Ownership Concepts - Part 1 - Chapters 31-33 Flashcards
Understand the origins of CA real estate law
CA real estate law has been influenced by the English legal system (common law) and the Spanish legal system (civil law).
- under COMMON LAW, legal disputes are decided on a case by case basis before a judge
- under CIVIL LAW, legal disputes are attempted to be settled by establishing elaborate statutes to address the issues in advance of the disputes.
Discuss the four main constitutional powers of the CA legislature to enact laws regulating RE activities
The authority of CA legislature to enact laws regulating real estate activities comes from FOUR main constitutional powers - knows as PETE.
- Police Power, the source of the state or local government’s authority to act on such things like hwy construction, rent control, zoning, traffic
- Eminent Domain Power, the right of the govt to take private property for public use.
- Tax Power, the right of the govt to impose taxes to generate revenue and fund state and local govt functions
- Escheat Power, the reverting of property to the state when the owner dies and there is no capable heirs to inherit it.
administrative agencies
As general real estate law becomes more specialized, the role of administrative agencies become increasingly important. Many Admin Agencies are given the powers of all three branches of govt.:
* Legislative
* Executive
* Judicial
The trend with ours is to continue to give Admin Agencies the necessary powers to judge cases involving their own regulations. Thus the courts themselves are relieved of processing and resolving these disputes.
civil law
While less influential, the CIVIL LAW of Spain has had a significant impact on CA real estate law. Civil Law attempts to settle legal disputes by establishing elaborate statutes to address the issues in advance of the disputes, rather than on a case by case basis.
common law
The Common Law of England has been the predominate influence on CA real estate law. This legal frame work was officially adopted by CA soon after obtaining statehood in 1850. Under Common Law, legal disputes are decided on a case by case basis before a judge. Even today, common law is often called “judge-made” law. When similar legal disputes rise, the judges refer back to earlier decisions to decide current cases. The reliance on an earlier decision to decide a current case is called STARE DECISIS. The earlier case relied on is called PRECEDENT.
P - police power
The first constitutional power of the CA legislature to enact laws is Police Power. Police Power is the basis for enacting local ordinances such as hwy construction and maintenance, rent control, zoning, traffic.
A statute or ordinance passed under the state or local govt constitutional police power and affecting RE related activity is valid as long as the law:
- is fair and reasonable
- addresses a legitimate state interest
- does not unreasonably burden the flow of interstate commerce
- does not conflict with related federal law
E - eminent domain
The second key constitutional power of the CA legislature to enact laws is Eminent Domain. ED is the right of the govt to take private property for public use on payment to the owner of the property’s fair market value. The process of using the eminent domain power is called, CONDEMNATION. Examples of ED include condemning property to:
- provide highways and roads
- establish parks
- construct flood control levees
- provide land for redevelopment
T - tax power
E - escheat power
The third key constitutional power of the CA legislature gives state and local govts the ability to regulate the crucial power to TAX Real estate activities to generate revenue and fund state and local governmental functions under their police power.
Note - voter approval is only required when fees and taxes are imposed on the owners simply because they own real estate. Fees and taxes imposed on the owner’s exercise of their use and right which come from owning the property do not require voter approval. (example, an ordinance is enforceable without voter approval since the fee is imposed on the USE of the property - renting- not on the mere ownership of the property itself).
Voter approval is NOT REQUIRED when a tax is based on the USE of real estate
Voter approval is REQUIRED when a tax is based on simply owning the real estate
Eschete power is govt ability to take property if no known heir is found after someone dies.
Distinguish between personal property and real estate
Property can be broadly defined, focusing on the RIGHTS which arise out of the object. Thus, property is referred to as a BUNDLE OF RIGHTS in a thing, which for the purposes of this material is Real Estate. Property is anything that can be owned. In turn OWNERSHIP is the right to possess the property owned and use it to the exclusion of others. The right to posses and use property includes the right to:
- occupy
- sell or dispose
- encumber
- lease the property
Property is divided into two primary categories:
- REAL ESTATE, also called real property, or realty is characterized as IMMOVABLE
- PERSONAL PROPERTY, also called personalty or CHATTEL is MOVABLE and is defined, by way of exclusion, as all property which is not classified as real estate.
Comprehend the physical characteristics of real estate
The physical components of real estate include:
- the raw land
- anything affixed to the land
- anything appurtenant (incidental rights in adjoining property) to the land
- anything which cannot be removed from the land by law
Understand a property’s appurtenant and riparian rights
Real Estate also includes incidental rights which are not located on the real estate nor reflected on its title, called Appurtenant Rights. Appurtenant Rights include the right of ingress and egress (entry and exit) across adjoining properties.
The right to use water is is an Appurtenant Right to the ownership of real estate. The right to USE WATER is called a RIPARIAN Right. Riparian rights refer to the rights of a real estate owner to take surface water from a running water source contiguous to their land, such as a river or stream.
Determine whether an item is a property fixture or a trade fixture
Real Estate also includes objects which are affixed to the land, such as FIXTURES. A fixture is personal property which has become permanently attached to real estate and is conveyed with it. They have a character of ‘Permanence’. Factors which determine whether an item is a fixture or a removable improvement include (and can be remembered by MARIA): I just met a fixture named MARIA!
- Manner of attachment
- Agreement between the parties
- Relationship of the parties
- Intention of the parties
- Adaptability of attachment to the real estate
The most important factor when determining whether an item is a fixture or improvement is the intent of the parties. Intent to make an item a permanent part of the RE as a fixture is determined by the:
- manner of attachment
- use and purpose of the item in dispute
Fixtures which are used to render services or make products for the trade or business of a tenant are TRADE FIXTURES. Trade fixtures are to be removed by the tenant on terminations of the tenancy, unless agreed to the contrary with the landlord or the removal would cause undue damage to the RE. In the case of a beauty salon, trade fixtures would include:
- mirrors
- dryers
- sink bowls and installed wash stations
appurtenant rights
Real Estate also includes incidental rights which are not located on the real estate nor reflected on its title, called Appurtenant Rights. Appurtenant Rights include the right of ingress and egress (entry and exit) across adjoining properties.
Example is an appurtenant easement held by an owner of one parcel of real estate to use adjoining real estate. Under an appurtenant easement, an owner’s right to use adjoining real estate is part of their real estate although it is not reflected on the title to the RE. Appurtenant right remain with the RE they benefit and do not transfer from person to person.
common interest development (CID)
A common interest development (CID) are condo projects, cooperatives or single family residences in a planned unit development. In a condo project, the air space between the walls is the Real Estate.
fixture
A FIXTURE is defined as personal property which has become ‘permanently attached’ to real estate. As it is permanently attached, it effectively becomes part of the real estate and is conveyed with it.
Factors which determine whether an item is a fixture or a removable improvement include (and can be remembered by MARIA):
- manner of attachment
- agreement between the parties
- relationship of the parties
- intention of the parties
- adaptability of attachment to the real estate
The most important factor when determining whether an item is a fixture or improvement is the intent of the parties. Intent to make an item a permanent part of the RE as a fixture is determined by the:
- manner of attachment
- use and purpose of the item in dispute
Example - when an item is attached to real estate by bolts, screws, cement or the like, the item is a fixture and part of the real estate. But they also don’t NEED to be attached in this manner, items of such weight and size that gravity maintains them in place are sufficient to give the item a character of permanence and affixation to be real estate.
