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Property Rights: An Overview

6-Minute Read
Published on November 27, 2020
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Knowing which elements of your home are legally recognized as real property will help you understand what property rights you have to the natural and man-made resources around you.

It's important to understand property rights because they show you how to navigate ownership of many types of resources.

This article will review a wide variety of private property rights as a homeowner but will offer up some cautions with regard to these types of rights as well.

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Property Rights Definition

What are property rights, anyway?

Here's a quick property rights definition: Property rights allow for homeowners or property owners to have the legal decision to control what happens in their home and on their land. Individuals, businesses and governments can all have property rights.

Private Property Rights

Private property rights are established through your house title and deed. Let's go over what each of these mean:

  • House title: Your house title isn’t a physical document. Instead, it's a concept that indicates ownership rights over a property. There are eight common ways to hold title. For example, tenancy by the entirety is reserved solely for married couples, and views that couple as a single legal entity with shared and undivided property rights.
  • Deed: A house deed is the physical document that defines the property and states that you own it. Your title and your deed legally define your ownership, protecting your property rights.

You may not have property rights as a renter but you do have tenant rights. These tend to be defined on state and local levels, but the basic ones include needing notice before eviction, your right to your security deposit and your right to a habitable home.

Inheriting a property means you inherit the rights to it as well as the taxes on the home.

What Are My Property Rights?

There are five main rights or legal privileges for property owners, often referred to as your bundle of rights. These rights are only held in the confines of the law. For example, if your home is zoned as residential, you may not be able to operate a business out of it. Similarly, if your city has a law against structures of a certain height, you may not be allowed to build a third floor onto your home.

Let’s go through each of these rights below.

The Right Of Possession

The right of possession means that you own your asset and that it's your responsibility. The right of possession means that you are the titleholder and the legal owner of the property. If you have a mortgage, your lender has a lien on your property until the mortgage is paid off. If you fail to pay your mortgage (and possibly taxes or HOA fees) you could lose possession of your property.

The Right Of Control

As long as you're doing legal things on your property, you can do whatever you want with it. If you want to put a gazebo in your backyard, you can (as long as there's no ordinance against it). In other words, you can control what happens in your house and on the surrounding land.

The Right Of Exclusion

The right of exclusion allows you to keep unwelcome parties off your property. For example, if a neighbor enters your yard and you don't want them to be on your property, you can legally have them get off your property. However, both easements (a legal right to use another individual's property) and judicial warrants (such as involving a police officer) trump the property owner’s right of exclusion.

It's worth noting that failing to exclude frequent trespassers could result in an encumbrance or adverse possession of your property.

The Right Of Enjoyment

The right of enjoyment allows you to do what you like while on your property (again, as long as it's not against the law). You can throw parties, sunbathe, landscape your yard – it’s your property to enjoy.

The Right Of Disposition

The right of disposition means you have the right to sell or gift your property. If you still owe a lender, you must pay off the balance on your loan.

Why Are Property Rights Important?

Property rights are important because they allow for a clear understanding of land ownership and are a contribution to economic development. As a homeowner, you can protect your property in several ways. You can:

  • Put up a fence to denote property lines
  • Post signs to keep intruders off the property
  • Monitor your property usage
  • Pay your bills to avoid foreclosure
  • Check your state's laws regarding property rights
  • Check the legal boundaries of your property by having it surveyed
  • Consider adding alarm systems to your property

The more property you own, the harder it may be to protect your property rights because you may not be able to monitor every acre of your property all the time. However, if you’re living on a plot in a subdivision, you may not need to do much to protect your property. Your subdivision may even have built-in security.

Let's also draw your attention to paying your bills. You will lose your property rights if you don’t pay your bills. You could experience foreclosure (when your lender takes away your home) or a lien on your property.

If you start to slip on your payments, contact your lender or utility company. They want to help you get back on track.

Restrictions On Property Rights

You may experience some restrictions regarding property rights. Some common exceptions to restrictions on property rights include zoning, local governments and state laws and ordinances.

Property Tax Liens

Property tax liens resulting from not paying property taxes could affect your property rights. When you fail to pay your taxes, the government can place a lien on your property for the amount of tax you owe. Your local government or the IRS may allow you to repay back taxes. However, remember that people have lost their homes over a few hundred dollars they owe to their state or local government.

Other Liens

Some other liens may affect your property rights:

  • Mortgage lien: If you don’t pay your mortgage, you risk eviction and foreclosure. This lien is paid off when you finish paying your mortgage or when you sell the property.
  • Mechanics or construction lien: Another type of lien that can limit your property rights is a mechanics or construction lien. These liens come into play when you fail to pay someone for a service involving the repair or construction of your property. You won’t be able to sell your property until you pay the lien.
  • Judgment lien: A judgment lien is a lien through a lawsuit, which can occur when a judge determines you owe the plaintiff money. If the money isn’t paid, the plaintiff can place a lien on your property.

Easements

Easements could also affect your property rights through three ways, including an easement appurtenant, easement in gross and easement by prescription.

  • Easements appurtenant: Easements appurtenant are tied to the property and stay with it when the property is sold. For example, an easement may have to occur over a stretch of the neighbor’s driveway so a landlocked homeowner can access the road.
  • Easement in gross: An easement in gross is tied to a person or entity. In this situation, the utility company may have access to their equipment on your land. Easements to utility companies or the government are unavoidable and don’t detract from your property value.
  • Easement by prescription: An easement by prescription, also called a prescriptive easement, is an easement that’s granted when someone uses your property without your permission for a period of time determined by your state. Here's an example: If your neighbor built a fence into your property without permission but you don’t contest it, they could get a prescriptive easement if it stays up long enough.

Adverse Possession

You may have heard of adverse possession as "squatter rights." In this case, someone uses your property openly, continually and without permission. In some states, the possessor must provide proof of paying property taxes to qualify for adverse possession.

It's possible that it could affect your property rights, however. Let's say you own a piece of land with a home that's collapsing on it. If a squatter moves in and the case moves through the court system, the courts may vote in favor of a squatter who has tried to make improvements.

Eminent Domain

The Bill of Rights provides protection for individual liberty from actions by government officials, except in the case of eminent domain.

Eminent domain refers to an allocation of private property by force for a public purpose by federal, state or local government. This occurs with proper compensation but without the owner's consent. Homeowners’ rights regarding eminent domain are protected by the Fifth Amendment.

The Bottom Line On Your Homeowner Rights

Homeowners rights, also called property rights, allow for homeowners or property owners to control what happens in their home and on their land. Individuals, businesses and governments can all have exclusive right to do what they want (as long as it's legal).

You typically have several rights if they aren't restricted, including the right of possession, control, exclusion, enjoyment and disposition.

Protecting your rights as a homeowner allows you to enjoy and control your property. Visit the Rocket Mortgage Learning Center for more tips and information on being an informed homeowner.

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Melissa Brock

The Quicken Loans blog is here to bring you all you need to know about buying, selling and making the most of your home. Whether you’re thinking about becoming a homeowner, selling your current home or looking to keep your place in tip-top shape, our writers and freelancers bring their experience and expertise to meet you right where you are.