©2011 cengage learning. chapter 1 introduction to real estate california real estate principles...

Chapter 1Introduction to Real Estate

California Real Estate Principles


Trace the history of real property ownership in California

List the 4 parts for the definition of real property & distinguish between Real & Personal Property

Explain the “bundle of rights”List the 5 legal tests for a fixture

Chapter 1


California History1. Native Americans2. Explorer Balboa (1513)3. SPANISH rule (1542-1822)

San Diego: lst settlement, by Cabrillo

4. Spanish developments (1769) Forts = presidios Villages = pueblos Land grants = ranchos – 21 Missions

5. MEXICAN rule (1822)6. Mexican-American War (1846-1848)7. UNITED STATES rule

Treaty of Guadalupe Hidalgo (1848) Statehood (September 9, 1850)


California Real EstateBoard of Land Commissioners

Formed to settle private land claimsRecording system adopted for land

California legal system Formerly Spanish Civil Code English common law enacted Retained Spanish community property laws

Modern California Urban/suburban residents Population centers: Greater LA,

San Diego, Sacramento, San Francisco/Oakland


Real Estate

Real property is the physical + plus the legal

rights of ownership = the Bundle of Rights

Real estate in a physical sense is land and buildings, things you can touch.


BUNDLE OF RIGHTS*Include the right to:

1. Own and possess

2. Use

3. Enjoy

4. Encumber or borrow against

5. Dispose

6. Exclude others who do not share ownership *Subject to

government controls


Sample Test QuestionUnder today’s concept of the bundle of rights, a

property owner has the right to all EXCEPT which of the following:A. encumberB. destroyC. possess D. alienate


Property Rights Do NOT Include the Right to:

Destroy

•Value to neighboring property (vacant lot)

•Health & safety issues on tear downs (environment)

Why?


Property OwnershipIs not absoluteIs subject to government controls, such as:

Zoning and building codesFair housing and antidiscriminationHealth & safety regulationsPolice powerPermits and licensesPublic interest issues


Definition: Real EstateLAND

AFFIXED TO LAND

APPURTENANT TO LAND

IMMOVABLE BY LAW


REAL PROPERTY is LAND:

LAND includes:

Earth’s surface lateral supportsubjacent support

Materials under the surfaceSubstances, including waterMinerals, oil & gas


Air rights: above the surface

From

earth’s

surface

to the

Federal

Aviation

(FAA) floor


Mineral RightsOil and Gas Rights

Rule of CaptureRule of Extraction


Water RightsRiparianPrior AppropriationUnderground water

Concept of Reasonable UseRiparian – borders

steam or lakeLittoral – borders

shore of sea or ocean


Water Rights:Different states have different laws:- Appropriation water right

–Owner has exclusive right to take all water for specific beneficial use of the land

–The state grants permission to non-riparian owner.

–Correlative water right–Owner entitled to take only a reasonable amount

of water for benefit to the land (irrigation)


Property Affixed to the land:

Affixed – Building improvementsAppurtenances – Landscaping attached by rootsIncidental – Utility pipesAttachments – FenceEasements – Right of wayFixtures – Patio coverStock in a mutual water companyImmovable, by law


Appurtenances

• Easements

• Stock in a mutual water company


PERSONAL PROPERTY is everything that is NOT real property

Chattel - ChoseMovable goodsPaper Documents about real property: money,

stocks, contracts, deed, lease, promissory noteTransferred by a Bill of SaleEMBLEMENTS

Annual cultivated crop


Real OR Personal property?

REAL Property PERSONAL Property

Real property can become personal propertyPersonal property can become real property


TEST OF A FIXTURE

NOTE: The law favors the borrower over a lender, a buyer over a seller, and the tenant over the landlord.

M ethod of Attachment

A daptability for Ordinary Use

R elationship of the Parties

I ntent of the Parties

Agreement Between the Parties


TRADE FIXTURE

Personal property of a business affixed or annexed to the real property

Considered personal property (cash register/safe)Tenant may remove before the lease ends but

must repair any damage to the real property


California Domestic Partnership LawEffective January 1, 2005 registered domestic

partners have many of the same California constitutional real estate rights as husbands & wives

Not recognized by federal laws & regulationsOther states also do not recognize this law


1. Airspace above a parcel of land is:(a) real property (b) personal property(c) an encumbrance (d) a fixture

2. Zoning regulations have the greatest impact on which right?

(a) right to encumber (b) right to possess(c) right to use (d) right to exclude

Review Quiz Chapter One - Introduction to Real Estate


Review Quiz Chapter One – Introduction to Real Estate

3. All of the following are real property except:(a) fruit trees (b) chattels(c) stock in a mutual water company (d) built-in stove

4. In a dispute over fixtures, courts tend to favor

(a) sellers over buyers

(b) landlords over tenants

(c) lenders over borrowers

(d) grantors over grantees


6. Which of the following is a test of a fixture?(a) attachment (b) chose (c) appropriation (d) restrictions


5. The right of a land owner along a river to take water is called:

(a) percolating rights(b) river water rights(c) user rights (d) riparian rights



7. California became a state in:(a) 1803 (b) 1848 (c) 1849 (d) 1850

8. Shelves in a retail store are an example of:

(a) real estate

(b) encumbrances

(c) trade fixtures

(d) real property


9. All of the following "run with the land," except:(a) easements (b) private deed restrictions(c) water rights (d) current harvest rights

10. Which real estate term is the most inclusive? (a) real estate (b) real property



Answers to Chapter 1 Review Quiz

1. A 6. A

2. C 7. D

3. B 8. C

4. C 9. D

5. D 10. B


©2011 cengage learning. chapter 1 introduction to real estate california real estate principles...

Documents

cengage learning slide

property rights

real estate real property

real estate land

bundle of rights real

definition of real property

real personal property

land appurtenant