©2011 Cengage Learning

California Real Estate Principles Chapter 2 Part II: Estates and Methods of Holding Title ©2011 Cengage Learning

Owner’s Rights ©2011 Cengage Learning

Fee Simple Estate Fee Simple Absolute: No private restrictions The HIGHEST form of ownership Fee Simple Qualified (Defeasible) – Title is subject to private restrictions NOTE: All property subject to governmental controls ©2011 Cengage Learning

LIFE ESTATE I grant 123 Elm Street to my mother for her life, and after her death, to the Real Estate Scholarship Fund Foundation. Mrs. Smith REMAINDER ©2011 Cengage Learning

LIFE ESTATE I grant to my land to my mother for her life, and upon her death the land reverts to my estate. Mr. Kelly REVERSION ©2011 Cengage Learning

LIFE ESTATE I grant my home to the Real Estate Scholarship Endowment Fund, but I reserve the right of possession to my home for the rest of my life. Mr. J.R. Smith RESERVATION ©2011 Cengage Learning

Tenant’s Rights ©2011 Cengage Learning

ONE Owner ©2011 Cengage Learning

TAKING TITLE WHEN UNMARRIED Title Taken As: “A Single Man” or “A Single Woman” Never Been Married “An Unmarried Man” or “An Unmarried Woman” Was Married Not Married When Acquired “Sole and Separate property” Are Married Acquired During Marriage Keeping Separate From Marriage Funds ©2011 Cengage Learning

Multiple Owners ©2011 Cengage Learning

JOINT TENANCY Right of survivorship Equal shares for all joint tenants No probate. Cannot will the title interest Surviving tenant gets title free of debts of deceased Four unities must exist: 1. T ime 2. T itle 3. I nterest 4. P ossession ©2011 Cengage Learning

AB D AB AB C C SELLS TO D AB C C DIES RIGHT OF SURVIVORSHIP A & B ARE STILL JOINT TENANTS D IS A TENANT IN COMMON J T ©2011 Cengage Learning

Registered Domestic Partner Rights equal to husband & wife in California due to Domestic Partnership Law as of January ©2011 Cengage Learning

AB C’s HEIRS AB C C DIES No right of survivorship. Can leave property by a will Involves Probate. Can convey without co-owner’s permission Equal right of possession. Must pay % share of expenses Each owner may sever interest without permission of others Undivided interest in the whole Example: A 1/3, B 2/3 or A ¼, B ¼, C ½ ©2011 Cengage Learning TENANCY IN COMMON

CHARACTERISTICS OF COMMUNITY PROPERTY 1.Property acquired during valid marriage or registered domestic partnership 2.EXCEPTIONS: -property acquired before marriage or registered domestic partnership -property acquired during marriage or registered domestic partnership by gift or inheritance, if not commingled 3.Equal Co-Managers, Both signatures required to sell or lease 4.Each spouse or registered domestic partner has the right to will to whomever, unless they agree to the right of survivorship 5.No probate if left to surviving spouse or registered domestic partner ©2011 Cengage Learning

COMMUNITY PROPERTY Can ONLY be with held with a spouse or registered domestic partner Real property acquired during the marriage or registration If no title is stated, the Court presumes all property is Community Property Either party may separately will their share Requires both signatures to sell or lease Injured spouse has one year to void action Limited probate proceedings for spouse, no probate if community property with right of survivorship Undivided interest. Equal management, control, rights, ownership and possession ©2011 Cengage Learning

COMMUNITY PROPERTY HWHWVWW HUSBAND WIFE H DIES INTESTATE H DIES WILLS ALL HIS PROPERTY TO V ©2011 Cengage Learning

SEPARATE PROPERTY Property owned before marriage or registered domestic partnership Gift or inheritance during marriage or registered domestic partnership Sale proceeds/profit from sales of separate property COMMINGLED becomes community property ©2011 Cengage Learning

TENANCY IN PARTNERSHIP Two or more persons join for a business Rights not assignable Partners are jointly and severally liable General partner General partner is responsible for debts Unlimited liability for the business debts Limited partner Only responsible up to the amount invested Frequently used for real estate syndicates ©2011 Cengage Learning

Review Quiz Chapter Two 1.The SE ¼ of the NW ¼, and the SW ¼ of the NE ¼, and the SW ¼ of Section 22 contains: a. 2 ½ acres b. 240 acres c. 45 acres d. 165 acres 2.A person appointed by the court to handle the estate: a.Executor (trix) b.Administrator (trix) c.Devisor (ee) d.Testator (trix) ©2011 Cengage Learning

Review Quiz Chapter Two 3. A type of deed that contains an after acquired clause: a. grant deed b. quiet deed c. quitclaim deed d. gift deed ©2011 Cengage Learning

Review Quiz Chapter Two 4. “A” deeds to “B” and “B” takes possession but does not record the deed. “A” then tells a friend “C” about the deed to “B.” “A” then deeds the same property to “C” who records the deed. Based on this information, title probably vests in: a. “A” b. “B” c. “C” d. both “B” and “C” ©2011 Cengage Learning

Review Quiz Chapter Two 5. If a married person with one child dies intestate and leaves separate property, the descendant’s interest passes to the: a. surviving spouse and child b. surviving child, and not the surviving spouse c. surviving spouse, and not the surviving child d. surviving parents ©2011 Cengage Learning

Review Quiz Chapter Two 6. The highest form of ownership a person can have in a piece of property is: a. fee simple absolute b. fee simple qualified c. life estate d. testate estate ©2011 Cengage Learning

Review Quiz Chapter Two 7. “A” deeds a life estate to “B” and upon “B”s death title is to return to “A.” This is an example of what type of life estate? a. estate in reversion b. estate in reservation c. estate in remainder d. estate in severalty ©2011 Cengage Learning

Review Quiz Chapter Two 8. A valid joint tenancy must have the four unities of: a. time, title, interest, remainder b. title, time, possession, interest c. interest, right, possession, time d. time, title, occupancy, possession 9. Janet owned a home prior to marriage to Jorge. Upon marriage, Janet’s home: a. remains her separate property unless commingled b. automatically becomes community property c. is converted to joint tenancy d. must have a deed recorded showing her married name ©2011 Cengage Learning

Review Quiz Chapter Two 10. In which one of the following ways are joint tenancy and community property similar? a. title can only be held by husband and wife b. both provide the right of survivorship c. all owners have the right to will their interest in the property d. ownership shares are equal ©2011 Cengage Learning

1.B6.A 2.B7.A 3.A8.B 4.B9.A 5.A10.D ©2011 Cengage Learning Answers to Chapter 2 Review Quiz