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

2. 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

3. 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 ( )
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 ( ) Americans from the East- created tensions.
UNITED STATES rule
Treaty of Guadalupe Hidalgo (1848)- ended the Mexican-American War
California Statehood- (September 9, 1850)

4. 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

5. 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

6. 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

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

8. 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

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

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

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

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

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

14. 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)

15. 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

16. Appurtenances
• Easements
• Stock in a mutual water company

17. 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

18. 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

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

20. 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.

21. 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