What Property Rights Do You Have When You Own Real Estate?
When you purchase a home or vacant lot, you’ll have a lot of new responsibilities. There’s house insurance, moving expenses and simply settling in with that exciting feeling of making such a major purchase. However, an important factor of owning real estate that is often overlooked is property rights and what they mean for the owner. Knowing which elements of your home are recognized as real property can be extremely helpful, whether you are considering moving to a new home or dealing with neighborhood issues.
What Are Property Rights?
Property rights refer to what an owner can do with property they own. The concept of ownership is both philosophical and practical, which means that the rights it bestows and the limits on those rights are interpreted by courts. Private property rights are not absolute, and homeowners need to be aware of their limits. Remember that businesses, governments and individuals can all own property.
What Does Ownership Mean?
Property ownership has been essential throughout history. Today, local governments carefully record property ownership because it’s how local taxes are determined. Since private property rights are determined through your house title and deed, let’s review what both terms mean.
The term “title” can be slightly misleading, as it’s not a physical document like a car title. House title is a representative concept of all the legal rights for ownership for residential property. House title can be seen as a “bundle of rights” that comes with being a property owner.
Unlike the house title, a house deed is a legal document that explicitly defines the property and its property lines. It also serves as the transfer of the property ownership from a seller to a buyer.
The Five Private Property Rights
When you own real estate, you are bestowed private property rights. Tenants who rent properties or apartments have tenant rights, but not property rights. Property rights are sometimes referred to as a bundle of rights, so let’s discuss the five main rights for property owners.
The Right Of Possession
The right of possession is your right to own your property. As the titleholder, you are the legal owner of the property and are responsible for it. Keep in mind that if you have a mortgage, your lender has a lien on your property until the mortgage is paid off. Homeowners who are current on their mortgage payments have the right to possess the property but the homeowner who is in default loses the superior claim. If this is the case, the lender can take possession through foreclosure.
The Right Of Control
The right of control is your right to control the use of your property. However, it must be legal according to local laws. The right of control can include renovations, decorating your home or add an outdoor fireplace gazebo if there are no ordinances against it. HOAs often have regulations that can compete with a homeowner’s right of control.
The Right Of Exclusion
The right of exclusion is your right to determine who can enter your property and who can’t. While this may sound simple, easements (a legal right to use another individual's property) and judicial warrants (such as involving a police officer) override the property owner’s right of exclusion.
The Right Of Enjoyment
Like the right of control, the right of enjoyment is your right to do as you please while on your property, as long as it's not against the law. With the right of enjoyment, you can throw birthday parties, play instruments and more.
The Right Of Disposition
The right of disposition is your right to sell, will or transfer the ownership of your property. If you still owe a lender on a mortgage, you must pay off the balance on your loan with the proceeds from the sale.
Limits On Property Rights
Having property rights does not give homeowners complete reign over their property. Often, disputes can happen between neighbors when one property owner does something that disturbs nearby property owners or the community at large. Let’s go over common restrictions on property rights include zoning, local governments and state laws and ordinances.
Encumbrances on property occurs when a claim is made against a property by someone who is not the property owner. These claims typically are made when a structure is built on more than one property.
Property liens are legal claims that allow creditors to secure a payment that is owed to them, with the most common lien being one related to home mortgages. In fact, all homeowners who use a mortgage to purchase home will have a mortgage lien on their property. Other liens can include a tax lien or a mechanic’s lien.
Easements are something that potential home buyers should be aware of when looking on the house market. An easement allows another party to access a property without express permission from the property owner through a grant of a nonpossessory property interest. They can limit a property owner’s activities on their own property, as some easements can prevent property owners from adding certain developments to the property.
Encroachments can cause disputes between neighbors An encroachment is when a neighbor unrightfully develops onto their neighbor’s property. Examples include landscaping or outbuildings that cross property lines. This can be intentional or not, but either way it can cause a nuisance. Encroachments can cause liability issues and potential damage to a property.
Claim Of Rights
Believe it or not, trespassers can claim property rights for property that they don’t own through something called adverse possession. While the legality of adverse possession can be tricky, homeowners can prevent adverse possession. A couple examples of how to prevent this include clearly marking boundary lines and providing written permission of use to people using their property.
The Bill of Rights provides protection for individual liberty from actions by government officials, except in the case of eminent domain. The government retains some right over your land but through the Fifth Amendment, the government can only use the power of eminent domain if just compensation can be provided to property owner.
Eminent domain is a process of the federal, state or local government taking 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.
If a property owner has a home located within a homeowners (HOA) or condo (COA) association, the owner must follow its rules or face penalties. This can place limitations on what homeowners within the association can do on or with their property. For example, some HOAs have rules about what types of plants can be used in a front yard or what color paint you can use on the home’s exterior.
Failure to pay HOA fees or penalties imposed on a breach of association rules can lead the HOA to place a lien on a property.
In addition to the limitations listed above, laws on an assortment of levels are another form of encumbrance on what private property owners can or can’t do.
State And Local Laws
Both state and local laws can prohibit an activity if it’s deemed a health or safety hazard. For example, hydraulic fracturing was banned in the state of New York due to concerns with health and safety of its residents.
Zoning rules and regulations also place limits on the things property owners can do on their private property as well as how the property can be developed. Zoning laws are specific regulations for land that is divided into zones by a municipality or the government.
These laws can specifically list which types of properties can be located next to each other in different areas of a city or municipalities. If an area is in a zoning district, there will be regulations for how a property owner can use their land within the zoning district.
How Can I Enforce My Property Rights?
With all these limitations on a homeowner’s property rights, there are still ways that property owners can have control over their property and what takes place on it.
Hiring an attorney is an important preventative action that homeowners can take and, if needed, bring a lawsuit. While this can be expensive and the results can depend heavily on the laws of the state, this can be tremendous help with navigating the confusing laws and dealing with any potential issues.
Title insurance is essential to prevent potential legal issues if a title search failed to identify a potential claim against the property. Through a title insurance policy, a homeowner might have recourse.
If the problem involves a dispute with a neighbor over their use of the property, homeowners may be able to report violations to their town’s code enforcement officer. This officer is often employed by a county or a city and is in charge that people are following local laws.
Should I Move Into A New Home?
Unfortunately, property rights issues can cause major issues for owners. In some cases, the best solution is to simply move into a new home. Of course, finding a new home and moving is not an easy undertaking and should not be decided lightly. However, walking away from a dispute might be the healthiest way to deal with a long-running dispute if other solutions have been worn out.
It's important to note that in some states, sellers may be required to disclose a neighborhood nuisance and, if asked, must answer truthfully in all states.
The Bottom Line: Property Rights Are Broad But There Are Limits
Private property rights are important in our society and are an essential part of the allure of owning real estate. Property owners typically have several rights, including the right of possession, control, exclusion, enjoyment and disposition. Protecting your rights as a homeowner allows you to enjoy and control your property.
But there are limits to these properties that can cause potential issues. Fortunately, there are things that property owners can utilize that are designed to resolve conflicts between individuals and communities when they arise.
Looking to become a property owner soon? You can apply online now and start looking for your next home.