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California Real Estate Principles

Unit 1

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Key topics in this unit:

• The difference between real property and personal property

• The three legal/formal methods of land description

• How the government controls land use

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The Nature, Description, and Use of Real Estate

Unit 1

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I. REAL ESTATE/REAL PROPERTY

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I. REAL ESTATE/REAL PROPERTY

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I. REAL ESTATE/REAL PROPERTY

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I. REAL ESTATE/REAL PROPERTY

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I. REAL ESTATE/REAL PROPERTY

• Includes land plus appurtenances that benefit the land: improvements, rights and privileges, and fixtures

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A. Land

1. Surface rights

2. Subsurface rights

3. Air rights

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B. Improvements

1. Items attached to the land with the intent of being permanent

2. Examples: house, fence, road, landscaping

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Survey Question

Improvements are items affixed to the land with the intent of being permanent.

a. True

b. False

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Survey Question

Real estate includes land, improvements, and rights.

a. True

b. False

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C. Rights

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C. Rights

1. Air rights:

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C. Rights

1. Air rights:a) Government controls airspace

b) Owners may not interfere

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C. Rights

2. Water rights: The government controls water rights and

grants permits for beneficial use of water, such as irrigation, under the doctrine of prior appropriation

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C. Rights

a) Riparian – flowing water (R = River)

b) Littoral – standing water (L = Lake)

(Note: Both are often tied to navigation rights)

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C. Rights

c) Water rights do not include the right of access. The owner of a water right would not have the right to cross another’s property, and would need to obtain an easement to do so

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C. Rights

d) California has modified the rule of prior appropriation. The law states: all adjoining landowners have equal rights to the reasonable use of the water

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C. Rights

e) Land can be lost or gained through the action of water:(1) Sudden loss of land through natural

causes: avulsion

(2) Gradual loss of land through natural causes: erosion

(3) Addition to land through natural forces: accretion

(4) Taking title to additional property through accretion or attachment: accession

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C. Rights

f) Navigation determines ownership (1) If water is navigable, land owned to high-

water line

(2) If not navigable, land owned to center of waterway

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Survey Question

The natural process of increasing land from the deposit of soil is called accretion.

a. True

b. False

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Survey Question

Water rights with priority based on beneficial use rely on the doctrine of prior appropriation.

a. True

b. False

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C. Rights

3. Mineral rights:

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C. Rights

3. Mineral rights:a) May be transferred when property is sold or

reserved by seller

b) Often held by a third party

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C. Rights

4. Transfer of real estate:

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C. Rights

4. Transfer of real estate:a) Transferred by a deed

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Survey Question

Sale of a property always includes the mineral rights.

a. True

b. False

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C. Rights

5. Appurtenances: Anything that “runs” with the landa) Stock in a mutual water company

(1) Real property owners may create and operate a corporation to supply water to their land

(2) Shares of stock are issued to the owner of the real property

(3) The shares of stock are considered real property and cannot be sold separately

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II. PERSONAL PROPERTY (CHATTEL)

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A. All property that is not real property

Microwave, air conditioner

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B. Transferred by bill of sale

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III. LAW OF FIXTURES

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A. Fixture Defined

• An item of personal property that is attached to the land in such a manner as to be considered part of the real property

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B. Tests of a Fixture:

(Memory aid is M-A-R-I-A)

1. Method of attachment – Least important – permanence of method

2. Adaptability – Garage door openers and house keys are considered fixtures

3. Relationship of the parties to the object – Was the object installed by tenant or owner?

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B. Tests of a Fixture:

4. Intention – Was the object affixed or installed with the intent of improving the land?

5. Agreement – Most important

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C. Exceptions

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C. Exceptions

1. Trade or domestic fixturesa) Tenant-installed additions for purposes of

trade, ornament, or domestic useb) In absence of an agreement to the contrary,

tenant may remove anything tenant has affixed, prior to lease termination, and would be responsible for any damage caused by removal

c) If not removed, they belong to the landlord (through accession)

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C. Exceptions

2.

Emblements:

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C. Exceptions

2. Emblements: annually cultivated crops a) Property type determined by who planted

the crop: (1) Personal property if planted by a tenant

(2) Real property if planted by the owner of the land

b) Property sold with a lease will be sold “subject to” the lease and the crops would remain the tenant’s

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Survey Question

A countertop, attached stools, and other restaurant equipment would be considered trade fixtures.

a. True

b. False

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Survey Question

Emblements are growing crops, such as grapes and corn, which are produced annually through labor and industry.

a. True

b. False

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End of Part 1

Please continue with Part 2 of Unit 1