Profit (real estate)
Encyclopedia
A profit in the law
of real property
, is a nonpossessory interest in land
similar to the better-known easement
, which gives the holder the right to take natural resources such as petroleum
, minerals, timber
, and wild game from the land of another. Indeed, because of the necessity of allowing access to the land so that resources may be gathered, every profit contains an implied easement for the owner of the profit to enter the other party's land for the purpose of collecting the resources permitted by the profit.
In Gross. By contrast, a profit in gross can be assigned
or otherwise transferred by its owner. Courts will construe a profit as being in gross unless the profit is expressly designated as being appurtenant. Therefore, profits by prescription will virtually always be profits in gross. Like a commercial easement in gross, a profit in gross is completely alienable. Profits can also be exclusive (guaranteeing the owner of the profit that no other person will be given the right to collect the specified resources on the land).
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
of real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
, is a nonpossessory interest in land
Nonpossessory interest in land
A nonpossessory interest in land is a term of the law of property to describe any of a category of rights held by one person to use land that is in the possession of another...
similar to the better-known easement
Easement
An easement is a certain right to use the real property of another without possessing it.Easements are helpful for providing pathways across two or more pieces of property or allowing an individual to fish in a privately owned pond...
, which gives the holder the right to take natural resources such as petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
, minerals, timber
Timber
Timber may refer to:* Timber, a term common in the United Kingdom and Australia for wood materials * Timber, Oregon, an unincorporated community in the U.S...
, and wild game from the land of another. Indeed, because of the necessity of allowing access to the land so that resources may be gathered, every profit contains an implied easement for the owner of the profit to enter the other party's land for the purpose of collecting the resources permitted by the profit.
Creation
Like an easement, profits can be created expressly by an agreement between the property owner and the owner of the profit, or by prescription, where the owner of the profit has made "open and notorious" use of the land for a continuous and uninterrupted statutory period.Types
Appurtenant. A profit can be appurtenant (owned by an adjacent landowner, and tied to the use of the adjacent land) or in gross. An appurtenant profit may only be used by the owner of the adjacent property. A properly recorded profit will remain even if the ownership of the land upon which the profit exists changes hands.In Gross. By contrast, a profit in gross can be assigned
Assignment (law)
An assignment is a term used with similar meanings in the law of contracts and in the law of real estate. In both instances, it encompasses the transfer of rights held by one party—the assignor—to another party—the assignee...
or otherwise transferred by its owner. Courts will construe a profit as being in gross unless the profit is expressly designated as being appurtenant. Therefore, profits by prescription will virtually always be profits in gross. Like a commercial easement in gross, a profit in gross is completely alienable. Profits can also be exclusive (guaranteeing the owner of the profit that no other person will be given the right to collect the specified resources on the land).
Termination
Termination of a profit can occur by a number of means, including:- mergerMerger doctrine (property law)In the law of real property, the merger doctrine stands for the proposition that the contract for the conveyance of property merges into the deed of conveyance; therefore, any guarantees made in the contract that are not reflected in the deed are extinguished when the deed is conveyed to the buyer...
- if the owner of the profit acquires the land to which it applies, there is no longer any need for a separate right to take resources off it. - releaseLegal releaseA legal release is a legal instrument that acts to terminate any legal liability between the releasor and the releasee, signed by the releasor. A release may also be made orally in some circumstances...
- the owner of the profit can execute a contract to surrender the profit to the owner of the land. - abandonmentAbandonmentThe term abandonment has a multitude of uses, legal and extra-legal. This "signpost article" provides a guide to the various legal and quasi-legal uses of the word and includes links to articles that deal with each of the distinct concepts at greater length...
- the owner of the profit ceases to make use of it for a sufficient length of time to lead a reasonable owner to believe that it will no longer be used. - misuse - if a profit is used in such a way that it places a burden on the servient estate, then it will be terminated.