all right so tracker one is very with and it's meant to be just a basic introduction to the topics that we're gonna cover in the class just very basic real estate projects and you know for someone who just f.y.i on the slides I've noticed somebody already doing it it does help sometimes just take the packet out of your binder and just deal with the one if you wanted some of that behind there's a little bit unwieldy just time to take it out and deal with that one packet you can stick them back in there it's whatever you're more comfortable with for that binder is going to be really helpful in keeping you organized but you have a lot of papers by the end of this class we've run through a lot of paper around right checker one basic concept so first thing we need to talk about is the tabulator later you're going to see these suffixes so it's it's just something we stick on the end of a word it changes its meaning you're gonna see these two subjects lo r and ee a lot throughout this class so I want to make sure that we have an understanding of what they mean before we even get going Bart when you see it at the end of a word means Giver that's the person doing the giving of whatever we're talking about so let's just focus on like the word offer the word offer the offer or is the person who is making the offer the person who is giving the offer so in a traditional buyer-seller scenario who do you think we're even making the offer would that be the buyer making the offer the seller making the offer buyer makes the offer to the buyers would be called the what offer or or the buyer would be the offer for which we make the seller the offer II whenever you see a e on the end of a word that means the person receiving the thing that you're talking about so the offer orders the person making the offer the offer is the person who is receiving the offer does that make sense for everybody when we talk about beads we're going to use the word grant so we have a grand tour and we have a grant II the grand tour is the person who is making the grant or giving the grant the PERT the person receiving it is the one the grantee a grantor is a person whose transferring ownership you're gonna hear me use that word a lot grand or so in a buyer seller situation who is the grant or who would be transferring ownership to the other person is that the buyer who's transferring ownership to the seller was the who's transferring ownership to the buyer-seller transferring ownership to the buyer so who would be the Grand Tour the seller would be and who would be the grantee goodbye does that make sense the grant is the transfer of ownership so a grantor would be whoever is has ownership to transfer so the seller and the grantee would be the person receiving ownership which would be either what the Bible bye-bye you need to start to connect those words because you're going to give me use them over and over and over and I must be using well I'm not using them over and over to be confusing I'm using over and over to make you comfortable with them you need to get comfortable with a word like Grand Tour so what do I mean when I say the word gran told you and I did this a lot by the way I just asked questions I wanted is how to keep you engaged so what I mean when I say the word Grand Tour later today that's a person doing what transferring one ownership to somebody else so the word grand or just means any person who owns property and it's transferring that word shell over to somebody else traditionally that would be a solar could also be somebody who's giving a gift if somebody has gifting property would they also be called a grantor yeah because they're taking down or shipping doing what with it transfer air or granting it come home so Kevin I grant you ownership I am the grant would another grant or grantee granite or and Kevin would be the grantee does that make sense for everybody so we're going to see the Ord e suffix a lot so we'll just get out of the way and it doesn't make a difference what word you attach it to like for example lease we have less ease and less hours they're less sores that weren't going to be person giving the lease well what is Elise what two parties agreed to landlord-tenant so who do you think is the less or who's giving the lease the landlords are just right there you learn how to use the word the lessor correctly so who is receiving the lease the tenant sourcebook what's the legal terminology for attempt a lessee or lessee and say we see is pronounced lessee but lessee works just fine you know what we're talking about you see how just knowing that a cab you Larry helps you instantly be able to learn the topic are you are you with me on that so it's really important that you got these sub bases them so let us see them over and over and over all right this chapter again just an overview really basic not a lot in here it's gonna show up on the tail just gonna make it get you in the mode of things all right we care about real property you're gonna see the words real property and personal property a lot in this class real property is real estate personal property is everything else this is a real estate class so we care about real property when we talk about selling something in this class we're talking about kids selling the real property not about selling what a personal property give me some examples of things you think are personal property I'm sorry your car it's a perfect example so if we sell the house we're selling the cars are in the driveway with it no no we're not so that differentiation between real property and personal property is a big deal here is a definition of real property so real property includes land and everything that's permanently attached to the land and then we give you just word appurtenant this is a word this is your big word for the day the word pertinent it's a fancy word and we're going to see it over and over and over in this class Apartments is anything there's permanently attached to the land now you need to understand these can be permanently attached either physically you can see them is this building permanently attached to the land yes are you shaking itching how would it not be talked to you serious I'm not putting you on the spot I don't wanna know where your brain is ah that's what I thought you were that's why I wanted to point it out she said it could be bulldoze so let's talk about what the word permanently attached means all right bye I think Cameron all right like Cameron's definition that's pretty good because I can't see it from here so yeah bye Cameron's of perdition nothing would ever be permanently attached but she said you could drop a thermonuclear bomb on it then we go away right that's not a definition of permanent attachment of it so we need to eliminate that kind of a thought process here's my definition of permanently attached it's not in your size you might want to write it down is it nailed screwed glued or buried in the ground that's a permanent attachment anything that is nail screwed good or buried in the ground so love that definition is this building a permanent attachment to this property absolutely so with a tree be a permanent attachment to this property yes and what I'm telling you is those are appurtenances appurtenances are things that are permanently attached but there are also lots of appurtenances to this property that you can't see wait for example the city has placed restrictions on this property called zone e zoning limits what you can do with the property those restrictions are approved which means the restrictions are what attached and what that means is they never get unattached see this word a pertinent things that are pertinent are forever and that's really important when we talk about real property because appurtenant says they're going to be things that transfer with the real property in other words if I sell this piece of land I'm not only selling the land but what else am i selling worth it everything permanently attached so therefore the building the trees the sidewalks all those are purposes and not just those physical purposes but the ones we can't see because there's only go with the property the meaning limitations that are attached to the property or with it so that next summer they don't walk limitations for them that's what part of the video that's what the word opponents think so whenever you visit it over and over and over personal private is anything that's not real property the biggest characteristic I don't want you to lose sight of the forest for the trees the biggest characteristic of personal property is this it can move now that's not going to always be the case but if you're trying to decide if something is personal property or real property what's the first question you should ask yourself is it movable is it permanently attached because if it was permanently attached if it was nailed screwed glued or buried in the ground could I do that with it No so what do you think this chair is is that real property is it personal property it's personal property it's personal probably the biggest third additional personal property is always going to be ladies movable that's not the only characteristic but it is the biggest one yes sir rent until rent is from Eastern North Carolina because we're always on my car then I'm blocks in the driveway on the first day of life he's questioned a lot I love this question Brennan's question was if I'm selling the property and there's a car on the property disbanded nicely does it become for the probably the answer is no this is not permanently attached to the property now generally speaking it's expected that the seller would remove any personal property prior to closing what I will tell you about something like that though is ultimately the responsibility for that falls back on where behind the property because once you bought it it's yours so the real answer there is if the buyer wants that move the best course of action for them is not to do what not to close don't give them your money until you're satisfied with the condition of the property because one she paid for it it belongs to you does that make sense so if the buyer had an objection to that car being there on the day of person that you just say no we're not closing to get rid of that good good all right we also use different words to refer to personal property like they'll say things like chattel sometimes or personal tea personal property all of that means the same thing those are just always everything same thing does it levitating it's levitating really I want to see this house we really need to go on a tour today so you don't like when they are physically relocating the house they physically picked it up put it on the back of a truck so for the time being it's on the back of the truck what kind of property is its personal property and then once they get it to its destination and they reattach it to a new piece of property but somewhat again real property okay so yeah I thought you met my houses on stilts I was making fun of it but you really were talking about lumens on Sun when it's on the dielectric personally absolutely good plan here's a definition of land says land is the Earth's surface and everything above us and everything blowing not just the actual service but everything below and everything above is land so what that means folks is when you purchase real estate or real property or land not only are you purchasing what you can see but you're also purchasing one things that are below and things that are above so if we discover that there is some type of natural resource below the ground oil gas water mills go diamonds whatever it happens to be who do those things belong to they belong to whomever homes what what was that doing the land above it does that make sense for everybody because when you purchase land at least in this country a definition we use of land is that it's everything both above and below the surface of the earth is included in that and that's different folks in other countries that's the definition that's somewhat unique to the United States there are other countries or even if you own the real property you don't necessarily own what's below it or above it those might be national sort of resources that's not the way it works here we own everything above everybody was beyond that okay so I believe it's whether that is true right below subsurface resources belong to the state so that's a different definition that we utilize in the United States okay real estate is the land and everything that's attached through the land so real estate is just a bigger definition of land so when we talk about the real estate we're now including things like structures that are on the land okay and real property ultimately means the same thing as real estate so we're going to use those terms interchangeably for the rest of the class they kind of mean exactly the same thing whether you see real estate real property land we use them all interchangeably they all mean the exact same thing it's the service of everything above everything below it and everything that's attached to it that's the definition we use for real estate right land I some physical characteristics it can't be moved it's a movable it can't be destroyed it's indestructible and it is unique this one is the important one so I want you to highlight or circle uniqueness as a characteristic of land it's probably the most important characteristic of land that is unique that every piece of land is completely unique from every other piece of land that's an important legal idea and here's why if you get into dispute this being is a an argument we're the most dispute end up in this country in a court of law somebody Sue's somebody well if you then don't put up to speed over a real estate transaction let's say for example a seller is trying to back out of a deal a seller has decided they don't want to sell even though they had agreed to sell the buyer can take that seller to court and force them to sell them that property the buyers not asking for money or some damages they're asking the court to force them to sell that property and the reason they can ask the court to do that is because they can't get that piece of property from anywhere else it is completely what you need there is no replacement for it if I if I agreed to buy this property there's nothing else you can substitute for it because every single property is completely unique and we view an that way even in the most cookie-cutter subdivisions you can imagine even if everyone looks the same to you in the eyes of the law there is no substituting one piece of land for another everybody okay with that idea that's the most important of these characteristics now we also have some economic characteristics of of land it is scarce that's an economic characteristic as the more scarce Argo lesson that there is available what do you think that does to the value of it it goes up location Location somebody a characteristic but it's actually an economic characteristic and here's why we always said three most important words in real estate or what location Location Location and why are they the three most important ones in real estate they affect what most directly the value of the property the better the location is that will prefer the location is the more value the property has such an economic type characteristic this word improvements there's a word you oughta write a definition for I'm going to see that word a lot this building is an improvement the sidewalk out there the parking lot those are improvements what do they all have in common how they hit you they would hey by who either the owner or some other person an improvement is something that is placed on a piece of real property by humans that's designed to do what to the value to increase or add value so anything that's added to a property that's designed to add value to the property by humans is considered an improvement so that example this building is an improvement you can see are there going to be improvements you can't see yeah about like things like water and sewer I can't see those what are the improvements sure they are they add value to the property and usefulness to the property so improvements are any kinds of changes that people make to real property desire to add value to it again as I said don't do not get freaked out when you see different words for real property real team real estate they all mean the same thing these are not different terminologies they all mean the same thing this idea of the highest of those uses something's gonna come up a lot in the price I mean I know it seems like we're flying through a lot of topics trust me we will get to a point where we slow down and spend minutes and minutes and minutes on one side this chapter is just meant to be a quick overview of things highest and best use the idea of highest and best use because every property has one special use one thing that you feel Marie used it for that purpose would get the best return on that investment most properties are already being used for their highest and best use we all recognize when something's not being used for its highest misuse so let me give you an example of what I mean by that if you were to see in the middle of carry a little tiny brick house built about 1950 that's sitting on two acres of land on the corner of a busy intersection and it's surrounded by shopping centers and restaurants and all those things that it's right on the corner of a busy intersection would you look at that you're the man those people are doing the best thing possible with that two acres of land keeping that little 1,500 square foot great ranch house on it would you say that or would you kiss their friend in that number to scientific question house up because they could keep the property as it is and the value of pillow because it isn't being used it also be well and and that's why so I get where you're coming from that's why in this case there is a highest and best use because the highest misuse gives the things that they could do at that one moment in time they could of course delay development and that might bring a higher value down the road the highest of those uses right now so when we're asking the question we're saying what would bring the greatest return on my investment right at this second because that makes sense and so it's not where the case on that property what with the highest and the shoes that probably would be probably be assuming that any areas on for commercial which they obviously are because they're surrounded by others commercial development they got two acres here on the corner of a busy intersection what's the highest and best use for that process at some time a business probably a sheet strike a gas station of some kind if it's on the corner of a busy intersection so when we and my point in saying that is when you're trying to come up with a value for that house you're not gonna say oh well 1500 square foot ranch is worth this you're gonna say well who cares what it is we're gonna value it as if it was what a vacant lot for a gas station machine because that your ties the best use yes ma'am what if there was a historic place so what you're saying if there's some restriction that would prevent the development of that one particular a lot dependent by unit size and best shoes my question of you may hide that one-line designation because clearly everything else around it has been redeveloped right generally speaking we're stretching them resident on historic preservation don't work that way they cover blanketed areas it's not one everybody's thinking because you need yes honestly if you only met one lot and they just declare over your life is the only one that's historic preservation so you can't tear down your little crappy 1950 house but everybody else can who is the owner can they sort themselves money yes absolutely yeah they don't need to have it be restored they can just not develop it affects what they want to do with it but that has nothing to do with the ties of this huge see this is the thing you have to come to craft with it's about real estate ready for it it's an industry built on greed it's all about the money when we talk about high things like highest and best use we're not talking about a higher calling we're not talking about being good for Humanity we're not talking about doing favor for our fellow man we're talking about what money highest and best use of a monetary consideration it's always about the money and I'm not saying that to demean those ideas at all I'm just saying I won't get yourself in the right frame month or right frame of mind so when we talk about something like hi some issues I'm coming I don't you where you are now when we talk about something like highest of issues we're talking from a monetary perspective what that art could do right now right in this one moment that we get them the greatest return on that investment and could that change over time could the highest of issues of a probably change from one time period to another like for example look at Briar Creek what was the highest and best use of that land in Brier Creek 30 years ago cornfield right cuz that's all I'm saying yeah you could have built a best buy out there but who would have come but what's the highest inventions that probably now retail commercial residential anything other than could someone still plant corn if they wanted to own their land out there of course you would look at them and say are you dumber than a bag of hammers because you're wasting your investment correct so that Cameron question is Justin here it should say so if we had that example of the law in here that corner lot even if it was a really nice house if I was trying to come up with an estimate of value for that property I wouldn't necessarily look at valuing it as a house I would simply value it and its potential for commercial development and the answer is yes because that would probably be a much higher number even than value even if it's a super nice house it's always going to be probably more valuable if it were converted to that commercial use because that kind of use just brings a much greater return on investment okay the Second Empire yeah so super nice first on it are you taking us there for lunch okay it's very nice yes it is very nice absolutely that's right make the highest emissions or something other than its original use and is kind of going downhill you had the opportunity you did it reason for residential that that group represents a better return the highest in their shoes if now the land is more valuable as a residential property than it is as commercial property because the commercial users have declined in that area yeah absolutely so I bet you some change in that direction as well it's always gonna be what brings the best return on my investment right now okay okay good good all right investing in real estate we're gonna talk a lot about investment that there's a whole chapter about the Baths of investment investment is not something you're expected to be an expert on but you are inspected to understand the basics of investment there are huge advantages to investing in real estate the biggest advantage is that real property over a long enough time period never loses value in this country we can say that with certainty cuz it never has now if you look over a short time period could you find time periods where real property has lost value like if you bought a piece of property in 2005 and you had to sell it in 2008 or 2009 could you have lost value in that real properties yes that's not what we mean when we say real property doesn't lose value because that's a short-term investment what we mean is if you bought that property in 1900 and you sold it in 2008 would you lose money or would it still be a fantastically good investment it would be a fantastically good investment because the reason real property has never once lost value in this country is simple what is our population continuing to do grow there are always more people who occupy the same amount of land so what that inevitably due to the value of land it makes it more valuable because you have more people competing for the same land space does that make sense very light and so that may that's the huge advantage of investment in real estate it's what we call a permanence of the investment that over time there is nothing as permanent as investing in real estate but these disadvantage of investing in real estate is it's not liquid it's not a liquid investment liquid means cash or quickly converted to cash obviously cash is a liquid investment because this got money deposited in the bank or better than coffee can in the backyard put in your mattress that's a liquid investment because you can convert that right away music stops are also considered a liquid investment if you will look this morning then you had $100,000 worth of stock at Microsoft could you have $100,000 in your account by this afternoon if you wanted to sure you might ask the tax implications and all those things but you could sell it today yet the money could you wake up this morning and go you know I hate this house I want my money god it would take a while transferring real property is a slow process and that's the biggest disadvantage in investing in real estate is that you can't always access the cash on demand that's the biggest limitation about investment in real estate that's about all we're going to talk about about investment at least at this point there are lots of other areas that you can go into with the real estate license you don't have to just sell that's all I need to say about that and then we talked about the different categories of real estate what are the different uses of real property well we're all familiar with residential use we've seen that we're also familiar with commercial use you might not be as familiar with things like industrial uses or agricultural uses or special purpose uses what I'm going to do that over here is I'm actually going to stop question I'm gonna simplify this list I'm gonna simplify it down from five to three because the truth is there's really only three different types of uses you these three in the middle commercial industrial government will mushroom the government why do I own commercial property what's the purpose of the only commercial property to make money why do I learn industrial property to make money why do our agricultural property to make money so realistically aren't they all the same thing they're all money-making properties and that's exactly what we're going to do we're gonna simplify these down to three things we're gonna talk about residential property and residential property I'm not looking at it saying it's residential because we could have houses both the residential property and income producing property its residential is the owner what lives there if they bought it because they want to live in it could I also own a house and have it be an income producing property sure and that's what we're going to call it then we're not residential probably an auto and call it what income producing property that's our second Tattler i7k where real estate is anything that the owner purchased because their primary goal is to do what made money so whoever owns this building Greg Hobbs on this building why is he on this building it's not because he wants to own office space it's not because he likes dealing with tenant he owns this bill because he wants to produce what money he wants to produce income this is an income generating endeavor for him so the second category that we have is income producing property anything that the owner purchased because it won't make money off of it and then finally special use properties special use properties are ones that don't fit into either first evaluate so we don't want put all that money on and we don't live there give me some examples of those kinds of factors church library school that one he said school as well okay so fire house fire department library Church School University building all of those places would fall under special use because we don't home them to make money and we don't own them to live in does that make sense for everybody and that's what we call it especially use properties because they have a very specialized use in our society the vast majority of real estate Falls with one of the first two categories but the vast majority of real estate is either residential or one or any of them producing so when you get out of have an estate commercial it's either residential or income property residential or income deaf commercial falls under income but so does other things so do those things well like a homeless shelter for example that would be especially is property because it doesn't fit we don't want it to make money on I don't think there are any fool profit shelters that I'm aware of but and we don't own it we don't own it to live there yes people might live there but that's not the purpose that the owner has for it is that they owner lives it its purpose is to serve some other girl so especially in sure well so it's a really good question and this question is you know there's a charter school or if it's a pilot school do we consider that income-producing no most likely not the zone is still going to be nonprofit entities yes you have to pay to attend them but realistically there's a parent or depending any food it just depends on where the funding comes from but the goal was not to make money or at least it's not supposed to be and so it's still considered especially whose property is somebody I said about churches when something like I'm not going there I'm not they're not you know the net can't work as far as the real estate market supplying the man just have an offsetting relationship with one another when supply goes up where's the band good if they do the opposite so it's a fiber supplements abandoned it goes down when demand goes up shortly what happens to supply goes down it goes down dramatically think about the market right here in the Triangle right now what is the band of light in the residential market place in the Triangle right now it's insane it's in clarity well that's why what does that lead to on the supply side there is no supply it's not better and that's one of the reasons that we're so we're seeing such crazy run ups and prices because right now the supply that hand dynamic is so out of balance in the Triangle and I hope the barn that see people hear the things they only have such a healthy you know that's not really helps the same night folks and a healthy market supply and demand a relatively what balance you have a relatively balanced level of supply and demand right now we're tilted all-in-one left the problem will be until it all when wait is it inevitable you overreact and we create too much supply and then what does that do and when you flip that seesaw back the other direction what happens all the pricing increases that you have when you were flip this way they evaporated nice because they were based on the fact that you had more demand than you had supply when it puts the other direction they go away and that's why I'm saying to you don't necessarily think of it as a good thing when you see prices are just ramping up all of a sudden because the thing that creates that dynamic could easily change at some point in time if we all of a sudden have a brand new supply of housing what if all of a sudden Wake County to spending in and permitted developers to build high-rise condominiums everywhere and way down would that change the supply dynamic sure it would what would it be the pricing it would lower it tremendously because it would raise the available inventory which would decrease the demand does that make sense further line so this is a very delicate balancing act now you don't even memorize a and these things but even just the examples of things that could have an effect on supplier demand by for example population this population effect the man yes as your population grows what is your demand it goes up we can't create more supply as your demand goes up what happens your supply it's lower and lower and lower and that's what we've seen right now in the timing the very low supply very high domain and here at the home something that's a good thing if you don't the terrible thing how many of you have tried to purchase something the last two years any of you tried to purchase home fun aunt but what sport out there where'd you try to buy goodly successful more than west right how many pocket where was it where's property it's in Northeast Raleigh for me did you offer them before you got this one was this first when you offer them or yes that's good that's good how much above list price was $5,000 above list price how many days they put on the market first day how could you have a lot of time to think about it you know and sleep on and all that sort of thing 32 you're ready to drive you over didn't say malli to start now right now you have to know now yes it's fun they have a lifetime commitment like that isn't it everybody how you feel about these poor people who have made offers on eight different houses before they can finally get one and that is a very real dynamic right now and that's something you have to accept that as a real estate what will make your life a living hell folks it's not fun it's not fun representing a buyer who's had to make it all from eight different properties for so many things you get paid by the way once if they actually close but on all those other ones you did just as much work you're not get made anything for it they're getting frustrated you're getting frustrated you're running around having to show off this stuff daily as soon as it pops on the market you're you know they're looking to you for advice you don't even know what advice to give cuz you're already a book was prized you've offered the first for one child at this point and still I'm getting operate except to when this supply-demand dynamic decided that once they can create some crazy things in the marketplace and we're seeing that we're certainly seeing that line then and that's it for chapter one so told you it would be a very quick overview Trustin chapter 2 will not be as nearly as quick all right so we're going to dive right into chat with you boy I didn't flip over to chapter 3 and this is where we really start beginning to immediately information what progress will slow down in fact we will probably end chapter 2 all with the rest of today probably chapter 2 for today because these topics get much more involved as we get into chapter 2 so when we talk about chapter 2 chapter 2 is all about the concept of ownership of owning property when you talk about ownership ownership is not one thing it's actually a bundle of things it's a one know of things that have been tied together bundle of Rights that have been tied together there's five of them and they all have a little bit of a different meaning like for example the right of possession let's talk about the right of possession for just a second and it's on you guys on the next slide so you don't have to write it down and I just want to talk to you about the right of possession is the right to be in a property see we are possessing this property right now and here's what's interesting about that I don't want this property you don't own this property but yet here we are possessing this property how do you think that's possible if the right of possession belongs to the owner and it does how is it possible that we could legally be in possession of this property because possession just makes the legal right to occupy this property how is it that I have the legal right to possess this property and conduct classes here even though I don't own this property we are at least so what you guys think we have a lease I believe so what that lease actually did was to take that right of possession away from the owner and give it the last seee which will be me in this case I as the lessee now have the right of possession so show you something here I'm gonna use Bryson it's a guinea pig here's not a bundle of legal rights they spiral right right of control right of possession right of disposition exclusion enjoyment okay when it's all about a little bit about each one what they mainly talk about the right of possession what did we say the right of possession was the right to one to be you to occupy the property the right of disposition disposition disposing of the private issues right to sell the property for example the right of exclusion what the right of experience design officer to the right of possession what do you think the right of exclusion is to keep people out to keep you well you don't want in the property out so we when Bryce and purchases a property he purchases that whole bundle of Rights all five of those rights are bundled up into one things everybody with me on that so now Bryson is the owner of the property he owns that entire legal bundle of Rights not just one piece but all of it but he decides that he's going to lease the property out to Illya now the moment they sign that lease he is transferring the whole bundle and saw the whole thing to it the right of possession and the right of exclusion over to Illya she's a 10 she has the right to occupy the property and she has the right to tell other people at one but they're not allowed in the property and that pre Ferris said by a tenant so now that bundle has actually been what unbundled it's been untied it's been breaking up are you with me so far now who still owns the property Bryson knows but look at his bundle of Rights he has less so now he puts the property up for sale he sells it to Kevin so he's the grantor Kevin is the one grantee he sells the property to Kevin so he sells in the bundle of Rights but notice the bundle is short right who still has the right of possession and the right of exclusion Aliyah does so let's apply that to a real-world things and we're up in the clouds now let's break it down to the real world much the very real world mission based on what you just saw visually when you sell property in North Carolina that's occupied by a tenant does the new owner have to honor that lease what's the answer yes they absolutely do because Bryson can't sell what he doesn't have and what two rights that he not have he didn't have the right of exclusion or possession so when he sold the property he only sold three of the five rights over to Kevin does that make sense now eventually are the rights going to be reunited is the right of possession the right exclusion going to come back yeah when the lease does what and when the lease expires but until that lease expires Kevin is stuck with a leader whether he wants to be or not and make any difference because he has to understand that she purchased those rights for that amount of time is everybody with me on that that's the whole purpose of belief now ask another very real-world question we said the right of possession is the right to occupy the property right Kevin Holmes this property now he wants to go in and check on his property yes people over that open the door to check on the property right can't the grocery the right of possession is the right to do what be in the property who has the right of possession a leader good tenant does that make sense for everyone so now real world whooshing can a landlord enter literally strawberry any time they like to better not there's a fancy legal term for that it's called breaking and entering it's exactly what it's called you don't have the legal right to be there man yes Bryson's have been smart when he signed that lease would he have inserted something in the least getting aleeah's permission to enter the property for things like property inspections yeah but if he doesn't do that does is there any right to enter that property not one so real world questions 10min North Carolina has a verbal lease they don't have anything in writing landlord insists on doing a property inspection to inspect the condition of the property and enters the home while it says at work after posting 24 hours notice on the door is this illegal activity in North Carolina what's the answer no because if they have a verbal we don't have anything in writing saying that the tenant ever gave permission for the landlord to do what they enter their property see how this actually matters these bundles of rights actually matter in a very real-world thing so now what's going to happen when a Lea's lease expires for lease expires she moves out of the property what happens with the right of possession of the right of exclusion is reunited thank you Kevin and now Anthony enter the property absolutely and he can decide at that point in time if he wants to move in himself or occupy the property or if he wants to turn around and do what with it again lease it out and somebody else does that clerk in a little bit for him yes sir so the right of enjoyment is actually to the owner so the right of enjoyment is not what you think it is it sounds like we can have a good time right there and the right of enjoyment in a legal sense is actually the right not to have your ownership challenged it's called erotic quiet enjoyment in other words you don't have to deal with somebody showing I'm going ahead property belongs to me that's the owner yeah so it's really enjoying that's a bad way to determine so that's yeah right it would not it would just be possession and exclusion okay he was family Bryson was originally right here on the front okay why does he own it did he sell it to him he saw it together shoulder property what did I'm sorry about her name Illya Illya what she was a tenant for the great thing so here this was a setup pricing on the property Bryson purchased the privates he had the whole legal bundle of rights and then he leased the property to believe and that case so what that gave her was the rights of possession and exclusion right and then Bryson decided after the lease the property decided he wanted to sell the property to Kevin so he sells the property to kill him but that doesn't terminate the lease the lease continues to go on with a napkin hey everybody tell me what comes to the entering the rises question is in the case of an oil lease isn't it the word of the owner against the tenant no because what the state of North Carolina does is he Crete in the king in the absence of a written lease the state creates one for you and the state's not going to give you right back since the property like that so if you want the right access the property you need to have a written lease that specifies that emergencies are different if there's an emergency like a life-threatening thing or something that threatens the property generally speaking the law carves out the ability to enter the property for that kind of a purpose but what I would tell you is even in the case of an emergency if it's an emergency what number should can be dialing 9 1 1 don't try to make a case that you entered that property for emergency purposes if you haven't first dialed 9-1-1 and waited for them to show up to go in the property with you we've had that haven't people said well Holly went in there cuz it was an emergency and you know were the first question the Madison's can ask is where's the record of the 9-1-1 call where did you call the authorities if it was an emergency clearly you should have been in contact with the authorities wife is that the tenant safety so what you born into Dirty Harry you should have called the police she sort of made about that so if you're claiming that's an emergency you should be off you should be accompanied by some type of a law enforcement officer building great question if the contact is violated by the tenant does that give the landlord permission to go into the building here's the better question who's to say that tenant has violated the contract I will ask the same question who's to say they have violated the contract because there's only one say that matters in such a question where is that safe scene with the landfill it doesn't get to the side of the tenants violating the contract who has to make that decision a court of law so to follow up the answer to your question is there's no way for that landlord to unilaterally which just means by themselves say you violate at least I'm going in they'd have to first go in to court and your court to agree that tenant have violated the least that's what contracts are for so that's when we get to contract law one of the things I'm going to stress over and over and over is that contracts aren't for us we are mere mortal people contracts are for judges and magistrates and the courts of law because they ultimately have to say so on those documents we can't say I think we're getting say yes I believe the tenant is in breach but I have to get a court of law to agree with me before I can take action because all I've done by entering the property is made it so that we both reach the agreement they have and then I have and as the only expression goes two wrongs don't make a right and that's really specially when you spell training a property you're renting a property they aren't paying the rent and you feel like you need to go in and check on the property and he's not been paying around now I'm going in here you still gonna go for that so be careful probably more of an answer you wanted but that's a - antenna we do we understand this idea of a bundle of Rights and then they can be unbundled okay good look we talked about what each one was right this position I can sell it the right of exclusion I can tell others to get out and the right of possession I have the right to be here on occupy those are the ones I think people might see the most disposition possession exclusion so if you wanted to highlight ones that you just need to be familiar with again sort of a level one thing just definitional and then again back to our big word of the day the appurtenance what do we say I hurt it was it's permanent it's attached it can be a physical attachment it can also be a thing that we can't see that's attached so restrictions like zoning restrictions or covenants how many of you have covenants y'all in your house you have covenants on those properties those covenants are a potent ences which means they're attached for how long forever and this is my favorite expression in the world you'll hear me music probably a thousand times throughout the class the fleas come with the gold that has an old certain expression for those of you who are not from the south which means you don't get to pick and choose which things you buy if you're buying the dog you're also buying the water the fleas so for example I would love to think I could go out and buy a property without the covenants but I can't because the covenants are appurtenant which means they are permanently one attached to the property so when you hear people when you hear people complain about this idea who gave them the right tell me I couldn't put up a fence my backyard so there's bitching because they're looking at their covenants and then the HOA has told them that they can't put a fence up in their backyard and that's another ruler they say who gives them the right to tell me I can't put a fence up what's the answer to that question yourself you gave them the right because that rule was there when you did what when you bought the property and if you didn't know that was the rule when you bought the property then it's your own fault because that rule was appurtenant it was there long before you and it's gonna be there long after you because that rule was permanently attached to that property does that make sense further money that's what we mean by an impertinent you can't shake it you can't get rid of it even if you wanted there are some things that are pertinent so which are great this building isn't a pertinence to this property well obviously if I buy the land I would warn by this appurtenance but there going to be other things like the restrictions about what I'm doing this property which I don't want doesn't matter they're all attached they're all pertinent to the property so we're gonna hit up we're over and over and over and most of the time these do last forever meaning that if the property sold what's going to happen to the appurtenances they couldn't transfer with the property and the new owner is going to have to take responsibility for so just to give you an idea and then put a little worm and your brain about that we're done about liens later on today or tomorrow probably tomorrow we'll get into liens a lien we need to know somebody money and they placed a lien on their property as collateral so if you don't pay them they can do what what's collide with me if you don't pay them they do it they can repossess them when we got foreclosed right they can foreclose on the property so they can get their money back that's what a lien is it's the right to foreclose on your property so this again getting their money back what's the most common example that you can think about you have a lien that would be attached to a piece of real property a mortgage loan that's a good example property taxes property tax lien because if I would pay my mortgage note what are they going to do what's the lender gonna do for others which means they're going to take ownership of the property and sell it to get their money back because that makes sense for everybody leans our purposes which means they last how long forever and which leaves a transfer with the property so Italy is buying a house the current owner has a mortgage loan alia buys the property and the current owner decides not to pay off the mortgage loan what's the status of the lien still we're attached to the property which now belongs to her Alya so if that person stops paying on that note whose property is it that it's going to be foreclosed on Elena's property that's what the lien of exactitude that ain't fair that any right but it is mr. Salinas fault that happen if alia had been doing her job as a buyer whether she had made sure happened before she took ownership with the property pay that lien would owe clear that lien I'm not taking ownership of this thing while that liens attached because once I take ownership it's too late the lien comes with it because it's what because it's appurtenant that makes sense very long stage with the property these are really important understand folks well it is the closing attorneys thing but ultimately that's the buyers responsibility to lose a closing attorney work for the buyer why we hire a closing attorney because we're not smart enough for you that our own so we hire them to represent our best interest right so it's the buyer and that close an attorney to take care of things like that for them that's exactly right but if a legal were tough I mean you know people do silly things let's just say Lee is paying cash for the property she won't pay closer to 10,000 my final pay them $1,000 this was a simple thing I'll need a closing attorney so she buys that property from both she gives me $200,000 - and both sides a deed over to her both got a mortgage for $180,000 he takes her $200,000 and she moves to Columbia well no attached to the property right now she doesn't know the money we can't ever it's not like she owns the money to the bank but that's really kind of the difference of distinction without a difference because ultimately if the long doesn't get paid whose properties don't get taken away his property so what should she have done before she handed both at $200,000 made sure that lien was satisfied that lien was paid off because she needs to be aware that that lien is going to transfer with the property because it is a perfect so we she preferred because of attorney $1,000 to make sure there's things get satisfied yep there's that starting to click a little bit about this ideal amount of pertinence it's always going to transfer with the property so you you have to make sure to protect against those things these are things that it's going to be absolutely your responsibility to make your client aware of whether your client or your customer whether you represent them or not to make them aware of all the appurtenances both or they'd buy the property because it's too late once they buy the property these things are attached to the property once ownership transferred the appurtenances are also transferred so it's very important to make people aware of what they're getting before they you so one of the first dashboards of a pertinence as we talked about or what we call subsurface right some service rights are just the rights anything below the ground remember we said you own everything not only above but everything was below so some service rights are appurtenances the status of the subsurface rights are occurrences we should really say the rights are a pertinent what we should say is the status of the right so we'll go back to Kevin Lee Kevin bought that property did he also purchase the subsurface rights yes he did because that status of the subsurface rights has been there with the property well guess what Kevin could sell not the property but just the rights what if any homes are gas exploration company and she wants to buy the rights to any gas that might be found below the surface of Kevin's property can Kevin sell Andy's company just the gas exploration rights he came in how long is he selling those rights over a period of time forever because that becomes an appurtenance on the property that becomes a dominant status of the property that the oiler - rights have been stripped away from the property so from now on in the future when Kevin sells that property over to Francisco for example he needs to make Francisco where the fact you're buying the property what are you not buying the oil and gas rights so Francisco may come home one day and find a gas has been the property and here's an e out there exporting that gas up and selling it all from getting rich but those are the oil gas rights belong to her company does that make sense very long okay so these subsurface rights are a perfect another new system you have question okay so you're selling here you're saying he can sell the subsurface race but he doesn't have to sell the land correct yes sir so certainly for certain height I need to be leasing the subsurface rights whereas if you were selling them that would be permanently two different things you could lease the subsurface rights you can also sell them police would be first certain amount on sale would be permanent and so that would not impede kept or prevent Kevin from selling the property but he's just got to make future buyers aware of the fact that they're purchasing the property but not to look the subsurface or oil or gas rights and so this is this is not so common here in North Carolina it's possible in orthodic but it's very common mistakes like Texas for example why do you think this would be very common in a state like Texas to strip away the oil and gas exploration rights and sell them separately why there's a lot of what there's a lot of oil there's and so it's very common if you go buy a property in Texas you are not buying the oil and gas rights matter of fact we have a builder in North Carolina they try to make it very common old slick light tell anybody I'm gonna never heard of dr warden they are warden yellow one is a texas-based company because they're based in places so standard operating procedure that when they sold a home they did not sell or convey the oil and gas rights they keep the oil and gas right so if there's ever any finding alloy or gas on that property they could sell the oil and gas rights to all the Lots and the whole neighborhood to a gas exploration company where you follow me on that and so standard in Texas everybody understands that's what happens there Texas nobody understands that in North Carolina because in North Carolina there wasn't even worth having under the ground until the state legislature several years ago approve something called fracking how many of y'all have ever heard of something called fracking fracking is a method of gas exploration where they pump high-pressure water into the ground and shatter the underground substructure causing it to release natural gas and some natural gas exploration that's basically it puts so much pressure on the ground but the underground structure shatters that releases the natural gas that bubbles up and they tap true well now that there's valuable gas that can be extracted legally is there some incentive to probably sell the gas rights to somebody so DR Horton started whatever they sold a home in North Carolina not conveying the oil and gas rights and this went on for about five years and then finally somebody caught on and said wait a minute and your home said well that's not illegal and the seller of Donna said you're right it's not we can fix that and so the state legislature passed a law so you not have to disclose when you're not conveying the oil and gas projects we had a form for it yeah I like the sign saying whether or not you just ripped away they were already doesn't and they are working that so much bad press and got attacked by the North Carolina Attorney Charlotte came back retroactively Lee and date back those oil and gas rights all those property owners so they they did eventually get the oil and gas rights back to those properties yes water rights would also be a subsurface right that's exactly right so you the reason you can put a well in and pump water from the ground is because you own the rights to everything below the surface but if you've so raw all the subsurface rights that would include water as well that happens a lot in states have a lot of agricultural uses where you may sell off your water right so I can say if you have good access to an underground aquifer in your property you might sell the underground water access rights to somebody who needs it to irrigate farmland or something like that yes sir it is almost impossible it is nearly impossible francis this question is how can the buyer a broker know the truth is we largely rely on the seller telling the truth about those kinds of things we rely on the closing attorney doing a title search to make sure there's no documentation of the subsurface rights having been sold and then ultimately reliable title insurance with my title insurance that would cover in case we were to buy the property and not get the oil and gas rights but it is very hard to know for sure very hard yes sir if you sold the early sub-surface rights baby like he lived on the surface that is a whole that's a really good question and a whole and it brings a roll good a good point just because they have the rights to access the things below ground doesn't necessarily mean have the right to like put an oil rig on your yard right that would be a different type of beliefs but they could access it from a from an adjacent property for example so say if they lease the property next door to put the oil rig and you've sold them the subsurface rights what they can tunnel down and over and and so they could be you know for example especially with fracking you might be sitting in your property all of a sudden feel the vibration once when they're injecting that pressurized you know solution everybody look down on the idea of a subsurface right they are purposes so their status is on a curve in cement and that includes water as well because that's a subsurface resource their rights are also a pertinency you can lease the air rights or sell the air rights for example her use of things like cell phone towers would be an example of them now water rights or something you could expect probably to see on the test now we talk about water rights we're talking about rights of property owners whose properties order on water we're not talking about the rights of property owners who have wire on their property if you have a pond on your property or if you have a stream that runs through your property your property's on both sides of the stream this is not affect you we're talking about property owners whose property border their value their property line is water and that's a pretty common thing it's very common if you have a creek or stream for the creek or stream to be the property line especially going either from more rural parts of the state well recognize that the spirit comments of that happened also if you own property on the legs and you own the property on a pond where your property line most likely gonna be where the wire is and so what we're talking about here is where the water is the boundary okay where our property is bounded by water on at least one side there are certain rights that go along with that we need to know what are our rights to access in the water there's a lot of belong to us or does it belong to the public we need to know where our property line begins and ends that's what we're talking about in this section so we have two different kinds or two different bodies of water we have riparian bodies of water and littoral bodies of water I have really never been able to come up with a cutesy way to remember these words I have tried I've twisted it around in my brain just doesn't work riparian is this body water a fresh body of water that doesn't have a tie so anybody large doesn't have time give me examples of that yesterday so that day you wanted to remember Ratan with an R with the river okay littoral ocean okay that way whatever works for you would be great so one other example examples of riparian bodies of water things are know how to tie rivers what else lakes streams creeks ponds any body of water that doesn't have a time this is a littoral body of water with total bodies of water do have a time so in North Carolina what bodies alone are we talking about the Atlantic Ocean the Pamlico Sound the Albemarle Sound those would be examples of littoral bodies of water in North Carolina you need to know what you're talking about because the rights are going to be a little bit different based on the kind of waterway you're talking about everybody good with that so what's the differentiator here whether or not it has a what a time if it has a tie it's a littoral body of water that doesn't have the time it's a riparian body water well repair in bodies of water come in lots of shapes and sizes so we kind of need to break them down a little bit further remember we're still repairing on ones that do or don't have a time which one repair you don't know - okay so they come in lots of shapes and sizes rivers creeks trains well we break those down into ones that are navigable versus ones that aren't non-navigable a riparian body of water that's not a visible would be something like a creep a pond would probably be not a navigable because there's no way to navigate that body of water with a boater but that's the definition so you can navigate the body of water with a motorboat that is navigable if you can't then it's non-navigable is everybody good with me on that definition so for example this picture on the right is that a matter of the Lord nine navigable body of water it's now well it's still riparian because it doesn't have a tie but it's a navigable body of water and that makes a big difference because navigable water always belongs to the public a navigable piece of water or a navigable waterway is a public waterway that means the ownership of the water belongs to the public that means you can access that water everybody it belongs to the public it can be accessed by the public it's not restricted to just some limited group of people it's everybody's to use as they see fit that make sense their life whereas with a non-navigable body of water it's not going to be a public waterway if it can't be navigated there's no need for it to be public and that changes things so here's two pictures turn the lights on for a second see them to see them over there there's two pictures of both riparian bodies of water in North Carolina the one on the list is a non navigable body of water whereas the one on the right is navigable now they're both riparian even want to have or neither one has a time would you agree that it would be hard to navigate this and with a motorboat I mean it's like three inches deep right with these little tiny rocks sticking up - you're not going to navigate that would you agree this one is very much valid as a matter of fact you can see they're doing it out there right now so this waterway lightyear the one on the right who does it belong to the public so they're fools who can access it anybody it belongs to anybody and everybody and so if the water belongs to the public and if I own this piece of land right over here where do you think my property line is going to be it's gonna be where the water starts and that's exactly what we see but look at the other one because it's not navigable the water doesn't belong to the public it belongs to these private landowners so if we have an owner on this side and another on that side so two different owners one on the right and one on the left where is the property line going to be right down the move because that prop that water doesn't belong to the public that actually belongs to these two property owners because it's not navigable does that make sense whereas when this one over here this person property line is here and if you lose property property line will be right there so maybe the gap for the water because the water belongs to the public here there is no gap because the wire actually belongs to the private landowners is everybody okay with that now that makes a big difference if I own this piece of property now I come out here and I see somebody fishing and this string can I tell you get out yes because the stream belongs to me at least this half of it the other half belongs to somebody else but at least if they're sitting right here can't on this side and there's banning fishing I haven't told me get out because that property belongs to me or you wish me on that can I tell somebody to stop fishing right here no because that water belongs in public they gave me on my land but if they're in a photo down here or even if they're waiting on dessert in the water there in the public property everybody okay with that so that brings up all kinds of interesting questions like my parents um wait that's my mom hates when I teach the section my parents the one wait yes I mean even regulate guess same I guess if you go the legs have beautiful houses around it and almost all those beautiful waterfront houses have what sitting out in the water a boathouse hoodoos both houses belong to the public because where are they and the water they don't belong to the people who built them they don't belong to those properties in Kelantan everybody equal it that is the price you pay for putting something in a public waterway does that make sense for every lot through fair honor they are in the public's waterways so therefore they belong to the public it's just the way the law works now don't go try and attach a boat so if you probably get shot I'm not on what that happened to you but that's the way the law works but they belong to the public okay we all get on this episode even those attached to the land the portion and extensions of the public waterway it belongs to the Pope that's exactly right because you can't restrict use in any way of this waterway and by saying only you can't talk to my daughter aren't you restricting use of a pole acquiring you can't use your art can't do it and it belongs to the public that's equal it's the same as that street out there a lot of it playing through the wall it's the same as the street now to drive who does that belong to the public I can use it but I don't have anymore do something than you do and the owner of the building doesn't have any more use of it than we do just because they own the property because it belongs equally to everybody it's the same way you treat that water when it's navigable yes sir just like if you were to land this on the body of water and you may and man-made like river ran from houses that be a part of that water so with which body learn we talking about the event the matter one and you did one what what what before these are like making a boat around your mouth shows me Castle okay so you attach into the water here and then back out over here do you own the property on either side of that is it in other words like you think you're doing it all the way out on the boundary of your property or you're doing it completely with any proper following your property line you might have some problems what I would suggest is doing it with the knee inside your property line in other words leave a three-foot boundary on the inside because as long as it's completely inside your property it's private property this these rules only apply when it's on the boundaries so you didn't want to bring up the issue leave a boundary just to be safe even if it is still accessible will be private property because it's completely within land that you want it very well might not be yeah you'd have to go through all kinds of approvals to you know get a you know to make that modification and they probably wouldn't why are you doing most likely but this is fun to think about I like a moat around my house I show her house and carry what I've had moved in it three million dollars you get remoting cheering it's over in McGregor down there's a castle and yes it has moat there's a drawbridge you want one of those in the market for it it already exists for you it's a locking bar drive are we good on this okay so these are the riparian bodies of water we still going to talk about the littoral bodies of water the toil bodies of water are easier to understand because we don't have to bring them down in a navigable navigable versus non-navigable look the total body water is an ocean folks it's always what navigable so we don't have to worry about that part of it we just uh when when the waters navigable where's the property line gonna be they back up to the other side where was that where was the property line imaginable body of water where the water start trying well apply that here where's the water start that's the whole problem with littoral bodies of water the water starts in different places depending on the time of day doesn't it we would want to ask this question today by the way down the coverage where the water started everybody so wait with electoral body of water as a property line is still going to be where the water starts but because we have a tie because the water moves in and out we choose the high tide line as the property line so this would be the property line a high tide a high water mark is going to be considered the property line now can that change over time if you did meet your ocean for example if the high tide line comes up further in then what guess what moves within the property line moves if the Corps of Engineers comes and pumps and out on the beach and moves the high tide line out by a hundred feet guess what happened to your property line it moves because their property line is going to be defined for these properties as wherever the high tide line is is everybody okay with that idea now what that also means is just like this water belongs to the public what about this exposed land when it is exposed during the parts of the day when this land is exposed who does it belong to the public in North Carolina folks there are no such things as a private beach because of this the only time there is that the only private meet is behind this line does that make sense to everyone but out here is public property it's business that when you see where people are all set up look at where they are they're on the public portion for these and you can't even if you own one of these properties you can't restrict the use of this out here it's called the foreshore you don't need to know that but legally in North Carolina that belongs to the pulling that is not true in every state by the way different states have different laws about this New Jersey is a notable example of one that is very different in New Jersey when you own property on the shoreline you own the beach in front of that property as well and so if you ever end up working on coastal market here in North Carolina you have buyers that are coming from New Jersey you need to have a very long conversation with them about the fact that they're not buying the beach because trust me they think they are we have a case right now is pending at the North Carolina Supreme Court where a couple from New Jersey who bought land in Swan borough has challenged the way North Carolina handles beachfront property and they're saying that that land should belong to the other they push that challenge all the way to the North Carolina Supreme Court and it may be under the United States Supreme Court so that's a notable difference so that's a North Carolina thing of how we treat littoral problems everybody get on that good good that's where the property line with the internet watch our other support rights that we would have and you don't need to know these more passengers definition lateral support and some adjacent support that just means you're not allowed to do anything on your property we could endanger your neighbor's property yeah my property line might be right here and then Bryce's property line is over there but if I dig a 12-foot deep trench right here beside my property line what's going to happen to his it's on his property it's gonna collapse in I can't legally do that I'm not allowed to create a disruption on my property that disturbs his property we owe that right of support to our neighbors everybody out there with that that is a good great spot for our lunch break here thank you so you don't well we make the lunch first day for lunch as always in the compliment right so there will there it is so why don't you come back and just say 1 o'clock ok I'm back at 1 o'clock it's four point-five basically right now there's about thirty God that it's come at at one and then we'll pick back up here