Post on 04-Jan-2016
Principles of California Real Estate
Lesson 1: Lesson 1:
The Nature of The Nature of
Real PropertyReal Property
Lesson 1: Lesson 1:
The Nature of The Nature of
Real PropertyReal Property
Real Property vs.
Personal Property
Two types of property: Real property (“realty”) Personal property (“chattels” or
“personalty”)
Real PropertyBundle of rights
= A bundle of A bundle of property rightsproperty rights
Real property Real property ownershipownership
Possess Use Enjoy Encumber
Will Sell Do nothing at all
Real PropertyInverted pyramid
Imagine a parcel of land as an inverted pyramid
Summary Basic Concepts
Real property Personal property Bundle of rights Inverted pyramid
Real PropertyAppurtenances
Appurtenance: Something that goes with or pertains to ownership of a piece of real property, but isn’t necessarily a physical part of the property.
Appurtenances
Air rightsAir rights
Water rights
Mineral rights
Support rights
AppurtenancesAir rights
Air rights: Landowner has the right to use the airspace above the property, within limitations imposed by law.
AppurtenancesAir rights
Air rights: Landowner has the right to use the airspace above the property, within limitations imposed by law.
Example: Aircraft flight paths
Air RightsRestrictions on air rights
Federal aviation laws Local laws and private restrictions
Air Rights
Air rights can be sold separately from the land (makes condominiums possible).
Air rights Water rightsWater rights Mineral rights Support rights
Appurtenances
AppurtenancesWater rights
Two systems for allocating water rights:
AppurtenancesWater rights
Two systems for allocating water rights: Riparian rights system
AppurtenancesWater rights
Two systems for allocating water rights: Riparian rights system Prior appropriation system
AppurtenancesWater rights
Two systems for allocating water rights: Riparian rights system Prior appropriation system
Either system can be applied both to surface water and to subsurface water.
Water RightsRiparian rights system
Riparian rights: Landowner has the right to use the water that touches her property.
Water RightsRiparian rights system
Two types of water in riparian rights system: Riparian water = flowing water Littoral water = standing water
Water RightsRiparian rights system
Two types of water in riparian rights system: Riparian water = flowing water Littoral water = standing water
Water may be used only on the riparian or littoral property itself.
Water RightsPrior appropriation system
Prior appropriation system was developed to address needs that were not served by the riparian system, particularly in arid areas.
Water RightsPrior appropriation system
Prior appropriation system was developed to address needs that were not served by the riparian system, particularly in arid areas.
In some states, including California, it has largely replaced the riparian rights system.
Water RightsPrior appropriation system
Permit required for appropriative rights.
Water RightsPrior appropriation system
Permit required for appropriative rights.
Permit holder can take or divert water from a particular source for a specified reasonable and beneficial use.
Example: Irrigation
Air rights Water rights Mineral rightsMineral rights Support rights
Appurtenances
AppurtenancesMineral rights
Mineral rights: A landowner has the right to extract any solid minerals located within the property’s inverted pyramid.
Mineral Rights
Minerals are: Real property when in the ground
Mineral Rights
Minerals are: Real property when in the ground Personal property once extracted and
brought to the surface
Mineral RightsOil and gas
Special rule for oil and gas:
Rule of capture
Air rights
Water rights
Mineral rights
Support rightsSupport rights
Appurtenances
AppurtenancesSupport rights
Support rights: Natural support provided to a piece of land by the surrounding land.
AppurtenancesSupport rights
Support rights: Natural support provided to a piece of land by the surrounding land.Subjacent support – provided by
the underlying earth.
AppurtenancesSupport rights
Support rights: Natural support provided to a piece of land by the surrounding land.Subjacent support – provided by
the underlying earth.Lateral support – provided by the
neighboring land.
SummaryAppurtenances
Appurtenance Air rights Water rights Riparian rights Littoral rights
Prior appropriation Mineral rights Rule of capture Support rights
Attachments
Attachments: Things that are permanently attached to the land.
Attachments
May be natural or manmade
Attachments: Things that are permanently attached to the land.
Attachments
May be natural or manmade Are considered part of the real estate
Attachments: Things that are permanently attached to the land.
AttachmentsNatural attachments
Natural attachments: Includes trees, bushes, and other plants: growing things that are attached to the land by roots.
Natural AttachmentsDoctrine of emblements
Doctrine of emblements: Crops produced by cultivated plants are classified as personal property, even before they are harvested.
Natural AttachmentsDoctrine of emblements
Doctrine of emblements: Crops produced by cultivated plants are classified as personal property, even before they are harvested.
Applies to crops planted by a tenant farmer.
Natural AttachmentsSeverance
Severance: Natural attachments can be “severed” from the land and sold separately.
AttachmentsFixtures
Fixtures: Manmade attachments to real property.
AttachmentsFixtures
Fixtures: Manmade attachments to real property.
Items that were once personal property.
AttachmentsFixtures
Fixtures: Manmade attachments to real property.
Items that were once personal property.
Now attached to or connected with real property in such a way that they have become part of the real property.
AttachmentsDistinguishing fixtures from
personal property
Four common legal tests: Method of attachment Adaptation of the item Intention of the parties Relationship of the parties
AttachmentsDistinguishing fixtures from
personal property
Four common legal tests: Method of attachment Adaptation of the item Intention of the parties Relationship of the parties
If a written agreement exists, it normally controls whether an item
is considered a fixture.
Fixture TestsMethod of attachment test
Test 1: Is the item attached to the realty in some
way, and if so, how? Is the item movable?
Fixture TestsAdaptation test
Test 2: Has the item been specially adapted to the
realty in some way, or specially designed for it?
Fixture TestsIntention test
Test 3: Did the person who installed the item intend
it to become part of the realty?
Fixture TestsRelationship test
Test 4: Did the person who installed the item own
the property, or was he just a tenant?
Fixture TestsRelationship test
Test 4: Did the person who installed the item own
the property, or was he just a tenant?An item installed by a tenant is typically
considered personal propertyAn item installed by an owner is typically
considered real property
Fixture TestsTrade fixtures
Trade fixtures: Equipment and other items that a commercial tenant installs to carry on a business.
Fixture TestsTrade fixtures
Trade fixtures: Equipment and other items that a commercial tenant installs to carry on a business.
Trade fixtures aren’t considered part of the real property, no matter how they’re attached.
FixturesMobile homes
A mobile home is personal property until permanently attached to a piece of real estate.
FixturesMobile homes
A mobile home is personal property until permanently attached to a piece of real estate.
Once attached to a piece of real estate, a mobile home is a fixture and part of the real property.
SummaryAttachments
Attachments Natural attachments Doctrine of emblements Fixtures Fixture tests Severance
Methods of Legal Description
Legal descriptions allow precise identification of a piece of real property.
Methods of Legal Description
Metes and bounds (most difficult to use) Government survey Recorded map
Legal descriptions allow precise identification of a piece of real property.
Three main methods of legal description:
Methods of Legal DescriptionMetes and Bounds
Metes and bounds description: Describes a piece of land by specifying its boundaries.
Methods of Legal DescriptionMetes and Bounds
Metes and bounds description: Describes a piece of land by specifying its boundaries.Monuments – Natural or manmade
objects that mark a fixed point.
Methods of Legal DescriptionMetes and Bounds
Metes and bounds description: Describes a piece of land by specifying its boundaries.Monuments – Natural or manmade
objects that mark a fixed point.Courses – Compass directions.
Methods of Legal DescriptionMetes and Bounds
Metes and bounds description: Describes a piece of land by specifying its boundaries.Monuments – Natural or manmade
objects that mark a fixed point.Courses – Compass directions.Distances – Length of each boundary.
Most difficult method to use when describing property
Methods of Legal DescriptionMetes and Bounds
Metes and bounds description: Describes a piece of land by specifying its boundaries.Monuments – Natural or manmade
objects that mark a fixed point.Courses – Compass directions.Distances – Length of each boundary.Most difficult method to use when
describing propertyThe point of beginning must always be described by reference to a monument.
Reading aMetes and Bounds Description
Starts with the point of beginning, then gives the course (direction) and distance for each leg of the boundary, until it has described the full circuit and arrived back at the point of beginning.
A description of this property would read: “Beginning at the old oak tree, go South 15° East 200 feet. Then go North 90° West 310 feet, more or less, to the centerline of Smith Creek. Then go northwesterly along the centerline of Smith Creek to a point due west of the old oak tree. Then go North 90° East 430 feet, more or less, to the point of beginning.”
Methods of Legal DescriptionGovernment survey
Government survey description: Property is identified by its location in a particular section, township, and range on a U.S. government survey map.
Also called a rectangular survey description.
The government survey system is made up of a series of very large survey grids covering much of the United States, including California.
Government Survey DescriptionsPrincipal meridian & base line
Each of the grids has its own: Principal meridian (main north-south line) Base line (main east-west line)
In California: Humboldt Meridian Mount Diablo Meridian San Bernardino Meridian
Survey grids are identified by the name of the principal meridian.
Government Survey DescriptionsRange & township lines
Each grid has grid lines running parallel to the principal meridian and to the base line at intervals of six miles.
Range lines divide the land into columns called ranges.
Each range is six miles wide.
The north-south lines are called range lines.
Township lines divide the land into rows called township tiers.
The east-west lines that parallel the base line are called township lines.
Government Survey DescriptionsTownships
Each individual square is called a township. A particular township is identified by its
position in relation to the base line and the principal meridian.
6 miles 6 miles × 6 miles× 6 miles
36 square miles36 square miles
Township =Township =
The location of the township on the screen is “Township 4 North, Range 5 East.”
It is the township created by the intersection of the fourth township tier north of the base line and the fifth range east of the principal meridian.
Government Survey DescriptionsSections
Each township is divided into 36 sections. Each section is one mile on each side, or
one square mile. Each section is 640 acres. (An acre
contains 43,560 square feet.)
The sections within a township are numbered from 1 to 36. Most individual parcels are only part of a section, so they are described in terms of fractions, such as quarter sections or quarter-quarter sections.
A complete government survey description must include the section, township, and range.
It must also include the name of the principal meridian, to identify the grid.
Methods of Legal DescriptionRecorded map
Recorded map description: The standard method for describing property in towns and cities.
Methods of Legal DescriptionRecorded map
The map is recorded by the developer when the land is subdivided.
Recorded map description: The standard method for describing property in towns and cities.
Methods of Legal DescriptionRecorded map
The map is recorded by the developer when the land is subdivided.
Also called the lot and block method or the plat map method.
Recorded map description: The standard method for describing property in towns and cities.
The subdivision is surveyed and a map is drawn up that shows the precise location and dimensions of each lot.
Methods of Legal DescriptionRecorded map
The subdivision is surveyed and a map is drawn up that shows the precise location and dimensions of each lot.
Each lot is assigned a lot number.
Methods of Legal DescriptionRecorded map
The subdivision is surveyed and a map is drawn up that shows the precise location and dimensions of each lot.
Each lot is assigned a lot number.
Groups of lots separated by streets within the subdivision may also be assigned block numbers.
Methods of Legal DescriptionRecorded map
Recorded Map DescriptionsPlat map
Plat: A map showing the lots and blocks in a subdivision.
Recorded Map DescriptionsPlat map
Plat: A map showing the lots and blocks in a subdivision.
Once the plat map is recorded, a parcel can be described by its lot and block numbers, the name of the subdivision, and the county or city in which it is located.
Typical recorded map description:
“Lot 7, Block 2, in the Lowland Heights subdivision, according to the plat thereof recorded at Vol. 22, Page 16, in the records of Alameda County, State of California.”
Recorded Map DescriptionsExample
Methods of Legal DescriptionOther methods
Other methods of describing land: A reference to a description in an earlier
recorded document.
Methods of Legal DescriptionOther methods
Other methods of describing land: A reference to a description in an earlier
recorded document. A reference to a survey or tax assessor’s
map that has been recorded.
Methods of Legal DescriptionOther methods
Other methods of describing land: A reference to a description in an earlier
recorded document. A reference to a survey or tax assessor’s
map that has been recorded. A generalized description, such as “all my
land in Orange County.”
Methods of Legal DescriptionOther methods
Other methods of describing land: A reference to a description in an earlier
recorded document. A reference to a survey or tax assessor’s
map that has been recorded. A generalized description, such as “all my
land in Orange County.”
Street addresses should never be used to describe land.
SummaryLegal Descriptions
Legal description Metes and bounds method Government survey method Recorded map method