Real Estate Principles Flashcards
(86 cards)
1
Q
Treaty of Guadalupe Hidalgo
A
In 1848, the Treaty of Guadalupe Hidalgo ended
the war with Mexico, and California became a territory of the US.
2
Q
When did CA receive full statehood?
A
September 9, 1850
3
Q
Bundle of Rights
A
The rights that accompany ownership, designated by the law. Includes the right to own, possess, use, enjoy, encumber or borrow money on, dispose, and exclude those who do not share ownership of the property. Ownership rights are subject to government control
to promote public health, safety, and welfare (ex. zoning, building codes, and antidiscrimination laws).
4
Q
Real Property
A
Consists of:
- Land - surface, airspace above, materials and substances beneath to the center of the earth
- That which is affixed to the land - permanently resting, attached to a building, or attached by roots
- That which is appurtenant or incidental to the land - used by the land for its benefit and “goes with the land” (i.e. easements or stock in a water use company)
- That which is immovable by law.
5
Q
Water Rights
A
- Underground water - Water not confined to a well, a defined channel, or a water bed. Under the Concept of Reasonable Use, the landowner may take, in common with other owners, only his or her share of underground (percolating) waters for beneficial use.
- Riparian rights - Owners of land that borders on a river or another water course has no absolute ownership. Each owner has a personal right to an amount of water in proportion to the amount of land owned that borders the water course and in light of the needs of all interested parties.
- Right of appropriation - Right given to the state to give permission to a nonriparian owner to take water from a river or lake.
6
Q
Emblements
A
Growing vegetable crops. If they are the result of manual labor they are considered personal property. personal property/fructus industriales
7
Q
Fixtures
A
Items that were originally personal property but became real property because they were attached to the land in a manner as to be considered part of the land itself.
8
Q
Tests of a Fixture
A
- Method
- Adaptability
- Relationship
- Intention
- Agreements between the parties
9
Q
Trade Fixtures
A
Personal property attached by a business tenant because of need to be used in trade/business. Tenant has the right to remove these items and must repair any damages caused by removal. Ex. shelving, counters, cash registers
10
Q
Right of Appropriation
A
The right of a state to give permission to a nonriparian owner to take water from a river or lake.
11
Q
Rule/Law of Capture
A
Right to drill for oil or gas rests with the surface landowner or owner of the mineral rights. Once oil or minerals are brought to the surface, they are considered personal property.
12
Q
Personal Property
A
Movable property also known as chattels or choses. Ex. bonds, money, contracts, furniture, automobiles, and mortgages.
13
Q
Appurtenant to the Land
A
Third component of real property (transfers), used by and goes with the land. Ex. easements or stock in a mutual water company
14
Q
1 mile = __ feet or __ rods
A
1 mile = 5,280 feet or 320 rods
15
Q
1 acre = __ sq. ft.
A
1 acre = 43,560 sq. ft.
16
Q
1 sq. acre = __ feet
A
1 sq. acre = 208.71 feet
17
Q
Will
A
Legal instrument by which an 18+ person of sound mind disposes of property upon death. CA recognizes witnessed wills, holographic wills, and statutory wills. Also known as a testament.
18
Q
Witnessed Will
A
In writing and two witnesses
19
Q
Holographic Will
A
Handwritten and no witness
20
Q
Statutory
A
Preprinted form and approved by state
21
Q
Probate
A
A probate hearing identifies the creditors of the deceased and pays them off. If any property remains, the probate court determines identity of rightful heirs for distribution. Probate action takes place in superior court.
22
Q
When a property owner discovers a neighbor has built a structure on a portion of her property, how long does she have to bring an action against the neighbor?
A
Three years
23
Q
Chattels or Choses
A
Personal property
24
Q
Independent Administration of Estate Act
A
If all heirs agree in advance, the executor/administrator can sell the property directly to a specific buyer (sale still subject to court approval).
25
Intestate
No will, property divided into separate property and community property.
Separate property - Spouse and one child split half or spouse gets one-third and 2+ children split the rest or next of kin
Community property - All goes to surviving spouse (nothing to children)
26
Accession
Acquire title to property that is added to your existing real estate. Examples: accretion, avulsion, addition of fixtures, and improvements made in error.
27
Accretion
Gradual accumulation of soil on property bordering stream, river or ocean. The soil deposited is refered to as alluvion or alluvion deposits. The gradual wearing away of land by water and wind is erosion. Reliction occurs when the waterway, sea, or river recedes permanently below the usual water line.
28
Avulsion
When a river or stream during a storm or earthquake moves a part of the bank elsewhere. The owner of the part carried away and one year to reclaim it by applying some act of ownership such as cultivation of the soil.
29
Fixtures
Person affixes something to land within an agreement permitting removal. The thing affixed may then become the property of the landowner.
30
Improvements made in error
When someone in good faith erroneously affixes improvements to the land of another. In most cases, the person who made the improvements can remove them and pay the cost to restore.
31
Acquiring property by occupancy: real property can be gained through
Abandonment and adverse possession
32
Abandonment
Tenant leaves early, landland may be able to dispose of personal property left by tenant after due notification.
33
Adverse Possession
Acquire title without compensation. Five elements: actual open and notorious occupation, occupy hostile to owner's wishes, claim of right or color of title, continuous and uninterrupted possession for 5 years, and payment of all real property taxes for 5 years.
34
Types of Transfers
Private grant, public grant, gift, public dedication, and court action (involuntary transfer)
35
Examples of Court Action (Involuntary Transfer)
Partition action, foreclosure action, bankruptcy, escheat, and eminent domain
36
Partition Action
Court action where co-owners may sue other co-owners for severance of their respective interests.
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1 section = __ sq. mile or __ acres
1 section = 1 sq. mile or 640 acres
38
1 rod = __ ft.
1 rod = 16.5 ft.
39
Foreclosure
Court action where a person holding a delinquent lien on a property institutes proceedings requesting the forced sale of property. In CA, delinquent real estate loans are foreclosed using a trustee's sale.
40
Escheat
Court action where ownership of property reverts to the state due to lack or heirs or want of ownership.
41
Eminent domain
Court action where the state takes land from private owner by due process of law. Use of eminent domain is also known as condemnation proceedings. Must be taken for public use and the owner must be justly compensated.
42
Under CA law, what written instrument do you use to transfer ownership of real property?
Deed is used to transfer real property from a grantor to a grantee.
43
Essentials of a Valid Deed
In writing, parties correctly described, with a competent grantor and capable grantee, clear description, granting clause, and bearing the signature of the grantor. Deed is not effective unless it is delivered and accepted by the grantee.
44
Delivery of the Deed
Deed is not effective unless it is delivered and accepted by the grantee. Evidence of delivery (recording), must be delivered during the grantor's lifetime, deed is delivered is the date written on the deed or the date of delivery, delivery must be absolute (not subject to any conditions)
45
How much is a real estate broker allowed to keep of her money in a trust fund to handle bank account services?
Up to $200
46
Nonessentials in a Deed
Commonly has (but not required) an acknowledgement (formal declaration before officer stating signature is voluntarily given by correct person), a date, a recording number issued by the county
47
What Makes a Deed Void/Invalid?
1. Grantor is incompetent
2. Deed is signed in blank
3. Deed is not delivered
4. Forgery
5. Grantee nonexistant (fictitious or deceased)
6. Deed altered in escrow
48
Estate
The degree, quantity, nature, and extent of interest a person has in property.
49
Freehold Estate
Interest as an owner of real property. Freehold estates can be subdivided into fee estates and life estates. Also known as estates of inheritance because both fee simple and part of life estates are considered durable and capable of being transferred by inheritance upon death.
50
Fee Simple Absolute
Type of fee estate where the owner holds without any qualifications or limitations such as private deed restrictions. Highest form of interest an individual can have in land.
51
Fee Simple Quantified
Type of fee estate. Defeasible. Owner holds subject to special conditions, limitations, or private deed restrictions.
52
Life Estates
Created by deed or will for the life of one or more designated human beings. The life tenant has the rights of possession or income during the life of the designated person(s). However, the holder of a life estate cannot deed or lease a property beyond the life of the designated person.
53
Estate in Remainder
Person receives estate upon death of the life estate holder when the person granting the life estate designates that the title goes to them.
54
Less-than-freehold Estates
Interests held by tenants who rent or lease property.
55
Ownership in Severalty
Person acquires real property and holds title solely in their own name.
56
Concurrent Ownership
When two or more people hold title together. Ex: joint tenancy, tenancy in common, community property, and tenancy in partnership
57
Joint Tenancy
Two or more are joint and equal owners of the same undivided interest in real property. Involves right of survivorship. Four unities: time, title, interest, and possession. Also, cannot will your interest, interest is undivided (everyone can use all of it), can sell or convey interest without approval of others (create tenancy in common), can't be a corporation (because a corp never "dies"), and surviving tenant acquires the interest of the deceased join tenant free from debts created by deceased joint tenant.
58
Right of Survivorship
If one dies, the other(s) acquire. Part of joint tenancy.
59
Tenancy in Common
Two or more are owners of an undivided interest.
1. No right of survivorship (interest passes to heirs), which requires a probate proceeding
2. Can hold unequal interests
3. Equal rights of possession and pay share of expenses (ex. taxes)
4. Can will interest to heirs, who will become tenants in common upon death
5. Each co-tenant can sell, convey, or encumber interest without consent of others tenants
60
Tenancy in Partnership
Two or more pool interests, assets and efforts in a business venture where they share in profits or losses. Includes general and limited partnerships.
1. Can only use for business unless other partners agree to the personal use.
2. Partner's right is not assignable except in connection with assignment of rights of all partners.
3. Partner's right is not subject to attachment or execution, except on a claim against the partnership.
4. Form of survivorship: Survivor receives title of trust until the disposition of the property (only long enough to carry on the business for winding up partnership affairs)
61
Limited Liability
If all legal requirements have been met the limited partners can only lose their investment and cannot be held liable for partnership debts. Under a limited partnership, one or more general partners have unlimited liability and some limited partners have limited liability.
62
Community Property
All property acquired during a valid marriage or registered domestic partnership. Exceptions: All property owned before can remain separate property as long as it is not commingled with community property, property acquired by gift or inheritance as not as it is not commingled with community property, all income and profits from separate property as long as it's not commingled. Upon death: special probate, right to will, intestate goes to surviving spouse or partner, after July 2001 optional right of survivorship. Each can dispose by will to whoever they want. If either dies intestate, the other receives everything.
63
Community Property with Right of Survivorship
Upon death of one spouse or partner, the surviving spouse/partner receives title without probate.
64
Encumbrance
Anything that burdens the owner's title with a legal obligation. Two categories: nonmoney (physical) and money
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Nonmoney Encumbrances
Affect the physical condition or use. Ex: easements, public and private restrictions, and encroachments.
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Money Encumbrances
Property is held as security for repayment of debt. Ex: real estate loans and property taxes
67
Easement
Right to enter or use another's property (or portion) within certain limitations without paying rent or being considered a trespasser. Most common in CA is right-of-way, an easement for ingress and egress the property.
68
Dominant Tenement and Servient Tenement
Used in connection with right-of-way easement. Dominant tenement benefits from the use of the easement and servient tenement owns the property subject to the easement.
69
Party Wall
Dividing partition between two adjoining buildings/units that is shared by the tenants of each residence or business.
70
Easement Appurtenant
When an easement "runs with the land" and is considered real property.
71
Easement in Gross
Easements that do not have a dominant tenement. Ex. Utility company erects strings over private lands
72
Creation of Easements
Necessity/implication (landlocked), dedication (public access), deed (most common), condemnation (public access), prescription (four requirements: openly use, continuous for 5 years, hostile to owner's wishes, claim of right or color of title)
73
Termination of an Easement
1. Deed - most common, express release, usually issues a quitclaim deed to the servient tenement owner which extinguishes the easement
2. Quiet title action - Establish title against adverse claims to real property or any interest in the property by court proceedings
3. Dominant tenement becomes the owner of the servient tenement property, terminated by merger of title
4. File formal abandonment
5. Prescription easement nonuse for five years
74
Private Deed Restrictions
A seller of property can place in a deed covenants, conditions and restrictions (CC&Rs) on the use of the property being sold.
1. Covenant - Promise/agreement on the part of the individual accepting it to do or not to do certain things (if violated grantor may sue for $ or or get an injunction against the grantee prohibiting continuation of the violation of the promise)
2. Condition - Restriction that places a limitation on the grantee's (buyer's) ownership (If violated the grantor may have right to demand forfeiture of the grantee's title to the property)
75
Covenant vs Condition
Both are private deed restrictions. Main difference is the degree of punishment if a violation occurs. If a condition is violated, grantor may have the right to demand grantee's forfeiture of the property. Violation of a covenant usually only allow money damages or cease-and-desist order
76
Encroachments
Physical nonmoney encumbrance. An encroachment is the wrongful construction of a building or an improvement on or over the land of another. The Statute of Limitations states the party whose land is encroached upon has 3 years to bring action for the removal. Exceptions include a neighbor's branch extending into you airspace.
77
Lien (4 Types)
Money encumbrance where a specific property is held as security for the payment of a money debt.
1. Voluntary lien - freely accepted by property owner (ex: mortgage or deed of trust, which an owner signs when obtaining a real estate loan)
2. Involuntary lien - imposed by law that the owner does not freely accept (ex: mechanics' liens, tax liens, attachments, and judgement liens)
3. General lien - Applies to all property of an owner unless exempt by law (ex. income tax and judgement liens)
4. Specific lien - Lien against a particular single piece of property (ex: mortgages, trust deeds, taxes on real property, and mechanics' liens)
78
Mechanics' Liens
Lien (specific lien) created by a statute that exists against real property in favor of persons who have performed work or furnished materials for the improvement of the real estate. Must be based on a valid (written or verbal) contract. Mechanics to give written notice to owner of right to file lien if they are not paid within 20 days of the first furnishing of labor (failure does not preclude right to give preliminary notice later but claim rights may be subordinated to other claims.
79
Tax Liens
When a person does not pay taxes when they are due and their property is encumbered to ensure payment. May include unpaid property taxes, income taxes, estate taxes, gift taxes. Government has the right to place a lien against the taxpayer's property and foreclose upon the property for back taxes.
80
Special Assessments
Levied against property owners in a certain assessment district. Purpose is to defray cost of specific local improvements (streets, sewers, schools). If someone refuses to pay the assessment, government and/or bondholders can foreclose upon the assessee's property.
81
Attachment
Legal process where personal or real property is seized pending the outcome of court action. Defendent can still keep property during this time but a notice is posted on the property and the attachment is recorded. Much of the property is exempt from attachment (personal residence, debtor's wages, etc) that the use of attachment has declined in recent years so now many creditors go directly for a judgement.
82
How long does a judgement lien usually run?
10 years
83
Writ of Execution
Requested by creditor to collect on a judgement. Court orders sheriff to seize and sell the property to satisfy the judgement. Public auction is held where property is sold to the highest bidder.
84
Homestead
Personal dwelling
85
Formal Declared Homestead
Requires owner to correctly complete and file a homestead document at the county recorder's office.
1. Must be recorded showing claimant is head of family
2. Statement declares claimant is residing on premises
3. Statement has description of premises, only one homestead exemption at a time
86
Dwelling Home Exemption
Automatic homestead available to all who have not previously filed a document at the county recorders office.
