and mineral rights. Be prepared for a few definition-type questions and a case study or two that may require you to apply some of what you remember.
Land that’s adjacent to a body of water normally carries with it certain rights relative to that body of water. A real estate agent is expected to know something about what these water rights involve. Although water rights may vary according to local law in specific situations — and a buyer should always consult an attorney to be sure of what their water rights are.
Littoral rights are the rights commonly granted to owners of property that border a bay, a large lake, the ocean, or a sea. Owners of property abutting such bodies of water have an unrestricted right to use the water and ownership of the land up to the average or mean high water mark.
The government owns the land below that point. Littoral rights are appurtenant to the land, which means they go with the land when you sell it.
Riparian rights are the rights of property owners who own land abutting rivers and streams. The rights vary a little depending on whether the river or stream is considered navigable, or capable of supporting commercial water traffic.
When a river or steam is considered navigable, owners of property abutting the river own the land up to the edge of the water or the average or mean high water mark. The state owns the body of the water and the property under the water.
On the other hand, when the river or stream isn’t navigable, the rights of owners with property abutting the river or stream extend to the centerline of the river or stream.
In either case, owners of property that abuts a river or stream have a right to use the water, but they don’t have any right to contaminate the water or interrupt or change the flow of the water.
In agricultural areas, rights to water may be controlled by special agreement between property owners. In addition, where water is scarce, the doctrine of prior appropriation may apply. The doctrine of prior appropriation is state-specific and may be used in states where water resources are limited. It basically places the right to control water resources in the hands of the state rather than individual property owners.
Water rights then are granted by the state to individual property owners. You may want to check whether your state operates under this doctrine and find out about some of the details of how it is implemented.
Some of the rights associated with owning real estate have to do with what’s going on over your head and under your feet. Ownership of land includes the ownership of the land down to the center of the earth and up to infinity. Although practical and legal limitations may inhibit your ability to actually use these rights, you nevertheless still have them.
A property owner has an unlimited right of ownership of the airspace above her land up to infinity; however, these rights may not interfere with aircraft traffic. Air rights frequently are thought of in terms of selling or transferring them to someone else. Picture a 3-story building in a downtown urban area on property zoned such that its owner can build a 20-story building on it.
Although the owner doesn’t want to build those additional 17 stories, someone else does. The owner of the property can sell the air rights of the property to someone else while retaining ownership of the land and the three-story building. The new owner of the air rights could then build up to 17 more stories of building space on top of the existing 3-story building.
The most obvious rights that you get when you own a piece of property are the surface rights, which are the rights to do whatever is legally permitted on the surface of the property. Surface rights generally include construction of structures and physical improvements of all kinds as well as things like planting crops.
Development rights, or the right to build on a piece of property, are rights that can be sold separate from the land. A county can buy development rights from a farmer to preserve the property affected by those rights for environmental purposes.
The farmer/property owner is able to stay and continue farming, but he can never develop the land with houses or other structures. The farmer can even sell the property, but the right to develop the land stays with the county.
Surface rights also include the right to give your neighbor a driveway easement across the surface of your property.
Subsurface and mineral rights
Because you own the property down to the center of the earth, you have the right to use the property beneath the surface or to permit others to use it. An example of subsurface rights is selling the city an underground or subsurface easement to install a sewer line across your property. Subsurface rights often are associated with mineral rights.
Mineral rights are the right to take minerals out of the ground. Today these rights are associated with oil and gas leases, which are agreements that landowners make with companies to take those specific resources or products out of the ground. These leases include the right to build structures necessary to extract oil and gas from the ground.
In some places where valuable minerals were found many years ago, owners sold the property but retained the mineral rights. In areas where these transactions have occurred, seeing a deed that transfers ownership of the property excluding the mineral rights is not uncommon.