MGMT 298D – Week 4 – Spring 2010
I.
REVIEW FROM LAST WEEK
A. Let’s review Deposit Receipts & Listing Agreements
B. Meyer and Buckaloo cases – pp. 53 & 102
C. Let’s look at Jones case (Handout)
II.
VOLUNTARY TRANSFER OF REAL ESTATE
A. Potential Kinds of transfer:
1.
2.
3.
4.
5.
6.
Inheritance – e.g. by will or intestate (without a will)
Survivorship – e.g. Joint Tenancy of Community Property
Gift – Lifetime transfer
Exchange – 1031
Foreclosure or execution – Secured or Judgment Creditor
Eminent Domain: Government taking
B. Inheritance: See attached lecture notes on Estates & Wills.
C. CONTRACT OF SALE : Most common
1. Basic contract law applies...
a. Writing required (Statute of Frauds)
b. Essential terms necessary (price, parties, etc.)
2. Seller warrants good title
3. Installment Contracts or Land Sale Contract (checkered
legal history – therefore rare in California)
a. Due on sale clauses not always enforceable
historically (now overruled by federal law)
b. Valuation of damages - Honey case on p. 161).
D. Deed: Transfers the title of ownership to the property.
1. Contents & Elements for valid Deed:
1
a.
b.
c.
d.
e.
f.
Identification of grantor & grantee
Words of conveyance
Description of Property
Signature of competent grantor
Delivery of deed
Acceptance by grantee
2. Not required:
a. Recordation
b. Notarized or acknowledged signature (unless you
intend to record the document).
3. Types of Deeds:
a. Warranty Deed (used in other states): 2 basic types:
(1) General Warranty: Unlimited guarantee of title
(2) Special Warranty: Guarantee of title is limited to
grantor’s period of ownership
b. Grant Deed – In California replaced the Warranty
Deed. Provides two basic implied warranties
(1) No previous conveyance by seller
(2) No encumbrances by seller (other than those
disclosed)
c. Quitclaim Deed: Grantor only conveys whatever title
or interest he or she has.
d. Let’s look at these implied warranties in Evans
case on p. 153
4. Priority of Deeds:
a. Bona fide purchaser for value: BFP  A buyer who
pays value for the property and is unaware of the
prior adverse claim.
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b. Notice – Can be Actual or Constructive
c. Disputed Claims of Ownership: How solved?
Depends on Type of Jdx:
(1) RACE: First to Record wins the race….
(2) NOTICE: Later deed beats earlier deed only if
later deed had NO NOTICE of prior deed (BFP)
(3) RACE-NOTICE (California rule): Later deed
beats an earlier deed only if later deed holder
had NO NOTICE of prior deed (a BFP) – AND –
he or she records!
(4) Duncombe case (p. 254) – who wins the
race?
5. Other Priority Claims:
a. Mechanics Liens
(1) Must comply with statutory notice
requirements (Notice of Completion + record
within 60 days)
(2) Subcontractors have 30 days to record
thereafter.
(3) SUPERIOR rights against even a BFP.
(4) Conflicting mechanic’s liens – based on
date work commences.
b. Judgment Liens
(1) Court order awarding damages.
(2) Junior to other recorded secured interests
(e.g. mortgages)
(3) If debtor buys NEW property – lien attaches
immediately to new property.
(4) Good for 10 years
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c. Lis Pendens (notice of pendency of action)
(1) Filed on initiation of a lawsuit.
(2) Clouds title for owner.
(3) Priority over subsequent liens or mortgages.
d. Let’s look at Patten-Blinn Lumber Co. on p. 259
III.
INVOLUNTARY TRANSFERS OF REAL ESTATE
A. ADVERSE POSSESSION: What are sometimes referred to as
"squatter's rights." Elements are…
1. Actual & Exclusive
3. Open and notorious
4. Continuous (in California for 5 years)
5. Hostile and adverse – can be under
a. By Claim of Right (hostile occupation)
b. By Color of Title (under a defective document)
6. Pay the real estate taxes (in California)
B. CONDEMNATION & EMINENT DOMAIN:
1. Based on Power of the State to seize property, for just
compensation.
2. Inverse Condemnation – a taking because of severe
regulation. (compare with police power to regulate…e.g.
zoning)
3. Requirements:
i.
ii.
For the public good.
With just compensation to owner (FMV) – Methods
used include…
e. Cost Method (replacement cost – depreciation)
f. Comparable Sales method
g. Capitalization of Income method
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4. Let’s look at the Nollan case on P. 171.
WILLS & ESTATES
I. WILLS:
A. Definition: Declaration of a person as to how his or her property is to be
distributed after their death.
B. Terms:
1.
2.
3.
4.
5.
6.
7.
8.
Testator or Testatrix: maker of will
Executor/Executrix: Administrator of estate
Devise: Real Estate bequeathed
Bequest: Personal Property bequeathed (If cash = legacy)
Heirs, Beneficiaries: Folks getting the money, property, etc.
Estate: All the money, property, assets & liabilities.
Codicil: Amendment to the will
Probate: The legal process of distributing the estate, paying taxes and
honoring the will.
C. MAKING A VALID WILL:
1. Testamentary capacity: a. Requirements of capacity:
(1) Understand who his relations are
(2) Understand nature of his property
(3) Be able to make a plan for distribution
2. Formal Will: Requires the following...
a.
b.
c.
d.
In writing
Signed by Testator
Signed in presence of two disinterested witnesses
Signed by both witnesses in each other's presence and in the
presence of testator.
3. Other California Wills:
a. Holographic Will: CAL. requires that it must be
(1) dated
(2) Be entirely in handwriting of Testator
(3) Signed by Testator
b. Statutory Will: Statute provides an actual form people can use.
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II. INTESTATE SUCCESSION: Dying without a will….certain pecking order
A. Table of Consanguinity: SEE HANDOUT
B. ORDER OF DISTRIBUTION:
1. Spouse:
property.
All of the community property and one-half the separate
2. Spouse & 1 Child, Parents: Spouse gets 1/2, child gets 1/2 (or parent
gets 1/2)
3. Spouse & more than one child: Spouse gets 1/3, children get 2/3.
4. By right of representation: If Child or Parents leave issue (kids), their
issue take.
5. Children, then Grandchildren, then parents, then bros. & sisters, then
nephews & nieces, then uncles & aunts, then cousins.
C. DISTRIBUTIONS:
DEAD GUY
SON - 1
SON - 2
Grandson
Grandson
Grandson
1
2
3
1. Per Capita: Children and siblings take equally. So if three brothers
take equally.
Under PER CAPITA - GC-1 and CG-2 get 1/3, GC-3 gets 1/3
2. Per Stirpes: If one of the children or siblings pre- deceases, but
leaves issue, then those children of the pre-deceased heir, divide the share
of the pre-deceased heir.
Under PER STIRPES - GC-1 & GC-2 get 1/4, GC-3 gets 1/2)
3. Who is a “child”: Adopted, illegitimate.
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4. CALIFORNIA – Default rule is per capita for the 1st generation
(e.g. “to my children”) and per stirpes for successive generations.
D. ESCHEAT: If no living relatives of decedent are found or step forward.
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