California Real Estate Principles, 10.1 Edition Chapter 2: Introduction to Real Estate

Chapter 2 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 © OnCourse Learning

California History Native Americans- First inhabitants- Missionaries converted Explorer Vasco Nunez de Balboa (1513)- sighted Pacific Ocean and claimed for Spanish King & Queen. Under Spanish rule (1542-1822) San Diego: 1st settlement, by Juan Cabrillo Spanish developments (1769)- classified as: Forts = presidios Villages = pueblos (agri-towns)- food Land grants = ranchos – granted to private citizens – 21 Missions to spread Christianity MEXICAN rule (April, 1822) Mexican-American War (1846-1848) Americans from the East- created tensions. UNITED STATES rule Treaty of Guadalupe Hidalgo (1848)- ended the Mexican-American War California Statehood- (September 9, 1850)

California Real Estate Board of Land Commissioners Formed to settle private land claims- prior rancho rancho owners 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 Los Angeles, San Diego, Sacramento, San Francisco Bay Area © OnCourse Learning

Real Estate Real Estate can refer to the industry or profession as well as the physical sense of land and buildings, known as Real Property. © OnCourse Learning

BUNDLE OF RIGHTS* Own and possess Use Enjoy Encumber or borrow against Includes the right to: Own and possess Use Enjoy Encumber or borrow against Dispose Exclude others who do not share ownership *Subject to government controls

Property Rights Do NOT Include the Right to: Destroy Why? Loss of value to neighboring property Environmental, Health & safety issues on tear downs

Property Ownership Is neither absolute nor unlimited Is subject to ( examples of how the government controls property rights): Zoning and building codes Fair housing and antidiscrimination Health & safety regulations Police power Permits and licenses Public interest issues

Definition: Real Estate LAND AFFIXED TO LAND APPURTENANT TO LAND IMMOVABLE BY LAW

REAL PROPERTY is LAND: LAND includes: Earth’s surface lateral support subjacent support Materials under the surface Substances, including water Minerals, oil & gas

Air rights: above the surface From earth’s surface to the Federal Aviation (FAA) floor

Mineral Rights Oil and Gas Rights Rule of Capture Rule of Extraction

Water Rights Riparian – borders steam or lake Littoral – borders shore of sea or ocean Doctrine of Correlative Use – Underground water Prior Appropriation

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)

Property Affixed to the land: Affixed – Building improvements Attached – Landscaping attached by roots Incidental – Utility pipes Attachments – Fence Easements – Right of way Fixtures – Patio cover

Appurtenances • Easements • Stock in a mutual water company

Immovable by Law If an object is not allowed to be moved from the land it is resting on, then it is a part of that property as a matter of law. © OnCourse Learning

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

Real OR Personal property? Real property can become personal property Personal property can become real property REAL Property PERSONAL Property

TEST OF A FIXTURE M A R I A ethod of Attachment daptability for Ordinary Use R elationship of the Parties I ntent of the Parties A greement Between the Parties NOTE: The law favors the lender over a borrower, a buyer over a seller, and the tenant over the landlord.

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