California: Real Estate Principals Review

township lines

All the lines in a rectangular survey system that run east and west, parallel to the base line six miles apart.

Commercial Loan

A straight bank loan that the borrower obtains based either on good credit or some NON-real property collateral.

California Business and Professions Code Section 10085.5

It shall be unlawful for any person to claim, demand, charge, receive, collect, or contract for an advance fee

PC 532a

Making, benefiting by, or reaffirming falsification regarding anyone's financial information.

Formerly, the Unruh Civil Rights Act protected people from being discriminated against because of their sex, race, color, religion, ancestry, national origin, disability, or medical condition. However, recent changes have added two new bases for discrimination that are illegal in California. These are:

Marital status and sexual orientation.

What are the steps set forth for a real property securities dealer? Which Article do the regulations fall under?

Obtaining a Commissioner's Permit; an RPSD endorsement on a broker license; and proof of a $10,000 surety bond. The regulations fall under Article 6.

PC 518, 519

Obtaining property from another by threatening to accuse that person of a crime or to expose his/her secrets.

Alluvial Right

Rights regarding land

Building Officials Conference of America

Sets requirements for building

Ratification Agency

Someone Adopts or Approves of Someone Else's Actions on his Behalf After the Actions Take Place.

In a general warranty deed, what covenant in not a requirment?

Covenant of Exceptions and Reservations

Business and Professions Code Section 10145

Covers proper placements of funds on behalf of another to a a broker

Doctrine of Appropriation

Diverting of water from the source

RESPA

Eliminating kickbacks and referral fees which add unnecessary costs to settlement services

What is the order of foreclosure actions?

Equitable Right of Redemption, Foreclosure, and Statutory Redemption

PC 504b

Failure by debtor, upon sale of property covered by a security agreement, to pay to the secured party the amount due under the security agreement

How to calculate the income capitalization approach

First estimate potential annual gross income and subtract the vacancy allowance and collection losses. Add on-rental income to determine annual gross income and then subtract annual operating expenses, not to include debt service or mortgage payments, then divide by the cap rate

PC 556-556.2

The placement of advertising signs on public or private property without permission, except in the case of a legal public notice

Estate at Will

A tenant who lives in a rental unit without a formal lease or contract.

What are the legal difference(s) between real and personal property?

An agreement for a sale of real property must be in writing and signed by the party to be charged. If the amount or value is $500 or more, an agreement for the sale of personal property must be in writing. Tax laws often distinguish between real and personal property.

Roy Malone owns a large piece of land in the Sonoma Valley. He is planning to subdivide the land into five lots for the construction of luxury homes. If Roy carries through with this project, what are his roles and his next steps?

Roy is considered a Subdivider. His first step should be a development plan

Ostensible Agency

A relationship that exists between two parties that would lead a person to believe that one party is employed by the other.

What are the requirements for a property to not be reappraised nor taxes increased when the transfer of ownership is from parent to child?

When the property is valued at $1 million or less

What are the results of a buyer and seller of a business opportunity involving inventory deciding not to follow the bulk sale law regulations?

the sale is considered valid between the buyer and seller but is void against the creditors

Avulsion

the sudden loss of land by action of water

1. The subdivision Map Act regulates the division of _____. 2.The subdivided lands law defines a subdivision as a division of land into ____. 3.A Land Project must have ______.

1. two or more lots 2.five or more lots 3.fifty or more vacant lots

How many annual collections or value of collections must a collector make to have to be licensed as a broker?

10 annual collections or $40,000

No mortgage insurance is required on a conventional loan with a down payment of at least

20%

What is the minimum down payment required for a FHA loan?

3.5%

Civil Code Section 1365.1 states that the homeowner association must distribute a written notice entitled, "NOTICE ASSESSMENTS AND FORECLOSURE" to EACH member of the common interest development association. How long immediately preceding the beginning of the association's fiscal year must this notice be distributed?

60 days

A corporation is found guilty of charging purchasers advanced fees for securing mortgage loans on homes they have listed. What is the punishment for the violation?

A fine up to a maximum of $50,000.

Estoppel

A legal theory under which a person is barred from asserting or denying a fact because of the person's previous acts or words.

Express Agency

Actual agency created by written or oral agreement between the principal and agent

What is the primary focus of federal legislation.

Anti-discrimination laws and fair trade practices

What is the largest area of the NAR Code of Ethics Standards and Practices?

Article 16 - Ethics and Agency Relationships

PC 639-639a

Bribery of a lender to obtain credit, OR the acceptance of such bribery.

Why would a Contract for Deed (Installment Sale Contract) be attractive to certain buyers?

Buyers who can only make a small down payment with monthly installments. Usually they must meet certain conditions, and the Contract for Deed does not require conveyance (transfer) within the same year.

Which regulations or sections apply to the use of internet for advertising in California?

Commissions regulation 2770

Reliction

Gradual recession of water which uncovers land that usually belongs to the riparian owner.

Disintermediation

Investing directly in the securities market rather than a bank

What is the most frequently used form of syndicate

Laminated partnership

impounds

Monthly payments of taxes and insurance collected by the lender to assure payment of these items when they become due.

Capitalization rate equation

Net Operating Income divided by Capitalization Rate = Value

Are zoning changes that create external obsolescence curable?

No

The couple purchased their home together after their marriage, but Scott owned the vacation property prior to the union. Christine and Scott are now getting divorced. Christine wants half of their residence and half of the ownership of the vacation property. At times they have rented the vacation home and the proceeds have gone to their joint bank account. Does Christine have any legal right to the ownership of the vacation home?

No, Scott came to the marriage with the vacation property, therefore it may remain a separate property. However, due to the commingling of the rental proceeds from the property in the joint account, she does have a right to half the proceeds.

If a property with active leases is sold, what happens to the leases?

Nothing, leases do not terminate because a property is sold

PC 502.5

Removal of a structure from mortgaged real property, or after a foreclosure sale, with the intent to defraud or to injure the mortgagee or purchaser.

Commissioner's Regulation 2832

Requires broker exercises reasonable supervision over the activities of their salespersons

What is the correct order of regulatory agency jurisdiction changes to non-corporate California real estate syndicates since The Real Estate Syndicate Act's inception in 1970?

The Department of Corporations, The California Department of Real Estate, The Department of Corporations

What source has no imput on the "professional code"? -federal and state legislation -industry self-regulation through trade associations and institutes -The better business bureau -state real estate licensing regulation

The better business bureau

Who decides who pays the fee due to the escrow company? The buyer, seller, or the escrow company themselves?

The buyer and seller negotiate between themselves who is responsible for paying the fee

Regarding a bulk sale, who must give the public notice, and how many days notice must they give and why?

The buyers must give the public notice. They must give a public notice 12 business days before the transfer occurs. It gives the seller's creditors an opportunity to file a claim if trade credit is still owed on the inventory.

PC 484b-c

The diversion of construction funds from their intended purpose; also, using a false voucher to obtain construction loan funds.

What forms of syndicate avoid double taxation, but lack of centralized management?

The general partnership and the joint venture

What is included in the APR

The total finance charge to the total amount to be financed.

What are the major differences between a mortgage and a deed of trust?

The number of parties involved and the method of foreclosure on default.

To take private property through eminent domain, three steps must be taken by the state or local government. What are they?

The property owner must be paid compensation for the property. The property must be for public good or use. The owner must have due process in the court system.

Olive Maccones dies without a will. She has three sons and seven grandchildren. She owned a substantial amount of property. What happens to the property?

The property will be transferred according to the Statute of Descent and Distribution.

The 1943 case People v. Sipper held what decision?

The selection of a mortgage/deed by a broker, in which a fee is charged, is unlawful

Attestation

The signature of the notary

Subrogation

The substitution of one person or group by another in respect of a debt or insurance claim, accompanied by the transfer of any associated rights and duties.

Who benefits from a long term lease?

The tenant, Rent is deductible and the total debt load remains the same

Ranges

Vertical lines running north/south on either side of a principal meridian

PC 470, 473

To forge or otherwise sign the name of someone else, or of a fictitious person, without the authority from that person

What type of deed is not really a deed at all?

Trust Deed

How many, if any, escrow or trust accounts must a property manager maintain?

Two - One is for security deposits and one for current rents and management.

Prop 218

requires voter approval prior to imposition or increase of general taxes, assessments, and certain user fees.

Balance Sheet

shows the financial status of the business on a particular date and includes assets, liabilities, and net worth

an ad on Facebook by a private owner which states "No young children because of pool". Would this be a Fair Housing Violation?

Yes. Private owners cannot advertise against a protected class

Base lines

east-west lines separating townships

What are the four types of leasehold estates

estate for years, an estate from period to period, and an estate at will.

Meridians

lines of longitude

California's Statute of Frauds requires a lease to be in writing if it has a term of

more than one year, or has a term of less than one year, which expires more than one year after the agreement is reached.

Alluvion

the increase in the area of land due to accumulation of soil, clay or other material deposited by water.