Bundle of rights

What is bundle of rights?

Bundle of rights is a term used to describe the various interests and rights that a real estate title holder has in regard to ownership of a property.

Deeper definition

When you own property, you have a bundle of rights that includes the right to sell, lease, use, exclude, enjoy, dispose of or develop the property. Owners’ rights can vary depending on local laws.

A property owner’s rights can be limited in different situations, such as when property taxes are not paid. In most cases, a property titleholder has the right to use, manage and enjoy the property in any way that is legal, although restrictions can apply. Playing music within a certain decibel range, for example, may not be allowed due to subdivision regulations or the covenants of a homeowners association.

Bundle of rights example

In the 1992 U.S. Supreme Court case Lucas v. South Carolina Coastal Commission, it was established that because of the bundle of rights, taking away a property owner’s right to develop the property is no different from taking away the property altogether. David Lucas, the owner of beachfront property in South Carolina, was denied developmental rights because of the state’s mission to preserve the land and provide beach access for the public. The state did not provide compensation for Lucas’ loss until after the case went to the U.S. Supreme Court. This court case strengthened the bundle of rights laws that property ownership extends beyond just the physical possession of real estate.

Use Bankrate’s calculator to determine how much house you can afford to buy.