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Bundle of Rights
Bundle of Rights
Though “while you’re under my roof, you live by my rules,” is a bummer to hear when you’re a
teenager, it’s a pretty good intro into rights that come with homeownership.
But homeownership is complex; when you have ownership interest in a property, your rights to that
property are multifaceted, and there are many things that can impact those rights.
This is where the bundle of rights comes in.
The bundle of rights is a concept that helps us understand our rights to the property we own. So what
does it mean, exactly?
The term “bundle of rights” describes the set of legal rights associated with ownership of real property.
The “bundle” is made up of five different rights: the right of possession, the right of control, the right of
exclusion, the right of enjoyment and the right of disposition.
Think of your bundle of rights as a bunch of bananas. Each banana represents one of your five rights.
When you own your home outright without any liens, encumbrances or shared ownership, you have a
full bunch.
However, if you used a mortgage to purchase the property, you may have to share one of your bananas
with your lender. Once you pay off your loan, the lender will give you your banana back. Or, if the home
is an investment property that you rent out, your renter might hold some of your bananas while they
live there.
Essentially, when you own a home, the rights you have as a property owner can be separated and held
by someone other than you. So, you might not always have your full bundle of rights – or a full bunch of
bananas – even if you’re the owner of the home.
Additionally, even if you retain all the rights to your home, those rights will still be limited by the law and
things like homeowner’s association rules.
Let’s take a closer look at each of the five rights that makes up your bundle of rights.
If you live in a community governed by an HOA, the HOA’s regulations can put certain limits on this right.
For example, you might not be able to paint your house an outlandish color or keep a pet in your condo
if it’s against HOA rules.
Local laws can impact your right of control as well. Depending on how your neighborhood is zoned, for
example, you might not be able to run certain types of businesses out of your home or keep a coop of
chickens in your backyard.
If you have a lien on the property, this can complicate your ability to sell it. When you sell a home with a
mortgage lien on it, you’ll have to pay off the remaining loan balance with the proceeds from the sale.
This can be particularly helpful if you co-own a home with somebody, such as a spouse. When you share
homeownership, you can’t always make unilateral decisions about what happens with the property. For
example, you’ll generally need your co-owner’s permission before you can put the house up for sale.