The Real Estate Bundle Of Rights Explained

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When looking to buy, sell or learn about real estate, you must understand some terms that people will use together with real estate. One of these terms is known as the bundle of rights.

A bundle of rights is your right as a property owner. It is all the different rights you have to your property as the rightful and outright owner. It is essential to understand these rights and understand if you have full access to all your rights or if there may be HOA or local laws that may put exceptions onto your bundle of rights.

Real Estate Bundle Of Rights Explained

The term bundle of rights is a legal term to describe a set of legal rights associated with actual property ownership.

Real property is defined as the home you purchased and the rights and ownership you have to that home and the property. Real property is also the land and any structures attached to the land that will be factored in for the property value.

For example, if you buy a home that has a basketball hoop attached to the house, that basketball hoop would become part of your real property. Even though the basketball hoop with not increase the value of the home but since it is fixed to the house, it becomes part of the home or part of your real property when you purchase the home.

So the bundle of rights is all the rights that you have as a property owner to the land and the home and everything that is fixed to the house and considered part of the property or property of the home and land.

There are five basic bundles of rights, and each of them is described below:

Real Estate – Right of Possession

The first right under the bundle of rights is the right of possession. The right of possession is what it says. It refers to the right for you to possess or own the property. But this is as long as you are the rightful titleholder and you are the legal owner of the property.

If a property has two co-owners, both owners also have the right to possession. This is important to understand, especially if you own a property with a spouse and get a divorce; house ownership can sometimes be complex and multi-faceted.

One party cannot legally sell the home without the consent of the other party or co-owner. Both parties have legal rights to the house.

This is also why sometimes when there is divorce or a breakup in a relationship among co-owners, the bundle of rights or the right of possession can get very complicated and messy.

Real Estate – Right of Use

The Right of Use sometimes also refers to the right of control. This is the right for you to use or control the property. This could include making reservations or changing the property, having guests to visit or live with you, and renting your property to another individual.

If you happen to live in a community with a homeowners association or an HOA (Home Owners Association), the HOA regulations can limit your rights. For example, the HOA could stipulate that no one living in the community can own a pet.

Or the HOA can tell you that you cannot paint your house with specific colors. These things can be against HOA rules and take away some of your rights as an owner.

Also, local laws could impact your rights or your right to control. Depending on your neighborhood, for example, you may not be able to run a specific type of business out of your home, keep a coop of chickens in your backyard, or have other animals in your backyard.

These local laws could infringe upon your right to use or right of control over your property.

Real Estate – Right of Quiet Enjoyment

The right of quiet enjoyment can also be sometimes known as the right of enjoyment. The right of enjoyment gives you the right to enjoy your property how you see fit lawfully. For example, you can throw a party at your house if it doesn’t break any local noise or other ordinances.

With HOA rules or other laws, the rate of quiet enjoyment can also be infringed upon. Some communities may have restrictions as to where your guests can park on the street or how they can park, or if you can even have a party. The HOA or local laws may have rules as to what time would be considered a quiet time.

Real Estate – Right of Exclusion

The right of exclusion gives you the freedom to decide who can or cannot step foot on your property. If a police officer wants to search your house, they need to show you a warrant. But the police officer cannot just enter your home without a warrant and the proper legal documents; you have the right to tell them “NO” if they do not have this.

You also have the right to decide who can come onto your property. If you don’t want to have a specific person come onto your property, you have this right to tell them to leave or call the police.

Real Estate – Right of Disposition

The right of disposition is also known as the right to dispose of your property. If you are the legal owner of your property, you have the right to sell it or to transfer ownership to someone else.

This right to disposition can get complicated if you have a lien on the property. When you sell a house with a mortgage lien on it, you have to pay off the remaining balance when the proceeds from the sale go through.

This right of disposition can get complicated, especially if you purchase a house at a very high price and then the housing market drops down, and you want to sell the house at a loss. You will need to pay off the bank any money you owe before selling the home or getting rid of the property.

The Importance Of The Real Estate Bundle Of Rights

It is essential for all house owners and real estate agents, and anyone working in real estate to understand ownership and the bundle of rights. The bundle of rights will determine what you can or cannot do with your property.

Depending on your situation and the property you have purchased, your bundle of rights could also have some limits, primarily through an HOA Association or local laws.

It is vital that property owners fully understand the rights they have that go together with their properties; they need to understand if their rights have been infringed upon and so that you will not infringe upon other people’s rights.

When you co-owner a house with somebody such as a spouse, you share ownership. This means that you cannot make unilateral decisions about what happens with the property without the co-owners permission. Both owners need to agree to the sale or the changes to the property as they both have legal rights.

The battle of rights is important because it defines your rights when buying a property. It also means that for any property you purchase, you must do your due diligence and understand precisely what is included with your bundle of rights and if there are any exceptions to those bundles of rights.

The bundle of rights is an important aspect to understand when you buy, sell, or consider owning a property.

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