People unfamiliar with the process of buying and developing or managing property often think that purchasing a piece of real estate guarantees them full ownership and autonomy to do whatever they want with it -- but ownership over a property’s "bundle of rights" isn’t all or nothing. Instead of thinking of a real estate property like a car, where you buy the whole thing and own it completely when you drive off the lot, think of a piece of real estate like a bag of groceries, or a packet of things. Some professionals actually use the analogy of a bundle of sticks, in keeping with the "bundle of rights" phrase
Of course, the analogy isn’t exactly accurate, because property rights are oftentimes intangible and complicated concepts, whereas sticks are inanimate objects. However, for understanding the bundle of rights, it helps to envision a bundle of items, each which may be sold together or separately.
What is a bundle of rights?
A bundle of rights, in real estate, refers to the various interests and legal rights afforded to the owner of a piece of real property. Some rights may belong to or be shared with other entities, including the government, so it's important to understand what rights out of the bundle are available for purchase.
Unpacking a bundle of rights -- the individual components
There are many rights in a bundle of rights, but the most significant are sometimes referred to with the acronym DEEP C (easy to remember it by "deep sea") which stands for right of:
The right to sell a property. This right is often shared if there’s concurrent estate ,for example tenancy in common created through a will. Obviously, though, if someone wants to buy a property with the intent to resell it for a profit, they don’t want to share the right of disposition.
The right to "quiet enjoyment," which is to use and enjoy the property undisturbed. When a landlord rents to a tenant, they are renting this right to the tenant for as long as the lease is valid.
This is the right to prohibit other people from setting foot on private property. This is a very powerful ownership ability that’s wrapped up in this country’s Constitutional rights, but it’s not absolute -- specifically when the government overrides it through either a warrant (for urgent legal reasons) or eminent domain (because semipermanent access to part of the property is required by the government).
This is the essential legal ownership of property, including the right to physically control it. The lines between property ownership and physical control seem to perfectly overlap, but they actually do not. For example, if one party is part of a tenancy in common (TIC) as an investor only, and has no rights to occupy any part of the property, they may not have right of possession.
This right allows a person to control the use of a property, to use it and manage it -- within the boundaries of what’s acceptable to government, zoning regulations, covenants of the homeowners association, etc. Interestingly, the HOA bylaws may have the most impact on right of control, as these associations act as little private mini-governments and lay down laws over how residents may use their properties.
Other rights include the right to encumber, right to lease, right to give away, right to improve the surface of land, air rights, and mineral rights.