Ch 1 : Characteristics Of Property And Value

Privately owned real property in most states is subject to real estate taxation. This means that individuals or organizations who own real property, such as churches, schools, and non-profit organizations, are usually required to pay taxes on their properties. Therefore, all of the options mentioned (churches, schools, and non-profit organizations) are exempt from real estate taxation.

According to the USPAP (Uniform Standards of Professional Appraisal Practice), the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale is known as market value. This term represents the estimated worth of a property based on factors such as its location, condition, and current market conditions. It is the value that a knowledgeable buyer would be willing to pay and a knowledgeable seller would be willing to accept in an arm's length transaction. Marketability refers to the ease of selling a property, market price refers to the actual price at which a property is sold, and market stability refers to the consistency of market conditions.

Intellectual property is a broad term that encompasses the legal rights associated with intangible assets such as information, ideas, and creative works. It includes copyrights, trademarks, patents, and trade secrets. These rights protect the exclusive ownership and control of these intangible assets, allowing the creators or owners to benefit financially from their creations and prevent others from using or copying them without permission. Industrial property refers specifically to intellectual property rights related to industrial inventions and designs. Chattel fixtures and personal property are not directly related to the concept of legal rights for intangible assets.

The correct answer is "there is no payment involved in condemnation under police power." This is because condemnation through the exercise of eminent domain involves the government taking private property for public use, but the property owner is entitled to fair compensation. On the other hand, condemnation under police power allows the government to regulate or restrict property rights without providing compensation to the owner.

This answer is correct because it includes all the factors that are commonly used to measure the value of real property. Demand refers to the level of interest or desire for the property, utility refers to its usefulness or functionality, scarcity refers to the limited availability of similar properties, and transferability refers to the ease with which ownership rights can be transferred. These four factors are widely recognized as important considerations in determining the value of real property.

The correct answer is "anything capable of being owned and gained lawfully." This definition encompasses all types of property, including real estate, real property, and personal property. It emphasizes that property is not limited to physical objects, but can also include intangible assets such as intellectual property. Additionally, the mention of being owned and gained lawfully highlights the legal aspect of property ownership, indicating that ownership rights must be acquired through legal means.

Airspace is considered real property because it refers to the physical space above a piece of land, including the airspace necessary for the use and enjoyment of the land. It is a valuable asset that can be owned, leased, or sold separately from the land itself. This includes the right to build structures, install utilities, and control the use of the airspace. Cut timber, trade fixtures, and jewelry are not considered real property as they are either personal property or temporary attachments to real property.

In appraisal agreements, investment value refers to the value of a property to an individual. It is distinct from market value, which is the value of a property in the open market. Investment value takes into account the specific needs and preferences of a particular individual, such as their financial goals and risk tolerance. Therefore, the correct answer is individual.

An arm's-length transaction refers to a sale where the parties involved act independently and in their own self-interest. This means that they make decisions based on what is most beneficial for themselves, without any external influence or pressure. It implies that there are no special relationships or conflicts of interest between the buyer and seller, ensuring a fair and unbiased transaction. Therefore, the correct answer is "in which all involved parties act in their own self-interest."

The scenario described in the question highlights the intention of the tenant, Bob, to reinstall the old fixture when he moves out. This demonstrates that Bob has the intention of removing the current fixture and replacing it with the old one, which is one of the tests of a fixture.

The question is asking for the test of a fixture that is not included in the given options. The tests of a fixture typically include the method of attachment, adaptability of the item, and relationship of the parties involved. However, the time of attachment is not considered as one of the tests of a fixture.

When there is a conflict between a public (governmental) restriction on a property and a private deed restriction, the one that must be adhered to is the one that is most restrictive. This means that if the public restriction imposes more limitations or regulations than the private deed restriction, the public restriction takes precedence and must be followed. This is because the government has the authority to enact laws and regulations that serve the public interest and can override private agreements or restrictions.

An appraiser's value is not a fact, but rather a qualified opinion. Appraisers use their expertise, knowledge, and analysis of relevant data to determine the value of a property or asset. While they rely on factual information such as market trends, comparable sales, and property characteristics, the final value is still subjective and based on the appraiser's judgment. Different appraisers may arrive at slightly different values, highlighting the subjective nature of the appraisal process. Therefore, the value assigned by an appraiser is considered a qualified opinion rather than an absolute fact.

The correct answer is "it is a fact, whether it is publicly disclosed or retained in private." This means that the price of a property is a factual piece of information, regardless of whether it is made known to the public or kept private. The price remains the same and does not change based on its disclosure or non-disclosure.

The ultimate test of functional utility is marketability. While design, utility, and maintenance costs are important factors in determining the functionality of a product, marketability is the ultimate test because it assesses whether the product can be successfully sold and accepted by consumers in the market. A product may have a great design, high utility, and low maintenance costs, but if it is not marketable, it will not be successful in the market. Marketability encompasses factors such as demand, competition, pricing, and consumer preferences, which ultimately determine the success or failure of a product in the market.