In U.S. real estate, the “bundle of rights” refers to the legal rights that come with real property ownership. These rights can be separated, limited, or transferred (for example, through leases, easements, or mineral rights sales). They are also subject to government controls on the use and even ownership. Homeowner’s association (HOA) covenants, conditions and restrictions (CC&Rs) and deed restrictions, private limits on property use written into the deed, can place additional controls on real property.
What is Real Property?
Real Property is land plus man-made improvements plus legal rights to the land (bundle of rights).
Land is everything from the center of the earth upward. It includes the subsurface, surface and the air above the earth. It does not include anything made by man.
Real Estate is land plus man-made improvements, including buildings, fixtures, utilities, sewage systems, etc.
What is a Bundle of Rights?
Bundle of Rights is the description of all the intangible rights held by a property owner of real property. These are Possession, Control (Use), Exclusion, Transfer (Disposition) and Enjoyment (Quiet). Each right can be separated (severed) and/or annexed depending on circumstances.
Possession grants the right to occupy the property and/or use it as one’s own. The owner can live in it, leave it vacant, or rent it to someone else as long as the legal owner complies with laws (like zoning or HOA rules).
Control grants the owner the use of the property in any lawful way. The owner can build a home or structure (subject to permits), farm or ranch the land, or operate a business (if zoning allows). However, control is subject to Government Controls.
Exclusion grants the owner the right to make it private. The right to privacy means an owner can stop others from entering the property without the owner’s permission. Owners can post “No Trespassing” signs, remove unwanted visitors, call law enforcement for trespassers.
The exclusionary right is subject to legal exceptions like: utility easements and government inspections (with proper authority).
Transfer (Disposition) grants the owner the right to sell it, lease it to tenants, vacate it, mortgage it, cultivate it, gift it, leave it to heirs in a will, etc.
In Texas, this right is particularly important because owners can also transfer partial interests, such as mineral or other subsurface rights. Texas is unique in how frequently mineral rights are separated from surface rights.
Enjoyment (Quiet) grants that no one has a superior claim on the property. The owner has the right to use and enjoy the property without interference. Neighbors can’t create a legal nuisance, others can’t unlawfully disturb the owner’s legal use. If someone interferes, owners may have grounds for civil claims.
Important: Texas-Specific Considerations
Texas property rights are strong, but they can be limited by:
Eminent Domain – Government can take property for public use with just compensation.
Homestead Laws – Texas homestead laws protect a primary residence from most creditors, limit property tax increases through appraisal caps, provide valuable tax exemptions, and safeguard homeowners and surviving family members from forced sale in many circumstances.
Community Property Rules – Married couples generally share ownership of property acquired during marriage.
What Rights Does Government Have in Land?
No property owner ever enjoys the full bundle of rights. There are always restrictions placed on these rights by governments that have jurisdiction over the property.
Individual ownership rights are subject to certain powers, or rights, held by federal, state, and local governments intended to promote the general welfare of the community.
In Texas real estate, government controls over private property are commonly remembered with the acronym
PETE. These are Police Power, Eminent Domain, Taxation and Escheat. Here’s how each applies in Texas:
P – Police Power is the government’s authority to regulate private property through laws such as zoning, building codes, and land-use regulations to protect public health, safety, morals, and general welfare.
E – Eminent Domain is the government’s power to take private property for public use, provided it pays just compensation.
T – Taxation grants the government the authority to tax real property. In Texas, property taxes are assessed by local appraisal districts to fund schools, counties, cities, and special districts. Failure to pay can result in a tax lien and eventually foreclosure.
E – Escheat is the state’s power to claim ownership of property when someone dies without heirs, intestate (without a will) or without a valid will. This is rare but legally important.
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I’ve Got Your Six!
Mark M. Hancock, GRI, MRP, AHWD
REALTOR, New Build certified
KW North Country
214-862-7212
dfwmark@KW.com
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