Blog Assignment #2

Blog Assignment #2


Task #1


Real estate defined by American terms is imply a designated piece of land and the improvements that's made to this piece of land. Basically, these improvements can consist of all sorts of items but they are categorized as improvements when they are reasonably permanently affixed to the land. By reasonably permanently affixed to the land, one can test for fixture status of the chattel. The test is in three steps:

1. A test of intent. Is there an intent from one of the parties in the RE agreement.
2. A test of attachment where you look at if the item can be removed  without injury to the real estate.
3. A test of adaptability where you look at how the real estate would be if the affixture wasn't there.

Thus, real estate is tangible and immobile and consist of what's permanently attached to the piece of land. This is to be compared to real property that is the rights that are attached to the ownership of a real estate. Real property is therefore a bundle of right's that one achieve when you acquire real estate that you can choose to use, sell, lease etc. if you want to.


To look at the rights of properties, I have found this little clip that explains property rights in a rather peculiar way. The power of property rights are explained through the common ownership of surf waves where there are specific rules according to who's on the wave first and how many that can be on one wave. The video is self-explanatory, and you can take a look at it right here: https://www.youtube.com/watch?v=jnjPFZV8Wqo


Task #2


There are some restriction on the ownership on land that can be enforced. These can be either private or public. This is a description on what private restrictions on ownership is as well as some examples to back it up.


Private restrictions are limitations that run with the piece of land that you own. These private encumbrances can be either financial (e.g. liens) and/or non-financial (e.g easements).

• Covenants, conditions and restrictions: These are restrictions that are explicit in the deed of the real estate. This could be that one can't sell alcohol on the property.
• Lien: This is a financial claim on the property for the debt in the real estate. These can be voluntary (e.g. a mortgage payment) as well as in-voluntary if the owner of the real property has for example unpaid taxes.
• Easement: An easement is a right given by the owner of real estate for another to use the piece of land in a specific way. These can be appurtenant easements where there's a dominant and estate and burdened estate (e.g a drive way passing one real estate to get to the one behind) and/or easement in gross where there are only servient estates (e.g. high power lines)
• Adverse possession: This allows individuals to acquire real estate even though they do not own it but because they have openly possessed it for a statuary period of time.

There are several private encumbrances that restrict how you can use you property. The example I'd like to give is a trend that's risen after the financial crisis in 2008 where more and more people defaulted on their mortgages resulting in empty houses. So called squatters go in and live there for a statuary period of time and if they openly declare that no one should trespass they can declare the legal right of 'adverse possession'. Thus, this man has been living in a multi-million dollar home for the last seven months - doing so without paying a dime. Follow the URL for the whole story:


https://www.youtube.com/watch?v=bOiUE0Yo2t4


Task #3


As mentioned in task #2, restrictions can not only be private but there can also be public restrictions that limit the usage of your property. The government powers are generally split in four and elaborated upon underneath:

• Taxation: The government can impose an ad valorem tax on your property. Thus, if you are the owner of the property then you are liable to pay the state property tax.
• Eminent domain: The government can also acquire you property for the public use of your real estate. This could be if it's beneficiary for the community e.g. there's a highway that's being built through your real estate. The owner of real estate can file for compensation of the government buying him out of the house (just compensations). Also, if and adjacent property feels like his/her property has lost value after the eminent domain they can file for inverse condemnation.
• Police Power: This restriction enables the government to be able to regulate if there dangers to the health and general welfare of the public nearby.
• Escheat: Escheat enables the government in case of the death of a person with no close relative to cease the real estate. The power of the property thereby falls to the state/crown.

There are several more ways the government can restrict ownership of private property, including takings etc. However these are some examples of how restrictions can apply to our real estates. In later years in America, we have experienced an increase in the government's use of eminent domain hereby taking people's homes and compensating them with what's fair value. This article from CBS illustrates how people fight back on the government wanting to tear down a 100 year old neighborhood to make brand new condominiums. The fight is still going on and as of now, the couple in the article living just outside of Cleveland can stay where they are.. for now.


For the article, follow: http://www.cbsnews.com/news/eminent-domain-being-abused/

Task #2 - Inspiring piece of real estate

Task #2


Howdy,


I'd like to start this blog off with some interesting articles of the real estate market in Denmark. Real estate can be a lot of things - residential, industrial etc. Denmark has been widely recognized for it's position in architecture especially with regards to public buildings as well as innovative measures in public transportation. Let me give you an example of he latter and will return to the public buildings soon.


Automobile rides in Copenhagen is very expensive. The Danish government excise a 180% car-tax resulting in some of the most expensive cars in the world (e.g. a small Smart-car can be as much as $20.000). Also, pricy gas gives incentive for many people to ride their bicycles regularly. This has driven the council of Copenhagen to invest in a 35 million kroner ($7 mill) elevated bicycle lane for bikers to commute swiftly through Copenhagen. This article is in Danish (http://politiken.dk/indland/ECE2327966/et-aar-forsinket-endelig-faar-koebenhavnerne-cykelslangen/) but I will highlight the main points here:


The bicycle lane is called the Snake Bridge from the orange looked lane and the way it's curling through the canals in inner Copenhagen. The bridge has been on it's way for several years and is the first of it's kind in the world expected to help 10.000 travelers commute to inner Copenhagen every day.


I really like how the Danish government facilitate the use of environmental friendly transportation in a different but still esthetic way. I believe Denmark has many types of interesting pieces of real estate but this one stands out to me the most because it's not only beautiful real estate but it's useful at the same time.


 Pictures can be found using the link provided in the 2nd section of this post since I'm having difficulties posting pictures in the posts itself.

Introduction

Howdy!


This blog will contain updates of the knowledge that I acquire while I'm studying aboard at Texas A&M University. As a finance major, I'm taking a course of decision making in American Real Estate whilst in America and will therefore use this blog to highlight what I like about real estate coming from Denmark and how that in many was is the same and/or is different from real estate in America. First, let me briefly introduce myself so you know what I'm about.




My name is Peter Pudselykke and as pointed out before I'm a foreign exchange student taking this fall semester of my senior year at Mays Business School, Texas A&M. I'm a finance major originally from a smaller town 40 miles outside Copenhagen, the capitol of Denmark but I'm taking my bachelor degree at Copenhagen Business School (which by the way is ranked 3rd in business schools of 1000 schools in the world behind the business program in Harvard and London Business School http://www.cbs.dk/node/236991). I'm taking this course (FINC 371) since Copenhagen Business School doesn't offer electives in real estate and because I think real estate is interesting and difficult especially after the credit- and liquidity crisis in the last decade. My goals for this class is to get a basic understanding on what drives real estate in American and pair that with the basic understanding I have coming from Denmark and the real estate market in my home country. So I'm really looking forward for this class.




Coming from Denmark, it's a bit unusual that I have been playing football for the last 6 years of my life (since people in general play soccer). Of European standards I was doing fairly well e.g. I spend some years on the Danish national team competing in the Scandinavian as well as the European Championships. Football is my main hoppy, so I suppose America is the right place to go aboard to (especially in Texas). I watched my first collegiate game at Kyle field Saturday 6th so it was a pleasure to see A&M BTHO Lamar! I'm already looking forward to next game!




This kind of sums up a small introduction about myself. I will regularly post updates regarding my financial class of real estate with emphasis on the differences between America and Denmark as mentioned in the prophase.