What it means to you?
Owning your own piece of real estate is most American’s dream. At least that’s a starter dream, in the end, the sky is the limit. However, once you reach your home ownership goals, you’ll need to know what those assets mean to you. While most people tend to use real estate and real property interchangeably, land, real estate and real property all have their different levels of ownership rights towards the plot of land you claim.
“How so?” You ask?
Well, they all pertain to slightly different aspects of ownership and in some cases, those ownership rights overlap. We will go further into this when we talk about real estate and real property but for now, let’s start with land as a base point.
In this article we’re going to highlight the following three items listed below. We’re also going to explain how these differ and how they are alike. As an added bonus, we’re going to highlight how the Bundle of Legal Rights play a role in the overall picture. The 3 ownership assets are:
- Real Estate
- Real Property
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What Constitute as Land?
In the world of real estate, the meaning of physical “land” is related to the ground you step on and the natural foliage attached to your land. This means that your trees, lakes, ponds, bushes and anything else naturally attached to your land will transfer with the title and into your possession after you execute the land purchase.
Understanding your Real Estate
Unlike land, the term “Real Estate” includes added bonuses to vacant land that helps improve the aesthetics and value of the real estate. Real Estate is in reference to the land and all the physical man-made improvements on that property. Once man-made improvements are erected on the land, you can check the property’s zoning and have it properly appraised and assessed.
If I had a Venn diagram, I could better depict how these two share relations and where they part. Real property essentially ads more assets or ownership rights to the meaning of land, such as man-made improvements. Similarly, real property would also add more ownership rights to the overall picture, such as the “Bundle of Legal Rights”. We talk more about “The Bundle of Legal Rights” on a previous article. Please take some time to catch up by reading that article first to better understand these rights.
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Real Property and All its Legal Rights
As mentioned in the previous segment, real property, unlike real estate, increases the meaning of ownership. It is one thing to have land and its man-made improvements and quite another to also have the ownership rights to gloat about it. While the two words have been used interchangeably for decades, in some instances, real property is used to infer the reality of the Bundle of Legal Rights.
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What are the Physical Components of Land?
There are 3 physical components to ownership of real estate. These components allow the landlord of a freehold estate to dispose of each component individually or all together.
The following components are:
Depending on the location and zoning, a property owner of a vast piece of real estate could use their authority to only sell off portions or different component of the real estate. They could choose to sell their mineral rights to a mining company, while keeping the rest of their real property rights in tack.
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Unlike the other two land components, surface rights have subcategories of water rights one should be aware of.
- Riparian Rights
- Littoral Rights
Riparian Rights: This right is related to land abutting a flowing water path, much like banks of a stream or river. The owners of this land do not own the river or stream, but they do have the right to use it for recreational purposes such as swimming, boating, or fishing. It can be compared to the common pool area in a property subdivision. You make reasonable use of the waterways with multiple riparian landlords, while protecting and not contaminating or altering the flow of water in the area.
Littoral Rights: This right focuses on larger scales; it is related to land abutting oceans and tidal bodies of water. You can also add both ocean front properties and gulf-front properties in Littoral Rights. The owners of this surface right have some similar rights as with riparian. Additionally, they own the land next to the water, up to the average high-water mark, according to real estate knowledge.
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Subsurface and Air Rights
These rights focus on the minerals and other assets under the surface as well as the air rights above the surface. As mentioned earlier, a landowner can sell their silver mineral deposits to a mining company while selling their air rights to a private airport.
As a landowner, you will have these options based on your location and local zoning laws. This can either encourage you to accept an offer of segments of your real property or give you reasons to protect it all.
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