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A distinction is commonly made at law between two types of properties: real property and personal property. Real property generally consists of land and whatever is erected, growing upon or affixed to the land. The term “real estate” has a precise historic origin: in England real actions could be taken in court in respect of land and personal actions could be taken in respect of other types of property. Therefore, a distinction between real property and personal property was developed over time.

In Canada – as opposed to the United States or continental Europe – the application of English law has inherited one of its fundamental concepts: the land itself is not owned. This is so because English law focused not on ownership of land but, rather, on possession of land. The result is that the land itself is not owned or otherwise subject to ownership. Instead the person who has the right to possession is entitled to exercise certain proprietary rights over the land. The only one thing that is subject to ownership is an “estate” in the land.

An “estate” is an abstract legal concept that can be best characterized as a “bundle of rights”. In other words, the owner of an estate has certain rights he can exercise over the land. These rights are limited in nature and are incapsulated at common law in the Doctrine of Estates. Estates still in existence today are the Fee Simple Estate, the Life Estate and the Life Estate Pur Autre Vie.

THE FEE SIMPLE ESTATE

The Fee Simple Estate is what we ordinarily think of as “ownership” of real property. A fee simple owner has more rights over the land than any other owner. Originally the word “fee” meant that the estate could be inherited and “simple” meant that there was no qualification on the type of heir that could inherit it. In practicality this meant that the owner could leave the fee to his heirs in a will. And in the absence of a will, the fee could go to whomever could prove he was the nearest heir to the deceased owner. A Fee Simple is also known as a freehold estate – that is held by a free tenant – and it can be held for an unlimited period of time. An interesting situation that applies to Fee Simple estates even today is that if the owner does not make a will and no heirs can be traced, then the property will “escheat” or revert back to the Crown much the same as in old times.

LIFE ESTATES AND LIFE ESTATES PUR AUTRE VIE

A Life Estate is an estate for the life of a person who is called the life tenant. Again it is a freehold estate, but for an uncertain period of time because it terminates upon the death of the life tenant. A Life Estate Pur Autre Vie, on the other hand, is a life estate not for the life of the life tenant but for the life of another person. This would occur in a situation wherein the owner leaves a life estate to the wife and, after his death and after becoming a life tenant the wife remarries and disposes of the property for the life of another person. Needless to say, situations such as these are very rare and are difficult – if not impossible – to sell for value.

In addition to the foregoing, there are bundles of rights that are less than Fee Simple and less than Life Estates. More specifically, there are three main classifications of interests in land that do not amount to estates: easements, restrictive covenants and profits a prendre.

[] Easements

An easement is, by definition, a privilege acquired by a landowner for the benefit of his land over the land of another. The land receiving the benefit is the dominant tenement, the land over which the right is exercised is the servient tenement. In order to be characterized as such, an easement must have three basic requirements: 1) there must be a dominant and a servient tenement; 2) the easement must accomodate the dominant tenement; 3) the easement must be capable of forming the subject matter of a grant.

Specifically as it relates to the third requirement, the easement must be capable of exact definition. In other words, one must be able to identify its boundaries, and the person granting the easement as well as the person receiving it must have the legal capacity to be grantor and grantee respectively. Whereas a life tenant can create an easement while he is alive, it cannot extend beyond his death. Typical examples of easements are rights of way, rights to light and rights of support like the ones found in elevated construction. Finally, the so called statutory rights of ways are those easements created by act of law and typically in favor of public utility companies.

[] Restrictive Covenants

A restrictive covenant imposes a restriction on the use of one person’s land and the restriction must be negative in nature. Again, there must be three requirements for a restrictive covenant to be characterized as such: 1) it must be negative in nature, for example by imposing a restriction on use; 2) the person who imposes the restriction must retain property which will itself be protected; 3) the burden of the restriction must have been intended by the parties to bind the land.

A “Building Scheme” is a special example of restrictive covenant attaching to two or more lots in a development plan. Often this type of restrictive covenant is used by a developer who is selling lots in a residential subdivision and wants to maintain uniformity in the use of the lots to protect their value. Like a restrictive covenant, a building scheme will be registered against the titles of the lots.

[] Profits a Prendre

A profit a prendre is the right to enter into another person’s land and legally take some profit of the soil, like minerals, trees, fish or game, for the use of the owner of the right. Unlike an easement, it does not need to accompany a dominant tenement and, in fact, may be held as a right per se. Furthermore, it does not need to be granted for a definite period of time. And,finally, a profit a prendre cannot be implied by law.

Luigi Frascati

Luigi Frascati is a Real Estate Agent based in Vancouver, British Columbia. He holds a Bachelor Degree in Economics and maintains a weblog entitled the Real Estate Chronicle at http://wwwrealestatechronicle.blogspot.com where you can find the full collection of his articles. Luigi is associated with the Sutton Group, the largest real estate organization in Canada, and is based with Sutton-Centre Realty in Burnaby, BC.

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At one time in my life I was buying 7-8 Houses a month, fixing them up and then reselling them. Then I got the bright Idea that if I can buy and sell 7-8 a month, I can buy and sell 80. This was a choice that eventually led me to bankruptcy. This has not been that long ago. Twice in my life I have made a lot of money and then took on a large growth spurt and got a large learning experience in business failure. The last one resulted in bankruptcy.

It is hard when things are going well to not be seduced by more is better. When you have something working for you, it is easy to become overconfident and start to think of multiplying it. As with most things in life, you want to be sure when you take on something, that you complete it. Pumping up the volume, puts you at risk of not having the structures and being set up to deliver on what you are committed to. You naturally encounter problems that were not present on a smaller scale.

It is hard when things are going well to not be seduced by more is better. I had to learn personally that pride goeth before the fall. The bottom line is that there are always good deals in Real Estate! I say measure your success one house at a time. Buy investor property, fix it up, resell it, rent, do a lease-option, but do it one house at a time.

Multiple Purchases?

One of the most common mistakes I see in business is where investors come into the business and think they need to do multiple houses at a time. Try this on: Try doubling the cost you think it will take to fix the property, doubling the time you think it will take to rehab the property and figure your holding costs doubled (insurance, mortgage payments, taxes, lights, gas, rehab cost).

Great deals in Real Estate don’t come in houses fixed and ready to sell. The great buys come from houses that need work. If you are just getting started, stick to cosmetic rehabs (paint and carpet), Don’t take on major rehabs. It will take time to develop rehab crew. The most successful people I see in Real Estate do one house at a time. Failures are great, if you look at them and ask what action was missing that would have made a difference?

Hard money lenders?

One pitfall is using very expensive money. For years I ran a business financed on money from Real Estate Investors who are called hard money lenders. They look at collateral and loan money based on receiving interest can be 18% or higher when you figure in the closing costs. When you get multiple properties in this condition, you will have interest payments that are going to be double and triple what conventional financing is in Real Estate.

Now combine this with the common lie we tell ourselves that we can repair the house and put it back on the market for sale or rent in a short time. Your overhead will rise because you will need a staff to manage and rehab everything. Can you see this is a recipe for disaster for everyone? Now if you are doing one house at a time, your overhead will probably stay very low, with very little staff. Therefore you have limited your expenditure of time, money and aggravation.

At one time, my overhead was in excess of $50,000.00 per month. I had to depend on other people to do everything, including checking the work. A hundred percent of the monies I was making went paying down my debts and I kept telling myself I would turn it around tomorrow. I found myself with houses that were not finished and houses being lost in foreclosure and for taxes. That left me a very motivated seller and bankruptcy was looming large. With my overhead still there, I attempted to wholesale deals. I decided I would no longer find, repair and resell homes. Instead I would find great buys and sell them to other investors.

Basically, I started my business over. It takes a great amount of time to cultivate a list of investors interested in buying deals. This business is built on the concept you can borrow you way out of debt, but it just does not work. You have family, friends, and business associates that may get hurt or destroyed. I’m not saying this to tell you a sad story, but rather in the hopes that by sharing it, someone else can avoid the pain of my mistakes. Take from this what you can learn for yourself. I am 53 years old and starting over. I now have the knowledge to build a business with the proper foundation. I teach Real Estate Investing class now that look for pitfalls and what is needed to do a successful deal one at a time.

My advice to you on handling real estate transactions is:

Use Title Companies

What can happen to you when you fail to get title insurance? We had a participant in one of our seminars, who purchased a house to fix it up. He invested over $40,000 into the home in both repairs and purchase price. When he went to refinance, he found out the person he purchased the house from was not in the chain of title. In other words, he did not have a clear title. Whenever you purchase a home, always close through a title company with title insurance on the property. Title insurance is protection that insures the borrower or lender that they get the property with marketable title. They will only insure the property for the purchase price or for the amount of the mortgage.

Use a reputable lender

Interview lenders. Go to Real Estate Investor Clubs to find out from other investors which companies are doing the best job. Are you at risk when you use a lender that wants to cross collateralize loans or wants personal guarantees? One lender I know will get one-two year mortgages and demand a right to lien all the properties you own to procure the loan you are getting. Just beware, if you are buying the property to fix up and resell, there are things that you don’t always plan on like: twice as much rehab cost as you planned for, longer marketing time than you initially thought, resulting in added holding costs, or maybe the market moves the wrong direction and you can’t sell the property, so you rent it.

Now one of your other properties or even your personal residence needs to be refinanced. You now have a lien showing against the property. Now what do you do? Think before you jump. If you have purchased the property right, you should be able to borrow money based on the equity of that property – not you’re home and other properties.

This same lender will ask for a personal guarantee signed by you, your wife and your partner. This personal guarantee allows his mortgage company to lien anything the partner and wife own. Not only that, but this particular lender demands that you use a Title Company he owns. Now when you want to sell another one of your houses and this same cross collateral loan will show up on any property you are selling. Now you are faced with using his title company or he won’t release his loan. Beware of putting yourself in a situation where you are using a person who controls the lending, title work, the appraiser and the Real Estate Company.

Do you think, if you had your title work placed with a company the Lender had ownership in, you might run into a problem getting the documents released or have a clean closing at the same title company? Why risk letting human emotions drive a stake into your deals? Keep an arms length distance within your dealings. If you are selling homes or wholesaling property, let the buyer find his own lender and make sure you get an independent title company. Make sure there is not a conflict of interest in the title company, mortgage company, and real estate company. Keep the integrity in the deal. I am sure there are title companies, real estate companies, and mortgage companies, where there is common ownership that run very good businesses and can separate the conflicts of interests and profit centers. However, to protect yourself, make sure you receive proper disclosure of common ownership. You can always look at the volume of business they are doing in each business and check with the state of Michigan Licensing Dept. for any complaints against the firm.

In the 25 years that Ralph Maupin (also known as Mark) has been working with real estate, he has purchased over 2,600 single family homes and many multi family properties. He is a member of commercial MLS at a national level including the Real Estate Land Institute.
http://www.megaeveningevent.com

House hunting can actually be an enjoyable experience if you take your time and do your homework. Really! In my years as a Realtor, Investor and just a plain old looker before that I discovered the following ways to make house hunting less stressful and more effective.

Key to it all is first deciding where you’d like to live, then making it your business to learn as much about schools, hospitals, grocery stores, shopping, medical facilities, recreational amenities and so on.

Once you’ve done that you’re ready to investigate about the crime rate. Is it a safe location, or do you need to be considering another location?

And as awkward as it may be to talk about, you want to assess the quality and character of the people who live in the area. Obviously, you can’t interview them, but you can get a fairly good sense of their character by the condition of their homes and from the activities you might observe.

For example, if your prospective neighbor has discarded auto parts, household appliances and other stuff in their front yard you might want to reconsider your choice. A poor location when you buy will definitely be a negative factor if and when you decide to resell the home at a later date.

But once you’ve zeroed in on a good location, you’re ready for the next step of finding your dream home. can start to think seriously about searching for your dream home. But instead of spinning your wheels by looking at houses randomly, you should determine what you really want in a house beforehand and be quided by those things in your search.

Make a list of things that are important to you. Do you want a single story house, or do you prefer two stories? Will 3 bedrooms and 2 baths do, or do you really need 4 bedrooms and 2 & 1/2 baths? Making a list will not only save you time, it will also be a big help to your Realtor in planning your viewings.

Next comes the biggie. Get pre-qualified for a mortgage loan before jumping in the car to tour houses. You need to know how much house can you afford, which most people don’t know.

Affordability is based upon income, credit status, interest rates, down payment, closing costs and the type of loan selected. By getting pre-qualified by a lending institution you will know what you can afford to spend, which will save you time by establishing the price range you should be looking in before you begin your house hunting tours.

Once armed with information about how much house you can afford you’re ready to begin looking at homes. Make notes after each viewing each property, because after 2 – 3 homes they’ll start running together and you won’t be able to remember the details of each one as you think you will.

Finally, you need your own Realtor; someone who is working for you and is looking out for your interests. When you call the Realtor on a “house for sale” sign you’re speaking to the seller’s agent, who represents the seller and will be looking after the seller’s interests.

Like I started out saying, house hunting can be an enjoyable experience when you take your time and do your homework, but when done wrong it can be a terribly stressful situation. Fun and easy, or difficult and stressful. You decide!

Lanard Perry, author of a real estate marketing system that shows Realtors how to average 1 or more listings a week. Visit him at Real Estate Marketing Talk for more marketing ideas.

1. View basements and garages as rooms and plan how you’re going to use the space; visualize how you’d like it to look and feel. Grouping like things together is one of the most basic organizing principles. So create “zones”; a gardening zone, a camping zone, a recycling zone, etc. This makes for a logical system. PS: always label!

2. Make sure all your equipment is clean and maintained before storing. Mud or dirt can cause rust, mildew or deterioration. PS: donate or throw away before you store; why make room for items that need replacement?

3. Your storage area should be dry and ventilated. Wrap items. appropriately. Lawn furniture cushions should be thoroughly dry before storing and then placed loosely in a nylon bag or plastic storage bin to keep them dust free.

4. Don’t keep anything directly on a basement floor in case of water damage. Cement blocks with wood pieces create instant shelves. Better yet, use clear plastic bins. You can see what’s inside and the bins protect from water damage. PS: remember to label them!

5. Turn a plastic wading pool into a holding bin for inflatable toys, beach totes, swim goggles, and other seasonal accessories.

6. Don’t forget valuable wall space. Hang pegboards and hooks, add shelving, and put a sturdy utility shelf unit (metal or plastic is better than wood) in an empty closet. PS: Lowe’s sells one I love: it’s made by Plano and costs about $20+-.

7. Place gardening toolsrakes, shovels, hoes, etc.inside a sturdy trash barrel with wheels. Hang small tools around the rim. When it’s time to garden just roll the can to wherever you want to work. PS: trash barrels are also great for hockey sticks, bats, balls, etc.

8. Store the lawn mower in a ventilated area, away from flammable items. PS: get the leaf blower and snow blower serviced and ready for fall and winter.

9. Drawers from old furniture and empty luggage are great for storing. The luggage is going to be sitting there anyway; why not put it to good use?

10. If you still need more room, consider a storage shed behind your home. PS: make sure it can be locked and is thoroughly protected from the elements.

Disorganization takes up so much space! Organize all your clutter and you’ll be amazed how much more stuff you can fit! And imagine actually parking your car in the garage! By the way, all those trips to the beach and taking the dog to the park have taken their toll on the car. Clean the upholstery, floor mats, and car seats. The car will look great and have a new home!

Rosemary Chieppo has been a professional organizer, writer and public speaker since 1999. The costs of not being organized are enormous: time, money and stress. Organizing is the greatest gift people can give themselves; it clears the path to life’s more important destinations! Visit Rosemary’s website at http://www.borntoorganize.com.