Bundle of Rights

Bundle of Rights

What is a set of rights?

A set of rights is a term for the set of legal privileges generally granted to a property buyer when the title is transferred. The offer includes the following:

  • Right of possession
  • The right of control
  • The right of exclusion
  • The right to enjoyment
  • The right of disposal

The average home buyer can expect all traditional rights after the transaction is completed.

Real property has a complex set of rights, and the concept of the set of rights has traditionally been the way in which these rights are described and summarized. This is a feature of many real estate license tests and first-year law courses.

Key points to remember

  • A property buyer obtains a set of rights with the title.
  • These rights generally give the buyer the freedom to use the property within the limits of the law.
  • Commercial real estate investors may share some of these rights with other parties.

Understanding a set of rights

The average home buyer can expect all traditional rights after the transaction is completed. In other words, home buyers expect to have the right of possession, control, exclusion, enjoyment and disposition.

However, these rights can be divided and assigned to different parties. This generally applies to purchases of commercial and investment property. For example, the buyer of a rental property may have rights that are limited by local laws and regulations of the owner-tenant. The owner of a showcase property may share certain rights with the tenant who operates a business there.

In all cases, the bundle of rights of a property owner can only be exercised with the limits of many other laws. For example, the owner’s right of enjoyment cannot be exercised beyond the limits of local noise abatement laws.

Right of possession

The right of possession simply states that the title holder is the legal owner of the property.

Right of control

The title holder can use the property in any non-illegal manner. In practice, a homeowners’ association (if there is one) can impose additional restrictions on everything from garden ornaments to the possession of pets, although these rules are not laws.

Right of exclusion

The right of exclusion allows the title holder to limit who can enter the property. This one has few real limits. Easements may be in place allowing access to public service lines may override this right. A warrant authorizing a search of the property prevails over the right of exclusion.

Right of use

The right to enjoyment affirms the right of the holder of the title to participate in all the activities he finds enjoyable on the property. This again assumes that these activities are lawful.

Right to dispose

The right of disposal protects the right of the title holder to transfer ownership, permanently or temporarily, to another party. This right is only fully realized when the property is fully owned and not mortgaged. An exclusion also applies if the property is the subject of a lien.

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