What is the ‘Bundle of Rights’?
The ‘bundle of rights’ is a metaphor used in real estate to describe the range of legal rights that an owner has over a property. It comprises seven core rights: possession, control, enjoyment, exclusion, use, transfer and disposition. Collectively, they provide the owner with full legal control over the property, allowing them to use, lease, sell, or even do nothing with it.
The Seven Rights in the Bundle
The ‘bundle of rights’ can be compared to an actual bundle of sticks, where each stick represents a distinct right. Let’s break down these seven ‘sticks’ in the real estate bundle of rights:
Right of Possession
The right of possession is the right to own the property. As long as the property is legal and the owner has a valid title, they can claim ownership.
Right of Control
This right grants owners the power to manage and use their property as they see fit, within the bounds of local and federal laws. This can include deciding the property’s aesthetics or determining its function.
Right of Enjoyment
The right of enjoyment permits owners to use and enjoy their property peacefully, without interference. If disrupted (for example, by a nuisance), they have legal grounds to seek remedy.
Right of Exclusion
The right of exclusion allows owners to prevent others from trespassing or entering their property. Owners can selectively grant access, such as through leasing or easements.
Right of Disposition
The right of disposition provides the owner the ability to transfer ownership, either temporarily (such as leasing or renting) or permanently (via selling or gifting). It also allows them to leave the property to a beneficiary in their will.
Right of Use
The right to use the property as they see fit, within legal constraints.
Right of Transfer
The right to transfer ownership of the property by selling it, giving it away, or transferring it to an heir.