David Cusic - California Real Estate License Express: All-in-One Review and Testing to Pass Californias Real Estate Exam

Material in this book is not intended to represent legal advice and should not be so construed. Readers should consult legal counsel for advice regarding points of law.

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California
Real Estate
License
Express

All-in-One Review and Testing to Pass Californias Real Estate Exam
2nd Edition

David Cusic
Stephen Mettling
Ryan Mettling

Performance Programs Company
502 South Fremont Ave., Ste. # 724
Tampa, FL, 33606
www.performanceprogramscompany.com

Land:

• surface, all naturalthings attached to it, subsurface, and air above the surface

Real estate:

• land + manmade permanent attachments

Real property:

• real estate + bundle of rights

Constitution guarantees private ownership of real property.

Physical characteristics

• Immobility; indestructibility; heterogeneity.
  

Immobility

• Land cannot be moved from one site to another; its location is forever fixed

Indestructibility

• Land is permanent and cannot be destroyed since by definition it extends below ground and into the sky
• Since land is permanent, it does not depreciate
• Only improvements depreciate and are insurable

Non-homogeneity

• Land is non-homogeneous; no two parcels of land are exactly the same since they have a different location

Land versus Real Estate

The Bundle of Rights:

"PUTEE":

P ossess
U se
T ransfer
E xclude
E ncumber

Legal title

• Full legal ownership of property and the bundle of rights as they apply to it. Contrasts with equitable title.

Equitable title

• An interest that gives a lienholder or buyer the right to acquire legal title to a property if certain contractual conditions occur

Property characteristics:

• property is either real or personal
• property is either tangible or intangible

Airspace = air rights

Surface (of the earth) = surface rights

Subsurface = subsurface or mineral rights

Water rights:

Doctrine of Prior Appropriation

• State controls water usage
  
• State grants usage permits
  

Riparian Rights (Rivers and Streams)

• applies to rivers and streams
• if waterway is navigable: owners own land to water's edge
• if waterway is not navigable: owners own land to midpoint of waterway

Littoral Rights (Lakes and Seas)

• applies to seas and lakes
• abutting property owners own to high water mark
• state owns underlying land

Memory Tip:

R: River Riparian

L: Lake Littoral

Real Property:

• land
• fixtures
• attachments

Personal Property:

• chattels
• trade fixtures
• emblements

Differentiation criteria: item is real or personal property depending on why, how item is attached to the real estate. Depends on the owners'

• intention; adaptation; functionality; relationship of parties; contract provisions

Trade fixtures:

• personal property items temporarily attached to real estate in order to conduct business

Emblements:

• plants or crops that are considered personal property despite being attached to land

Conversion:

• real to personal property referred to as severance
• personal to real property referred to as affixing

Factory-built housing mobile homes and manufactured homes

• Units are real or personal property:
• • Real property if permanently affixed to ground; otherwise it is personal property

Federal regulation

• Grants rights of ownership
• Controls broad land usage standards
• Regulates anti-discrimination laws
• • Examples: land grants; federal flood zones; fair housing laws; FHA; EPA

State regulation

• Governs real estate business
• Sets regional usage standards
• • Examples: license laws; water rights; development regulation

Local regulation

• Levies real estate taxes
• Controls specific usage
• • Examples: property assessing; zoning; building permits; tax levies

Judicial regulation

• Applies case law and common law to disputes
• Contrasts with statutory law

Possession / Possessory

• Estate in land

Non-possession / Non-possessory

• Private: Encumbrance
• Public: public interest

Freehold (Own)

• Fee simple
• • Absolute
  • Defeasible
• Life Estates
• • Conventional
  • Legal

Leasehold (Lease)

• Estate for years
• Periodic
• Estate at Will
• Estate at Sufferance

Fee simple

• not limited by one's lifetime
• absolute: highest form of ownership interest
• defeasible: reverts to previous owner per conditions

Life estate

• passes to another upon death of a named party
• remainder: named party to receive estate
• reversion: previous owner to receive estate

Conventional life estate

• limited to lifetime of life tenant or named party
• ordinary: estate passes to remainderman or previous owner when life tenant dies
• pur autre vie: limited to lifetime of another, passes to remainderman or previous owner

Legal life estate

• created by operation of state law as opposed to a property owners agreement
  
• designed to protect family survivors

Homestead:

• rights to one's principal residence
  
• laws protect homestead from creditors
  
• family must occupy the homestead
  
• cannot be conveyed by one spouse
  
• endures over life of head of household
  
• interests extinguished if property destroyed
  

Estate for years

• specific, stated duration, per lease; expires at end of term