What “Bundle of Rights” Do You Have When You Purchase Real Estate?
Property rights are protected by the constitution but are also subject to statutory codes determined by individual states in which the property is located. Even with ownership, your bundle of rights come with exceptions and obligations.
The Right of Possession
Buying a parcel of land gives you the right to take possession of everything contained within the perimeters of the plot. However, if you still owe money on a mortgage, you don’t have legal ownership of the full title until the loan is paid off in its entirety.
The Right of Control
Also called the ‘right of use’, once you take possession of a title, you have the right to use the property as you see fit providing the activity is not illegal. Homeowner associations, however, can enforce restrictions such as banning pets or limiting the amount of fruit and vegetables grown on the property.
The Right of Exclusion
When you purchase real estate, you have the right to choose who you allow on to the property and who to exclude. Individuals that enter your parcel of land without permission can be prosecuted for trespassing. If you’re a landlord renting property to tenants that you want to be removed, you may have the right to evict them. However, there must be just cause to evict a tenant. Again, there are exceptions to the rule. Statutory laws can override your right to exclusion for health and safety reasons. For example, utility companies have the right to enter a property to access power cables and pipelines. Law enforcement officers, however, need a court warrant to enter and search a property.
The Right to Profit or Enjoyment
Real estate owners have the right to derive an income from the property. Leasing the property to a third party is the obvious option, but even this is not possible in every state. There are also limitations on the use of land for monetary gain if the health and safety of the public are at risk, or a breach of the peace impedes the “right to enjoyment” of your neighbours.
The Right of Disposition
Titleholders have the right to transfer ownership to a third party – either permanently or temporarily. However, you are only entitled to the right of deposition if the property is owned outright and no money is owed on the property. That doesn’t mean you are not entitled to move home, but before you are entitled to transfer the title deeds, the outstanding loan must be settled in full before the title deeds can be transferred.
Before you invest in any real estate in the United States, check the laws and regulations to determine what rights you have in the state you intend to purchase the property
