©2011 Cengage Learning
California Real Estate
Principles
Chapter 1
Introduction to Real Estate
©2011 Cengage Learning
Chapter 1
 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
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California History
 1. Native Americans
 2. Explorer Balboa (1513)
 3. SPANISH rule (1542-1822)
 San Diego: lst settlement, by Cabrillo
 4. Spanish developments (1769)
 Forts = presidios
Villages = pueblos
 Land grants = ranchos – 21 Missions
 5. MEXICAN rule (1822)
 6. Mexican-American War (1846-1848)
 7. UNITED STATES rule
 Treaty of Guadalupe Hidalgo (1848)
 Statehood (September 9, 1850)
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California Real Estate
 Board of Land Commissioners
 Formed to settle private land claims
 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 LA,
San Diego, Sacramento, San Francisco/Oakland
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Real Estate
Real estate in a physical sense is land and
buildings, things you can touch.
Real property is the physical
+ plus the legal
rights of ownership = the Bundle of Rights
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BUNDLE OF RIGHTS*
Include the right to:
1.
2.
3.
4.
5.
6.
Own and possess
Use
Enjoy
Encumber or borrow
against
Dispose
Exclude others who do
not share ownership
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*Subject to
government controls
Sample Test Question
 Under today’s concept of the bundle of rights, a
property owner has the right to all EXCEPT which
of the following:
 A. encumber
 B. destroy
 C. possess
 D. alienate
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Property Rights Do NOT Include the
Right to:
Destroy
Why?
•Value to neighboring property (vacant lot)
•Health & safety issues on tear downs (environment)
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Property Ownership
 Is not absolute
 Is subject to government controls, such as:
 Zoning and building codes
 Fair housing and antidiscrimination
 Health & safety regulations
 Police power
 Permits and licenses
 Public interest issues
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Definition: Real Estate
 LAND
 AFFIXED TO LAND
 APPURTENANT TO LAND
 IMMOVABLE BY LAW
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REAL PROPERTY is LAND:
 LAND includes:
 Earth’s surface
 lateral support
 subjacent support
 Materials under the surface
 Substances, including water
 Minerals, oil & gas
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Air rights: above the surface
 From
earth’s
surface
to the
Federal
Aviation
(FAA)
floor
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Mineral Rights
 Oil and Gas Rights
 Rule of Capture
 Rule of Extraction
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Water Rights
 Riparian
 Prior Appropriation
 Underground water
Concept of
Reasonable Use
 Riparian – borders
steam or lake
 Littoral – borders
shore of sea or ocean
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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)
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Property Affixed to the land:
 Affixed – Building improvements
 Appurtenances – Landscaping attached by roots
 Incidental – Utility pipes
 Attachments – Fence
 Easements – Right of way
 Fixtures – Patio cover
 Stock in a mutual water company
 Immovable, by law
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Appurtenances
• Easements
•
Stock in a mutual water company
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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
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Real OR Personal property?
Real property can become personal property
Personal property can become real property
 REAL Property
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 PERSONAL Property
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
NOTE: The law favors the borrower over a lender, a buyer over a
seller, and the tenant over the landlord.
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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
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California Domestic Partnership Law
 Effective January 1, 2005 registered domestic
partners have many of the same California
constitutional real estate rights as husbands &
wives
 Not recognized by federal laws & regulations
 Other states also do not recognize this law
©2011 Cengage Learning
Review Quiz Chapter One Introduction to Real Estate
1. Airspace above a parcel of land is:
(a) real property
(b) personal property
(c) an encumbrance
(d) a fixture
2. Zoning regulations have the greatest impact
on which right?
(a) right to encumber
(b) right to possess
(c) right to use
(d) right to exclude
©2011 Cengage Learning
Review Quiz Chapter One –
Introduction to Real Estate
3. All of the following are real property except:
(a) fruit trees
(b) chattels
(c) stock in a mutual water company
(d) built-in stove
4. In a dispute over fixtures, courts tend to favor
(a) sellers over buyers
(b) landlords over tenants
(c) lenders over borrowers
(d) grantors over grantees
©2011 Cengage Learning
Review Quiz Chapter One –
Introduction to Real Estate
5. The right of a land owner along a river to take water
is called:
(a) percolating rights
(b) river water rights
(c) user rights
(d) riparian rights
6. Which of the following is a test of a fixture?
(a) attachment
(b) chose
(c) appropriation
(d) restrictions
©2011 Cengage Learning
Review Quiz Chapter One –
Introduction to Real Estate
7. California became a state in:
(a) 1803
(b) 1848
(c) 1849
(d) 1850
8. Shelves in a retail store are an example of:
(a) real estate
(b) encumbrances
(c) trade fixtures
(d) real property
©2011 Cengage Learning
Review Quiz Chapter One –
Introduction to Real Estate
9. All of the following "run with the land," except:
(a) easements
(b) private deed restrictions
(c) water rights
(d) current harvest rights
10. Which real estate term is the most inclusive?
(a) real estate
(b) real property
©2011 Cengage Learning
Answers to Chapter 1 Review Quiz
1.
A
6. A
2.
C
7. D
3.
B
8. C
4.
C
9. D
5.
D
10. B
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