Real Estate Principles (Unit 2)

Economic GPD 2015 [2.7]

-$2.46 trillion, California's economy is about one-seventh of the total for the nation -California qualifies as the sixth largest economy in the world *TERRIFYING FACT: Eventually, Los Angeles and San Diego will form one continuous urban area, or megalopolis.*

Land ownership in CA [2.6]

-About 29% of the total land area is devoted to agriculture. Federal ownership: 45% State ownership: 2% Local ownership: 2% Private Ownership: 51%

Real Property Elements [2.9]

-Land -Fixtures (attachments) to land -Anything incidental or appurtenant to land -Anything immovable by law

Riparian Rights [2.10]

-Riparian rights are the rights of a landowner whose land borders on a stream or watercourse to use and enjoy the water which is adjacent to or flows over the owners land, provided such use does not injure other adjacent land owners. -under this owners DO NOT own the water. -If the stream is navigable, the state owns the land under the stream and the riparian landowner's property line is the mean high water line of the stream; otherwise, the landowner's property line is the center of the stream.

CA statehood [2.5]

-When CA became state it became owner of all lands lying under navigable streams and lakes and above the ordinary high-tide line. -Tidelands are held in trust for public navigation, fishing, and recreation. -ertain rights to public lands can be transferred, however, which allows the collection of income from oil and gas production.

Air rights [2.10]

-have been modified from the historic concept of infinite airspace having no limitation. Federal law (the Air Commerce Act of 1926 and the Civil Aeronautics Act of 1938) allows use of airspace by aircraft. Local laws impose building height restrictions. In central city locations, air rights may be a profitable commodity. They may be transferable from one property owner to another to allow construction of skyscrapers on limited and expensive ground area.

personal property [2.12]

-is all property that is not real property. things that are tangible and movable; property that is not classified as real property, such as chattels. Title to personal property is transferred by way of a bill of sale, as contrasted with a deed for real property. FOR EXAMPLE: Trees are real property while they are growing in the ground. When the trees are cut down, they become personal property. Tree logs may be cut into boards and used in the construction of a building that is considered part of the land. Thus, the wood from the tree that began as real property may again become real property.

Real Property in CA [2.9]

-is land, both at and below the surface and above the surface. -includes mineral rights, water rights, and air rights. -synonymous with the term real estate -The interests, benefits and rights inherent in real estate ownership.

The best practice is to use to describe or define a parcel of real estate is [2.14]

-legal description -APN-the tax assessor's parcel number; and -street address, when available. *Most deeds show the legal description followed by a.k.a. (also known as) and the street address.*

Appropriative water rights [2.10]

-subject to priority of claims filed before December 19, 1914; the claims remain valid as long as the water is put to a beneficial use.

range [2.15]

1. A measure of the difference between the highest and lowest variates. 2. A strip of land six miles wide, extending north and south and numbered east and west according to its distance from the principal meridian in the rectangular (government) survey system of legal description.

Emblements [2.11]

1. Growing crops produced by the labor of the cultivator. 2. The right to the profits from such crops. Cultivated crops are called emblements. They are considered part of the land until they are harvested. Then, they become personal property. The sale of growing crops is governed by the provisions of the Uniform Commercial Code.

Most parcels of land in U.S. are defined by one of three methods [2.14]

1. Metes and bounds 2. Rectangular survey system 3. Lot and block

5 major rights (puede) [2.8]

1.Right of possession 2.Right to control the property's use 3.Right of enjoyment of the property 4.Right to dispose of the property 5.Right to exclude others from the property

6.06 rods: [2.16]

100 feet

1 foot: [2.16]

12 inches

(QUIZ 2.17) The S 1/2 of the NW 1/4 of the SE 1/4 contains how many acres

20 acres. 640 acres in a section x 1/2 x 1/4 x 1/4

1 yard: [2.16]

3 feet or 36 inches

1 league: [2.16]

3 miles

A township is composed of [2.16]

36 sections. One standard section is one square mile, which contains 640 acres. A section may be further divided.

1 furlong: [2.16]

40 rods

1 acre: [2.16]

43,560 square feet

1 rod: [2.16]

5 ½ yards or 16 ½ feet

1 mile: [2.16]

5,280 feet, or 8 furlongs, or 320 rods, or 1,760 yards

(QUIZ 2.16) A section contains how many acres?

640

legal description [2.14]

A description of a specific parcel of real estate complete enough for an independent surveyor to locate and identify it.

guide meridian [2.15]

A guide meridian is a line, marked by monuments, running North and South through a section of country between other more carefully established meridians called principal meridians, used for reference in surveying.

Community Property [2.4]

A holdover from Spanish law, a system of property ownership based on the theory that each spouse has an equal interest in property acquired by the efforts of either spouse during marriage.

metes and bounds description [2.14]

A metes and bounds description starts at a designated point, called the point of beginning. It then follows each boundary for a given distance, in a clockwise direction, and at a precise angle from the last point. The simplest type of description using metes and bounds would be to follow the dimensions of a tract *This system of land description is not often used in California, although it can be found in older documents.*

lot, block, tract (recorded plat) system [2.18]

A method of describing real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as specified on a recorded subdivision plat map. -The tract is the largest land area. The tract is divided into blocks, which are divided into lots.

plat map [2.18]

A plat map is a map of a town, section or subdivision indicating the location and boundaries of individual properties.

tier [2.15]

A strip of land six miles wide, extending east and west and numbered north and south according to its distance from the base line in the rectangular (government) survey system of legal description. Also known as a township strip.

subdivision [2.18]

A subdivision is any land that is divided or is proposed to be divided for the purpose of disposition into two or more lots, parcels, units or interests. Subdivision refers to any land, whether contiguous or not, of two or more lots, parcels, units or interests are offered as part of a common promotional plan of advertising and sale.

Rectangular Survey System [2.15]

A system established in 1785 by the federal government, providing for surveying and describing land by reference to principal meridians and base lines. Also known as the government survey system.

Spanish civil law [2.4]

A system of law codified by statutes.

Tests for a fixture A (MARIA) [2.12]

Adaptability of the thing for the land's ordinary use. The better adapted, the more likely it will be considered a fixture. A custom-fitted item, such as a swimming pool cover, would fall into this category.

Tests for a fixture A (MARIA) [2.12]

Agreement of the parties. If the parties are knowledgeable, they can avoid ambiguities by specifying in writing whether various items are fixtures or personal property and how those items will be affected by the transaction.

Appurtenances [2.11]

Appurtenant items belong to a property. For example, the garage is appurtenant to the house. Appurtenant items run with the land when the property is transferred. -Examples of appurtenances are some easements, rights-of-way, and condominium parking spaces. An appurtenance is said to "run with the land" because it is transferred when the land is transferred. An appurtenance could even be a passage for light, air, or heat from or across someone else's land. Stock in a mutual water company may be appurtenant to land. If it is, it can only be transferred with the land.

1850 [2.5]

California became a state

fructus industriales [2.11]

Corn, wheat and other crops that are produced annually by labor and industry, and not spontaneously. They are referred to in Latin as "fructus industriales." (See emblements)

correction lines [2.15]

Correction lines are provisions in the rectangular survey (government survey) system made to compensate for the curvature of the earth's surface. Also called guide meridians.

(QUIZ 2.4) California real estate law originated from

English common law.

fructus naturales [2.11]

Fructus naturales are the "natural fruits" of the land where they grow, such as such as timber and wild game. Under common law, fructus naturales are considered part of the real property, and not separate chattels in relation to any legal sale of the property.

(QUIZ 2.6) The diversity of California's population and economy makes the state unique compared to the rest of the country. Which statistic shows the greatest disparity between the state and the nation?

Home values

Fixtures on leased premises [2.12]

If a tenant has attached personal property to the premises, the property may be removed before the end of the lease term if: -it was installed for purposes of trade, manufacture, ornament, or domestic use; and -it can be removed without substantial damage to the premises.

Tests for a fixture I (MARIA) [2.12]

Intent in placing the item on the land. This is the most important consideration. The intent may be for reasons of health and safety rather than to improve the property, such as installation of a fire extinguisher.

metes-and-bounds [2.14]

Metes-and-bounds is a legal description of a parcel of land that begins at a well marked point and follows the boundaries, using directions and distances around the tract, back to the point of beginning.

Computing size of a parcel (2.17)

Method #1 — Multiply the last fraction by the number of acres in a section. Then, working backward, multiply your answer by each of the remaining fractions. Method #2 — This is a faster method, if you know how to multiply fractions. Multiply the fractions, then multiply that number by the number of acres in a section.

Tests for a fixture M (MARIA) [2.12]

Method by which the thing is affixed. The greater the degree of permanence in the attachment, the more likely it is a fixture. A wood gazebo on a concrete foundation is attached permanently; a screened enclosure fastened to the ground with tent stakes is not.

Mineral Rights [2.9]

Mineral rights are rights to the subsurface land and profits derived therein. Normally, when real property is conveyed, it includes everything above and below the surface of the land, except where specified by the grantor.

(QUIZ 2.3) Spanish settlement of California began with the establishment of

Missions.

(QUIZ 2.11) Are trade fixtures appurtenant to real estate?

No, trade fixtures do not transfer with the property.

Tests for a fixture R (MARIA) [2.12]

Relationship of the parties. If a residential tenant attaches something to the premises, there will be a presumption that it is personal property and removable by the tenant. The court favors tenant over landlord and buyer over seller.

section and township system [2.15]

Sections and townships are part of the rectangular (government) survey system of land description. A township is a division of territory that is six miles square, and contains 36 sections, each of which is one square mile. A township consists of 23,040 acres.

Computing land area [2.16]

The area of a parcel also can be computed using the rectangular survey system. Multiply the number of acres in a section by the fractional parts of a section described.

English common law [2.4]

The body of law based on custom, usage and court decisions. -property could be held in absolute ownership by individuals.

Bundle of Rights [2.8]

The concept of land ownership that includes ownership of all legal rights to the land, for example, possession, control within the law and enjoyment.

FOR EXAMPLE: [2.18] A developer sold a house located at 491 Rose Avenue, which is lot 28 of block 15 of the Tice Elms Subdivision, Walnut Creek, Contra Costa County, California. The subdivision map was recorded August 16, 1968, and can be found in book 38, on page 106. How would the property be described by the developer and in the deed to the buyer?

The developer would describe the property as 491 Rose Avenue, Tice Elms Subdivision, Walnut Creek, Lot 28, Block 15, Contra Costa County, California, as shown in Book 38, Page 106, recorded 08-16-1968. The deed the buyer receives would describe the property as Lot 28 Block 15, Tice Elms Subdivision (as recorded August 16, 1968, Book 38, Page 106 of maps), City of Walnut Creek, County of Contra Costa, State of California.

(QUIZ 2.5 )Which event is arguably the most important single event with respect to the exploration and settlement of the western frontier and California?

The discovery of gold at Sutter's Mill

Land [2.9]

The earth's surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water. -includes the substances beneath the surface that extend to the center of the earth. These include oil, gas, and water, and they may be many times more valuable than the surface itself. Land also includes the airspace above the earth's surface for an indefinite distance upward.

Water Table [2.10]

The natural level at which water is located in a particular area, be it above or below the surface of the earth

Littoral Rights [2.10]

The rights of a landowner whose land borders a pond, lake or ocean shore-line where the body of water is non-flowing. Littoral rights extend to the mean high watermark of ocean or tidal waters.

Method of description [2.16]

The smallest area described is given first and the largest area last, so to find a parcel, you should work backward from the largest area described.

Underground Water Rights [2.10]

The theory of underground water rights that applies in California is known as the correlative theory. The correlative theory provides landowners with equal rights to use underground water for beneficial purposes, as long as they do not seriously deplete the water supply of their neighbors. In the event of a water shortage, courts may apportion the underground water supply among landowners.

township [2.15]

Townships are part of the rectangular (government) survey system of land description. A township is a division of territory that is six miles square, and contains 36 sections, each of which is one square mile. A township consists of 23,040 acres.

Percolating Water [2.10]

Underground water that is not confined to a defined stream

A mutual water company may be formed when [2.10]

a subdivision is created and is owned by individual lot owners, who are its shareholders. An adequate potable water supply and distribution system for domestic use and fire protection must exist, and other requirements of the Corporations Code, starting at Section 14310, must be met if the mutual water company was created on or after January 1, 1998.

Fixtures [2.11]

an article of personal property that has been so affixed to real estate that it has become real property. -can be attached by its roots (trees or shrubs) or imbedded in the land (walls). A fixture might also be something permanently resting on the land, such as a building. A building would include all things customarily considered permanently attached to it, such as siding, plaster, nails, doors, and windows.

fixtures [2.12]

an article of personal property that has been so affixed to real estate that it has become real property. i.e. anything attached to land

bounds [2.14]

are natural or artificial boundaries, such as rivers and roads. Single monuments, or markers, such as rocks, fences, iron pipes, or other natural or artificial objects also may be used. *If an angle of measurement is given, it will be based on the degree of deviation from either north or south*

(QUIZ 2.13) While ownership of real property is usually transferred by deed, ownership of personal property usually is transferred by

bill of sale.

(QUIZ 2.9) The classical definition of property ownership is ownership of

everything below the property in the shape of an inverted pyramid with its apex at the center of the earth and infinite airspace.

Board of Land Commissioners [2.5]

formed by Congress in 1851 to settle claims to private land in California. *FUN FACT: Most of the Mexican land grants were upheld, to the dismay of numerous squatters.*

(QUIZ 2.18) A method of land description where each parcel in a subdivision is identified by tract, lot, and block numbers is called

lot and block.

(QUIZ 2.7) A large, densely populated metropolitan area, consisting of a number of major urban areas is referred to as a(n)

megalopolis.

townships run [2.15]

north-south in groups called tiers (think of the tiers of a wedding cake) and east-west in groups called ranges (think of a vertical slice of cake layers)

CA property can be classified as either [2.8]

real property or personal property.

(QUIZ 2.15) A system providing for surveying and describing land by reference to principal meridians and base lines is known as the

rectangular survey system.

metes [2.14]

refers to distances, which may be measured in inches, feet, yards, or rods.

(QUIZ 2.10) The rights of a landowner whose property line touches on a river or other flowing stream are called

riparian rights.

Right of Appropriation [2.10]

the right of the government to take, impound, or divert water flowing on the public domain from its natural course for some benefit to the public.