California Real Estate Principles 10 1 Edition Chapter

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California Real Estate Principles, 10. 1 Edition Chapter 2: Introduction to Real Estate ©

California Real Estate Principles, 10. 1 Edition Chapter 2: Introduction to Real Estate © 2016 On. Course Learning

Chapter 2 • Trace the history of real property ownership in California • List

Chapter 2 • 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 © On. Course Learning

California History • Native Americans- First inhabitants- Missionaries converted • Explorer Vasco Nunez de

California History • Native Americans- First inhabitants- Missionaries converted • Explorer Vasco Nunez de Balboa (1513)- sighted Pacific Ocean and claimed for Spanish King & Queen. • Under Spanish rule (1542 -1822) – San Diego: 1 st settlement, by Juan Cabrillo • Spanish developments (1769)- classified as: – Forts = presidios Villages = pueblos (agri-towns)- food – Land grants = ranchos – granted to private citizens – – 21 Missions to spread Christianity • MEXICAN rule (April, 1822) • Mexican-American War (1846 -1848) Americans from the East- created tensions. • UNITED STATES rule – Treaty of Guadalupe Hidalgo (1848)- ended the Mexican-American War – California Statehood- (September 9, 1850)

California Real Estate • Board of Land Commissioners – Formed to settle private land

California Real Estate • Board of Land Commissioners – Formed to settle private land claims- prior rancho owners – Recording 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 Los Angeles, San Diego, Sacramento, San Francisco Bay Area © On. Course Learning

Real Estate can refer to the industry or profession as well as the physical

Real Estate can refer to the industry or profession as well as the physical sense of land buildings, known as Real Property. © On. Course Learning

BUNDLE OF RIGHTS* 1. 2. 3. 4. 5. 6. Includes the right to: Own

BUNDLE OF RIGHTS* 1. 2. 3. 4. 5. 6. Includes the right to: Own and possess Use Enjoy Encumber or borrow against Dispose Exclude others who do not share ownership *Subject to government controls

Property Rights Do NOT Include the Right to: Destroy Why? • Loss of value

Property Rights Do NOT Include the Right to: Destroy Why? • Loss of value to neighboring property • Environmental, Health & safety issues on tear downs

Property Ownership • Is neither absolute nor unlimited • Is subject to ( examples

Property Ownership • Is neither absolute nor unlimited • Is subject to ( examples of how the government controls property rights): – Zoning and building codes – Fair housing and antidiscrimination – Health & safety regulations – Police power – Permits and licenses – Public interest issues

Definition: Real Estate • LAND • AFFIXED TO LAND • APPURTENANT TO LAND •

Definition: Real Estate • LAND • AFFIXED TO LAND • APPURTENANT TO LAND • IMMOVABLE BY LAW

REAL PROPERTY is LAND: • LAND includes: – Earth’s surface • lateral support •

REAL PROPERTY is LAND: • LAND includes: – Earth’s surface • lateral support • subjacent support – Materials under the surface • Substances, including water • Minerals, oil & gas

Air rights: above the surface • From earth’s surface to the Federal Aviation (FAA)

Air rights: above the surface • From earth’s surface to the Federal Aviation (FAA) floor

Mineral Rights • Oil and Gas Rights – Rule of Capture – Rule of

Mineral Rights • Oil and Gas Rights – Rule of Capture – Rule of Extraction

Water Rights • Riparian – borders steam or lake • Littoral – borders shore

Water Rights • Riparian – borders steam or lake • Littoral – borders shore of sea or ocean • Doctrine of Correlative Use – Underground water • Prior Appropriation

Water Rights: §Different states have different laws: - Appropriation water right –Owner has exclusive

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 improvements Attached –

Property Affixed to the land: • • • Affixed – Building improvements Attached – Landscaping attached by roots Incidental – Utility pipes Attachments – Fence Easements – Right of way Fixtures – Patio cover

Appurtenances • Easements • Stock in a mutual water company

Appurtenances • Easements • Stock in a mutual water company

Immovable by Law If an object is not allowed to be moved from the

Immovable by Law If an object is not allowed to be moved from the land it is resting on, then it is a part of that property as a matter of law. © On. Course Learning

PERSONAL PROPERTY is everything that is NOT real property • Chattel - Chose •

PERSONAL PROPERTY is everything that is NOT real property • Chattel - Chose • Movable goods • Paper Documents about real property: money, stocks, contracts, deed, lease, promissory note • Transferred by a Bill of Sale • EMBLEMENTS – Annual cultivated crop

Real OR Personal property? Real property can become personal property Personal property can become

Real OR Personal property? Real property can become personal property Personal property can become real property • REAL Property • PERSONAL Property

TEST OF A FIXTURE M ethod of Attachment A daptability for Ordinary Use R

TEST OF A FIXTURE M ethod of Attachment A daptability for Ordinary Use R elationship of the Parties I ntent of the Parties A greement Between the Parties w. NOTE: The law favors the lender over a borrower, a buyer over a seller, and the tenant over the landlord.

TRADE FIXTURE • Personal property of a business affixed or annexed to the real

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