The Whole Enchilada? Know What’s in Your “Bundle of Rights” When You Buy a Home

Image of enchiladas on a plate.

The privileges you get as a homeowner are, in a famous legal metaphor, your bundle of rights. Why the metaphor makers didn’t choose an enchilada is anyone’s guess. It certainly would have spiced up law school courses.

In any case, what’s in a real estate deed matters. If your bundle is missing a few sticks, so to speak, you might not get to use your property as planned. You could need to negotiate or compromise with another party. You might learn that someone else has a conflicting interest and possibly always will.

Ideally, the buyer of a home with a clear title receives complete ownership and the prerogative to use it as desired. In reality, things get complicated. Here are six of the most significant rights you can have:

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EHomes, Smart Houses, Solar Housing Communities: What’s Going On?

Image of solar panels facing a bright blue sky with some fluffy white clouds floating by.

What will make land developments competitive in the years ahead? Several new concepts are taking shape: a shift to electric vehicles, solar roofs, technology for home-based productivity, and personal amenities that support an integrated sense of well-being.

Builders are now choosing internet-connected heating and cooling. Buyers are touring homes with sensors and voice control technologies to turn the lights and entertainment systems on and off. And, especially since the pandemic, we’re seeing in-home fitness equipment that keeps track of our exercise and health data, allows us to take virtual hikes any place in the world, and even connects us virtually with live coaches.

Some of the most intriguing innovations involve housing — and entire developments — becoming energy producers. Let’s take a closer look at some trendsetters at work.

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Can a Homeowner Get Around a Deed Restriction?

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As a traditional rule of law, other people shouldn’t be able to restrict our enjoyment and use of our property. This is why the rule against perpetuities prevented people from using deeds to control their properties after their deaths. According to this traditional rule, future generations should not have to live with contingencies placed on them by someone else’s “dead hand.”

It’s part of a broader principle: the rule against unreasonable restraints on alienation. After property is conveyed, the new owner should have full rights to it. A previous owner shouldn’t control how or to whom the new owner sells or rents it out. So, a court might nullify a deed restriction that forbids a homeowner from renting the house. Or the court might override a restriction on a gift house that the recipient can’t sell, alter, or share.

The original rule throughout most states was that no restraint on alienation would be upheld. Policies have changed. The rule against perpetuities has been modified by many states and repealed by a few. And today, the courts of most states typically leave reasonable restraints on alienation in place. What’s reasonable? That depends upon the facts and circumstances of a particular case.

Some deed restrictions are relatively minor: no keeping of exotic animals; certain colors of paint to preserve the character of the neighborhood; and so forth. No matter how minor or sweeping, a deed restriction is a binding contract. By signing the closing paperwork, the buyer agrees to abide by it.  

In some contexts, deed restrictions are generally considered reasonable across the board, and owners must accept them and live with them. Here are some of the most common examples.

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“Particularly Insidious”: Update on House Theft in Philadelphia

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Deed fraud and house theft are particularly insidious crimes because they not only impact the home’s real owner and often their family, but also sap generational wealth from them as well as their communities, driving poverty and desperation.
— Philadelphia D.A. Larry Krasner, quoted by NBC10 Philadelphia on March 22, 2021.

Something strange happened in Philly early in 2014. The late Norman Johnson signed a deed from the grave, transferring a South Philadelphia rowhouse for only $15,000 to Amen Brown. Dawn Presbery, the daughter of the deceased and the home’s real owner, fought for two years to recover the deed.

In some cases like this, the D.A. prosecutes, and the person named on the deed ultimately has to sign a new deed to restore the title to its rightful owner. Here, the forgery was pursued in the criminal courts, but the case against Brown was thrown out.

Brown claims to have parted with the $15,000 at the urging of a scammer on Craigslist. But regardless of Brown’s story, as Max Marin noted for Billy Penn, it’s astonishing that even criminal charges didn’t induce Brown to return the house title to its rightful owner.

The Philadelphia Court of Common Pleas finally ordered the forged deed returned to Dawn Presbery. Later, with remarkable chutzpah, Brown won an election to Pennsylvania’s House of Representatives, assumed office on December 1, 2020, and set out this year to pass tough-on-crime bills and to defend the rights of homeowners to keep their homes.

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Not Entitled? Owners of “Heirship Properties” Locked Out of Disaster Relief

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July 2021 — Elsa was the earliest “E” storm we’ve ever experienced, and Colorado State University now has raised its 2021 Atlantic hurricane season prediction. We should now expect 20 named storms, says CSU. This, after the unprecedented 2020 hurricane season.

Disaster relief funds will be vital this year. And this brings up multiple problems for people in the hurricanes’ paths with no clear title to their homes.

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From Crowdfunding to Tokenization: The Evolution of Shares in Real Estate

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July, 2021 — Real estate has long functioned as a store of equity value that owners can exchange for money, loans and lines of credit. Yet the typical real estate transaction is associated with a cumbersome, bureaucratic, and fee-heavy process that every homeowner is greatly relieved to finish.  

There are other ways to invest in real estate that do not take the same level of personal involvement and work as direct purchases of real estate do. In other words, investments in buildings and land can be more liquid. In addition to investing in and financing one’s own property, it’s possible to invest in real estate exchange-traded funds (ETFs) and real estate investment trusts (REITs) through stock brokerage accounts, including individual retirement accounts.

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DACA Beneficiaries (“Dreamers”) Can Now Buy Homes With FHA Loans

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In 2021, FHA home loans are once again attainable for hundreds of thousands of young beneficiaries of Deferred Action for Childhood Arrivals (DACA). Brought to the country as young children, DACA recipients are called Dreamers because they received temporary conditional residency, Social Security numbers, and work permission under the Development, Relief, and Education for Alien Minors (DREAM) Act.

Dreamers have grown up in the United States. They consider it home. To be DACA-eligible, they’ve studied for a diploma or G.E.D., or performed military service. Under DACA, they may continue to study and hold jobs without deportation fears.  

Most Dreamers are now in their 20s and 30s — a time in life when many young adults consider buying houses. And now, many more can. 

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Breaking Legal News in Hawaii: Home Sellers Must Now Disclose Sea Level Risks

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It’s a sign of the coming times. Hawaii’s Senate Bill 474 has amended the state’s flood hazard disclosure rules for residential real estate. Disclosures now must include sea level rise exposure, in alignment with hydraulic and hydrological data from the Hawaii Climate Change Mitigation and Adaptation Commission.

Gov. David Ige signed the bill on July 2, 2021. One of the other bills signed on the same day was House Bill 243, which directs state agencies to take sea level rise into account in infrastructure plans.

These bills are among the latest steps Hawaii has taken to meet the goals of its 2050 Sustainability Plan and the capacity of future generations to thrive.

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Issue Spotting: Buying a Home With an Unmarried Partner

Thinking of buying a house with your partner? Many unmarried couples decide to live together, often co-owning their homes. Here are some questions to consider if you’re thinking of making a similar commitment.

Will One Partner Take Out the Mortgage? Or Will You Be Co-Borrowers?

Two people sitting in a house with moving boxes behind them,

When unmarried couples apply for a mortgage, the partner with stronger credit may opt to be the sole buyer. This can lead to the best possible loan terms and rates.

Alternatively, the couple can apply for a mortgage in both names and pay it off from a joint bank account. Buying a home together, as co-borrowers, may seem to strengthen the couple’s borrowing power. Yet it can do the opposite. A lender will look at the lower of the two credit scores to make approval decisions.

Moreover, co-borrowers need to refinance the loan if they later stop co-owning and put the title into only one of their names. Handling a home loan jointly can complicate the couple’s future if the relationship changes.

Before applying for your mortgage, get the facts on credit scores — and how to boost yours.

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