2.7 Blind Advertising and Legal Advice: Not Designate Their License Status

Real Estate Principals
2.7 Blind Advertising and Legal Advice

*AGT* (agent)
BLIND ADVERTISING:
A licensee advertises property for sale on behalf of another and does

not designate their license status. (form of disclosure)
Example: Representing Buyer and they ask how they should take their
title..(joint tenancy, community property, single family, unmarried, etc…)
I DO NOT HAVE the capacity to give them any sort of legal advice & they
must consult competent legal counsel. Tax Question’s Ask an accountant.
2.8 Disclosures
The seller must disclose

MATERIAL FACTS
Facts that would influence the decision making process of a

reasonably prudent person
TRANSFER DISCLOSURE STATEMENT :
Written disclosure of defects on all one to four residential units is

necessary.
If you're a seller of a one to four residential dwelling or units, then you must make
material fact disclosure.
It is the duty of a licensee to make a reasonable inspection of the property of all
accessible areas looking for “red flags”.
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• Natural Hazard Disclosures : flood, fire, and earthquakes.

-Seismic hazard zone disclosure
-Fire hazard zone
-Homeowner’s Guide to Earthquake Safety
-Smoke Detector statement of compliance
-Water heaters security against earthquakes (stable)
• Megan’s Law (Federal Law) : Requires sellers to disclose the

accessibility to the sex offenders database. This applies to sellers
and landlords.
• Lead Paint Disclosure (Federal Law) : “Target Housing” (houses/

dwellings built before 1978) Paint may or may not contain lead in it.
(Paint Chips)
2.9 Financial and Other Federal Laws and Disclosures
FEDERAL FAIR CREDIT REPORTING ACT (FEDERAL LAW) :

States the rights of consumers
There must be accuracy, fairness and privacy of the information in
consumer reporting agencies.
TransUnion, Equifax & Experian - FTC (Federal Trade Commission)
Regulated.
Consumer Rights:
1. consumer must be told if the information in their field has been used
against them.
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2. Consumer must know what’s in their file. Right to one free credit report from
each agency a year (CA).
3. Consumer has right to know their FICO score.
4. The right to dispute incomplete or inaccurate information.
5. Right to have inaccurate or incomplete information removed or

corrected.
What is the determinative of FICO Score? - Credit Worthiness
RESPA (REAL ESTATE SETTLEMENT PROCEDURES ACT) (FEDERAL

LAW):
A consumer protection statute, first passed in 1974. The purpose of RESPA
are:
1) To help consumers become better shoppers for settlement services and
2) To eliminate kickbacks and referral fees that unnecessarily increase the
costs of certain settlement services.
All creditors; must disclose to potential borrowers
CREDITOR
is person who regularly extends consumer credit that is subject to a
finance charge or is payable by written agreement in more than four
installments, not including the down payment, and to whom the obligation
is initially payable, either on the face of the note or contract, orby
agreement where there is no note or contract. Natural Persona or Entity.)
Has to be a finance charge payable by written agreement in more than four installments not
including the down payment and it's payable either on the face of a note, a contract, or by written
agreement the disclosure from creditors to consumers about the cost of obtaining credit, (not to be
confused with interest: the cost of borrowing money.)
$ Cost of Procuring Loan Fees for underwriting, processing etc. duties.

Consumer must get
GFE (GOOD FAITH ESTIMATE)

The lender’s estimate of the borrower’s settlement costs; RESPA requires
the lender to furnish it to the borrower at the time of loan application.
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*HUD form* (Housing an Urban Development) Form creditors and lenders comply with
Real Estate Settlement Procedures Act
REGULATION Z :
States that the only two terms of the loan that can be present without triggering
what is called the “full disclosure requirement” is interest rate and APR. You can't
disclose one without the other.
Other terms such as down payment, payment amount, number of payments, the
repayment period, or the finance charge, if that is stated anywhere in the advertisement,
that triggers the full disclosure requirement. So you cannot talk about down payments
without talking about the rest of them, payment amount, number of payments,
repayment period, or finance charge.
ANNUAL PERCENTAGE RATE (APR)

The relative cost of credit as determined in accordance with Regulation Z of the
Board of Governors of the Federal Reserve System for implementing the Federal
Truth in Lending Act.
Summary (Need to Know)

-THE FEDERAL FAIR HOUSING ACT.
The Civil Rights Act of 1866 made it illegal in housing to discriminate
based on race only.
-THE 1964 CIVIL RIGHTS ACT:

Expanded the protected classes
-Understand the Exceptions to the anti discrimination laws (the

federal law)
*Understand CA counterparts
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HOLDEN ACT :
The Housing Financial Discrimination Act of 1977- Fair Lending Notice - race,
ethnic, religion, sex, gender identity, expression, orientation, marital status,
income, disability, veteran….IT IS ILLEGAL TO CONSIDER THE RACIAL,
ETHNIC, RELIGIOUS OR NATIONAL ORIGIN COMPOSITION OF A
NEIGHBORHOOD OR GEOGRAPHIC AREA SURROUNDING A
HOUSING ACCOMMODATION OR WHETHER OR NOT SUCH
COMPOSITION IS UNDERGOING CHANGE, OR IS EXPECTED TO
UNDERGO CHANGE, IN APPRAISING A HOUSING ACCOMMODATION
OR IN DETERMINING WHETHER OR NOT, OR UNDER WHAT TERMS
AND CONDITIONS, TO PROVIDE FINANCIAL ASSISTANCE
RUMFORD ACT:
MAKES IT UNLAWFUL TO DISCRIMINATE IN THE RENTALS, SALE,

FINANCING, OR LEASING OR HOUSING BECAUSE OF RACE, COLOR,
RELIGION, NATIONAL ORIGIN, OR ANCESTRY.
UNRUH CIVIL RIGHTS ACT
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PROVIDES PROTECTION FROM DISCRIMINATION BY ALL BUSINESS
ESTABLISHMENTS IN CALIFORNIA, INCLUDING HOUSING AND
PUBLIC ACCOMMODATIONS, BECAUSE OF AGE, ANCESTRY, COLOR,
DISABILITY, NATIONAL ORIGIN, RACE, RELIGION, SEX AND SEXUAL
ORIENTATION.
-Property Disclosure
-*TRANSFER DISCLOSURE STATEMENT* (TD)
Related disclosures: fire, flood, earthquakes, high fired hazard zone, flood
zone, fault zone, seismic hazard, educational booklet on earthquake
safety. (understand distinction between which is state law)
The TDs is state law mandated byCalifornia law, but know that the
lead based paint hazard is a federal law.
MEGAN’S LAW:
Disclosure of accessing the sex offenders database is a federal
law.
RESPA VS Reg Z: (federal laws)

RESPA applies to disclosure by the creditor of the cost of procuring the
loan, whereas Regulation Z applies to creditors, and it deals with the
advertising requirements.
Common violations of R.E law : misrepresentation
DECEIT :
1. Making a statement of fact that you know is not true.
2. Making a statement of fact in which you have no
reasonable grounds to believe is true.
3. Failing to disclose a material fact.
Material Fact
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2nd most prevalent reason for trust fund violations
Violations:
Commingling vs conversion
If a broker receives funds that are not his or hers, how long does the broker
have to put them in its certain places?
What are those certain places? A neutral escrow depository, the broker's
trust account or the principal for whom it was intended.
How long does the broker have to get those funds in one of those three
places? (3 days)
What is conversion? stealing.
Misrepresentation or trust funds are the top two.
Obtaining a license by fraud.
What must an applicant for a real estate license disclose?
BLIND ADVERTISING
3.1 Land, Real Estate & Real Property
LAND
land is included, but not limited to the soil, earth and ground.
-Result of nature or manmade, artificial
-Installed onto the ground, earth or soil, such as utilities
-Indefinite extent upward into the air and downward a direct line from
the surface to the center of the earth.
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TITLE = OWNERSHIP :
Rights one has to a particular property (interest)
if you borrowed money to purchase it, then the lender, the creditor, also
has a right in the house. You have an interest, you have a right in it, but it is
subject to the interest of a creditor.
PERSONAL PROPERTY
is that which is movable.
Air = upward ; Downward= subsurface; a direct line from the surface of
the earth to the center of the earth.
REAL ESTATE
Land, and generally whatever is erected upon or affixed thereto.
Improvements, such as buildings, structures, landscaping, fences,
etc, are included.
REAL PROPERTY
That which is immovable. Land, things affixed to land, and
appurtenances. Real estate plus the Bundle of Rights.
PERSONAL PROPERTY
All property that is not considered to be real property. That which is
movable (not attached to land).
APPURTENANCES
Something which is outside property itself but belongs to the land and
adds to its greater enjoyment such as a right-of-way or a barn or a
dwelling.
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BUNDLE OF RIGHTS
The rights, or interests, that an individual has in a particular piece of

property. The right to dispose, the right to encumber, the right to
possess, the right to use, and the right to exclude others (the right of
quiet enjoyment).
- Dispose
- Encumber
- Possess
- Use
- Exclude
ALIENATE
The capacity for a piece of property or a property right to be sold or
otherwise transferred from one party to another.
ENCUMBRANCE
Any right to or interest in the land interfering with its use or transfer,
or subjecting it to an obligation.
REVERSION
A future interest that is retained by the grantor after the conveyance
of an estate of a lesser quantum that he/she has.
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3.2 Fixtures
FIXTURE
An item of personal property after being attached to real property
which is movable.
Elements of fixture:
1. Agreements of the parties/contract (is it stated as a provision in the
contract?)
2. Intentions of the party
3. The relationship of the parties to the object. (is the individual a tenant or
a buyer?)
5. The method of attachment (will the removal of the item cause
substantial damage?)
Exceptions :
TRADE FIXTURES:
An item one would use in their trade or profession. (personal property)
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EMBLEMENTS:
Fructus and naturales (stuff that grows out of the ground)
3.3 Water Rights
The right of lateral and subjacent support.
The right of lateral support is a right of a landowner to have the natural

physical support of the adjoining or adjacent piece of land.
If you do an excavation project on your land that somehow compromises the integrity of
your land, on which your next door neighbor's land depends on for its structural integrity,
then you have violated your neighbor's right of lateral support.
SUBJACENT SUPPORT
is the physical support of underground structures.
if you extract liquid deposits from your land, that might cause the land to cave in again,
you have compromised your neighbor's piece of land.
WATER RIGHTS
The rights of a landowner and or land occupier to use adjacent bodies of
water in a reasonable fashion.
RIPARIAN RIGHTS: (RIVER)

The right of a landowner or land occupier to use flowing water. ( If you own
the dirt that adjoins a body of water, you have a right to the reasonable use of
that water.)
LATERAL RIGHTS: (LAKE)

The right of reasonable use of non flowing water.
ACCESSION:
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the potential right to land which is produced or then added and united to
the owner's property.
*right to access*
ACCRETION:
The process of gradual growth or increase over a period of time from
naturally occurring events resulting to additional layers of matter.
*soil and sediment buildup down a river will eventually amass into newfound land.*
EROSION:
the gradual loss of land over time
*would have to go through a legal process in order to gain the legal right to say that he owns
that property or he has title to that property*
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3.4 The Legal Descriptions of Land
3 legal/formal descriptions of land:

1. Metes and bounds (Measurements and Boundaries) = distance &
direction (the “complex method) used for irregular shaped parcels of
land. (Miles, feet, kilometers, meters + North, South, East, West) (The
use of monuments to distinguish ones location)
2. US gov. Survey System (the township method) uses a number and

direction A township is established by the intersection of tiers and
range lines that measure 6 miles by 6 miles on each side. It
comprises 36 sections, with a total area of 36 square miles. These
sections are numbered beginning from the North East, with the
first section designated as 1, all through to 36.
3. Lot and Blocked (Track) System

Would be used in any city or densely populated suburb.
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*contiguous* - lots that touch at any point (even corners).
*What does mates and bounds mean? (Distance and direction) The US Government
survey method, you might be asked questions like what is north, south, east or west of a
particular section of a township? You might be asked the square miles of a township.
The mile square, you might be asked 1 mile equals how many linear feet. (5,280) You
might be asked how many acres in a particular section? 640. That's for all of them. How
many square miles is in a section?
1 acre = 43,560 sq ft
3.5 Government Rights in Land
POLICE POWER –
The right of any political body to enact laws and enforce them, for
the order, safety, health, morals and general welfare of the public.
EMINENT DOMAIN
A right of the government to acquire property for necessary public
use by condemnation; the owner must be fairly compensated.
CONDEMNATION
Taking private property for public use, with fair compensation to
the owner; exercising the right of eminent domain.
ESCHEAT –
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The reversion of the State of property in event the owner thereof

abandons it or dies, without leaving a will and has no distributes
to whom the property may pass by lawful descent.
There is an assessment appeals board, and so this is a way for individuals to appeal their
assessments, and a lot of people did, because what happens is if you succeed in your appeal,
then your assessed value gets lessened, and even though you're still going to pay 1% or one
and a quarter percent, but one and a quarter percent on $450,000 is certainly a lot less in terms
of dollars than is one and a quarter percent on $700,000. So it's a way to lower one's assessed
value and therefore pay less in property taxes.
Fiscal year starts : July 1 (July, Aug, Sept = 1st quarter)
CA property taxes due :

Nov.1 || Delinquent by Dec. 10
2nd installments due Feb. 1 || Delinquent by April 10
(2 installments/ 2 delinquency dates)
(No Darn Fooling Around)
5 year non payment consequences = foreclosure
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3.6 Zoning
• Zoning is a form of police power.
• Controls land use and development
largely based on population density. (# of ppl in area)
zoning classifications = symbolized by a letter and a number.

R = residential
C = commercial variance, the way it's distinguished from a
nonconforming use.
A= agriculture
I = industrial
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If they want to change the zoning …you’re interested in staying in
business and continuing to operate your multifamily units, you would have
to attempt to get what is called a nonconforming use.
Nonconforming Use:
The historical use whereby an individual would ask to use that
property for that historical use, otherwise they will have to endure
undue hardship.
Your history (I been here for 5+ yrs using it as a multi-family but now
violation of the zoning classification)
Now its causing me Undue Hardship (you’re going to put me out of
business! Grant me a nonconforming use whereby I can continue to use
the property for its historical use and not the present zoning classification,
which is brand new.)
Restrictions once granted nonconforming use:
1. Cannot enlarge the property (expansion)
2. If the structure is destroyed, (natural disaster, arson, etc…) then it
must be rebuilt in conformity with the current zoning
classification.
Variance - The authorization to improve or develop a particular

property in a manner not authorized by zoning.
the way it's distinguished from a nonconforming use.
A new owner comes in and simply asks (governing authorities, city council, board of
Supervisors) to be exempt from the regulation / current zoning classification method of
variance.
Special Use Permit - proposed by an individual who does not

specifically fall under the type of use permitted by the zoning classification
(ex: daycare in a residential neighborhood)
ADDITIONAL KEY TERMS :
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Frontage – The linear distance along which a building faces a lot or a

roadway.
Setback – The distance a structure must be placed away from the street.
Side Yard – A yard that extends along a side lot line from the front yard to
the rear yard.
Rear Yard – A yard that extends along the full length of a real lot line.
4.1 Estates
Estate – The degree, quantity, nature, and extent of interest that

a person has in real and personal property (includes everything
one owns).
2 Types of estate
(Difference between is a matter of duration)
FREEHOLD ESTATE -
A right of title to land. Indeterminable duration
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1. Fee simple
2. Fee simple absolute
3. Fee simple determinable
4. Fee simple upon condition subsequent
5. Life Estate
estate of remainder (third party)
The individuals who are in receipt of your real property are called
devisees. If you leave your personal property through your will, that is
called a bequest. And the individuals who are in receipt of your personal
property are called legates.
Reverter- reverts back to the grantor
Fee Simple Estate – Absolute ownership of real property; a

person has this type of estate where the person is entitled to the
entire property with unconditional power of disposition during the
person’s life and descending to the person’s heirs or distributees.
Fee Simple Absolute – An inheritable estate in land providing the

greatest interest of any form of title.
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Fee Simple Determinable – An estate that will end automatically

when the stated event or condition occurs. The interest will revert
to the grantor or the heirs of the grantor.
Fee Simple on Condition – A defeasible fee (title), recognizable

by words ‘but if’.
Life Estate – A freehold estate created for the duration of the life
or lives of certain named persons; a non-inheritable estate.
Grantor – A person who conveys title to real property by deed.
Grantee – A person who receives title to real property by deed.
Leasehold Estate – Non-freehold estate; of limited duration,

providing the right of possession and control but not title.
Estate in Reversion – Property or estate ownership that reverts

back to the grantor after a temporary ownership period.
Estate in Remainder – An estate which vests after the

termination of the prior estate.
Estate is simply what you own.
4.2 Less Than Freehold Estates
NON FREEHOLD ESTATE (LEASEHOLD ESTATE)

Absolute ownership of real property; a person has this type of
estate where the person is entitled to the entire property with
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unconditional power of disposition during the person’s life and

descending to the person’s heirs or distributees.
1. Estate for years - A leasehold estate for any specifi c period of time.
An estate for years is not automatically renewed.
2. Periodic Tenancy (month to month)- A lease that automatically

renews for successive periods unless terminated by either party; also
called estate from year to year.
3. Estate at will - A leasehold estate that may be terminated at the desire

of either party.
4. Estate at sufferance - Continuing to occupy property after lawful

authorization has expired; a form of leasehold estate.
Types of Leases:
• Lease
• Gross lease
• Net Lease
• Percentage lease
• Lease option
4.3 Landlord Tenant Relationship and their Legal Rights

*only landlords signature is required
* leases under 1 yr do not require written contract
-Right of the landlord is to receive payments (rent)
-Obligation of landlord is to deliver to the tenant legal possession and use.
-Habitable dwelling (warranty of habitability; is implied by law)
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Obligation of a tenant:
-pay rent
-abide by lease terms (covenant = promise)
The breach of warranty of habitability is called constructive

eviction
You cannot sue as a tenant for constructive eviction if you do not
vacate the premises.
KEY TERMS:
Lease – A contract whereby, for a consideration, usually termed rent, one

who is entitled to the possession of real property transfers such rights to
another for life, for a term of years, or at will.
Lessor – One who rents property to another under a lease.
Lessee – A person to whom property is rented under a lease.
Covenants – Agreements written into deeds and other instruments

promising performance or nonperformance of certain acts, or stipulating
certain uses or non-uses of the property.
Constructive Eviction – Any disturbance of the tenant’s possession of the

leased premises by the landlord whereby the premises are rendered unfi t
or unsuitable for the purpose for which they were leased.
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4.4 Tort Liability

(hurt/hort)
Tort Liability – A legal obligation of one party to a victim as a result

of a civil wrong or injury.
*A Third Party*
Tort examples: negligence, false imprisonment, trespass, assault,

nuisance
A landlord is liable for what occurs in the common areas of a
rental dwelling.
if there's a history of this stuff going on and the landlord didn't take any precautions
whatsoever, then there's an argument that the landlord breached the standard of
reasonable care and then might have a claim against the landlord. So that's where the
liability of the landlord begins and ends.
Invited guests = licensee (status of a guest who comes onto the

property of another.)
The tenant is liable for any injury or harm that may come upon that
guest.
Land occupier- the one who occupies the land

obligation for the land occupier is to either warn or fix whatever
potential harm, either artificial or natural, that may be caused by
some sort of circumstance on the property.
Business invitee-
(ex: Failed to put the sign out that says caution, wet floor; negligence is a tort.)
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As the business owner then have a duty to rescue them. You have a duty to
inspect and uncover danger. You have a duty to rescue an invitee from danger
far more demanding as a licensee.
Important :
*licensee does not have any interest in the property itself. None of the
bundle of rights applies to a licensee. They simply have the right or
permission to enter onto the property as a guest.
4.5 Eviction Process
KEY TERMS:
Eviction – A legal proceeding by a lessor landlord to recover possession
of real property.
1. Breach of Lease
2. 3 day notice to pay or quit- must be delivered personally
3. File unlawful detainer action ( a civil lawsuit filed in the superior court
of the county in which the property is located) (unlawful deed interaction)
suing to regain possession and use of the dwelling unit in question; not
suing for damages. Cannot use “self-help” must go through legal process
-In favor of landlord = writ of possession
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a landlord could go right over to the local county sheriff and

request that then the sheriff remove the tenants and their
belongings.
4.6 Types of Ownership

How one takes title
1. Sole Ownership (Ownership of Severalty) Severe: to cut off

Natural Person = you and me
Legal person = An entity/corporation
2. Co-Ownership
Two or more people can own
1. Joint Tenancy - (only natural persons, not corporations) two or more

natural people own with a special benefit called the right of survivorship.
(ROS)
ROS - when a joint tenant dies, their interest passes by operation of law to
a surviving joint tenant and the benefit is it passes without probate.
Joint Tenancy require four unities:

1. Time (All joint tenants must receive title at the same time)
2. Title (All joint tenants must receive ownership interest title, on the
same instrument ; an operational document; ex: deed)
3. Interest (all joint tenants must have an equal interest)
4. Possession ( equal rights of possession and use, which means it's

an undivided interest, all of the owners/joint tenants have an equal
right to possess the entire thing)
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2. Tenancy in Common (natural or legal persons, no right of
survivorship)
Partition action - The result is that the co ownership arrangement is now

destroyed.
KEY TERMS
Joint Tenancy - Undivided ownership of a property interest by two or

more persons each of whom has a right to an equal share in the
interest and a right of survivorship, i.e., the right to share equally with
other surviving joint tenants in the interest of a deceased joint tenant.
Tenancy in Common – An ownership of realty by two or more

persons, each of whom has an undivided interest, without the “right of
survivorship”.
Condominium – Five or more units where in the owner has a fee

simple interest in the air space, or four walls in which they live or
occupy, plus common areas which are owned as a tenancy in
common.
Ownership in Severalty – Title to real property held in the name of

only one person.
Chapter 5
Chapter 5.1 : Encumbrances
KEY TERMS:
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Encumbrance – Any charge, claim, right, burden (otherwise

called a cloud on title), and/or interest in real property other than
the owners, including but not limited to, any restriction upon the
title to real property, affecting and/or limiting any interests or its
use.
Lien – A form of encumbrance which usually makes specific

property security for the payment of a debt or discharge of an
obligation (ex: judgments, taxes, mortgages, deeds of trust, etc..).
Voluntary Lien – Any lien placed on property with consent of, or

as a result of, the voluntary act of the owner.
Involuntary Lien – A lien imposed against property without

consent of an owner (ex: taxes, special assessments, federal
income tax liens, etc..).
Debt –That which is due from one person or another; obligation,

liability.
Promissory Note – Following a loan commitment from the

lender, the borrower signs a note, promising to repay the loan
under stipulated terms. The promissory note establishes personal
liability for its payment. The evidence of the debt.
Security Instrument – A contract whereby a debtor agrees to use

property as security or collateral for the repayment of debt.
Hypothecate – To pledge a thing as security without the

necessity of giving up possession of it.
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5.2 Security Instruments
1. Trust Deed
2. Mortgage
3. Real Property Sales Contract (Contract for Deed/Installment
Contract)
Legal Title = control
Equitable Title = benefit
Mortgage – A contract whereby a mortgagor agrees to use real
property as security for the repayment of debt.
Foreclosure – Procedure whereby property pledged for a debt is

sold to pay the debt in event of default in payments or terms.
Trustor – One who borrows money from a trust deed lender, then
deeds the real property securing the loan to a trustee to be held
as security until trustor has performed the obligation to the lender
under terms of a deed of trust.
Trustee – One who holds property in trust for another to secure

the performance of an obligation. Third party under a deed of
trust.
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5.3 Real Property Sales Contract
Real Property Sales Contract – An agreement to convey title to

real property upon satisfaction of specifi ed conditions which does
not require conveyance within one year of formation of the
contract.
Vendor – A seller.
Vendee – A purchaser, buyer.
Vendor has legal title/ Vendee has has equitable title control and
benefit.
Vendee defaults the vendor can then simply evict like a tenant
real property sales contract, the seller keeps the legal title, the
control and theVendee the buyer gets equitable title which is the
benefit of possession and use.
-operates as a purchase and sale agreement and also as a

security instrument.
-no need for a mortgage or a trust deed in this case because the
contract itself acts as a security instrument.
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5.4 Deed in Lieu of Foreclosure
-Borrower is voluntarily giving up their ownership interest in the

property to the lender
-convey you title through deed
-There could be multiple liens on a property.
-Foreclosure is the beginning of the process.
-Foreclosure has that effect of wiping out junior liens. (any lien
that's not first because there can only be one first and that's called
a senior lien)
5.5 Mechanics Lean

A mechanic, a contractor, a laborer/individual can simply create that lien
without having to file any lawsuit, obtain any judgment or anything of that
sort.
Mechanic’s Lien (involuntary lien) – A lien created by statute

which exists against real property in favor of persons who have
performed work or furnished materials for the improvement of the
real property.
General Lien (blanket encumbrance) – A lien on all the property

of a debtor.
Specific Lien – A lien that attaches to one specifi c property only.
Package Loan – A type of loan used in home fi nancing covering

real property, improvements, and movable equipment/appliances.
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Judgment Lien – A legal claim on all of the property of a

judgment debtor which enables the judgment creditor to have the
property sold for payment of the amount of the judgment.
5.6 Easement
Recap: Monetary encumbrances = liens, mortgage, trust deed,

mechanics lien
General lien - monetary( alien against more than one property.)
Secured Debt
Non-monetary encumbrances - physical use of the property (not

$) = Easement : The right to use
Possession use encumbered dispose exclude others right or the right of
quiet enjoyment.
The right to use land for ingress and egress (for entry and exit of one’s
own property)
KEY TERMS
Easement – A right, privilege or interest limited to a specifi c purpose

which one party has in the land of another.
Easement Appurtenance – A right of use in the adjoining land of

another that moves with the title to the property benefi ting from the
easement.
Easement in Gross – A right of use in the land of another without the
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requirement that the holder of the right own adjoining land.
Servient Tenement – Land encumbered by an easement.
Dominant Tenement – Land benefi ting from an easement

appurtenant.
Easement by Voluntary Grant – A grantor conveys the right to use

the grantor’s land to a grantee for the purpose of ingress and egress.
Easement by Necessity – Exists when a landowner has no access to

roads and is landlocked.
Easement by Prescription – Obtained by use of the land of another

for the legally prescribed length of time.
Adverse Possession – A method of acquiring title to real property by

conforming to statutory requirements; a form of involuntary alienation
of title.
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Easement Infographic
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Chapter 6
6.1 Legal Consequences of Claim of Right and Color of

Title
KEY TERMS
Quitclaim Deed – A deed to relinquish any interest in property

with the grantor without interference of possession.
Trespass – The wrongful entry on to the land on another, either in

person or by instrumentality.
Encroachment – An unlawful intrusion onto another’s adjacent

property by improvements to real property (ex: a swimming pool
built across a property line).
Injunction – A writ or order issued under the seal of a court to

restrain one or more parties to a suit or proceeding from doing an
act which is deemed to be inequitable or unjust in regard to the
rights of some other party or parties in the suit or proceeding.
Claim of right and or color of title = adverse possession ; claiming

you have the right, even though you don’t (aka SQUATTER)
“Adverse Possessor”
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Claim of Right- The adverse possessor will only adversely

possess what they occupy.
Color of Title- THE ENTIRE PARCEL Trespasser acted in “good

faith”; was given some sort of legal instrument that indicated they
had legal right to enter onto property/make it their own.
(DEFECTIVE)
Statutory period in CA = 5 yrs with the payment of property

taxes.
Example: Would that “trespasser” who was fulfilling the element

(paying property taxes etc.) occupying 5 out of 20 acres get the
whole 20 acres?
Answer: YES!
how a vacation or seasonal property would be used by a true

owner if it's just for the wintertime, for winter related activities and
all the adverse possessor has to do is occupy it during the season
and that will fulfill the continuous and uninterrupted element that's
for vacation or seasonal property.
*STATE LAW*
Easement by prescription results in a right of use, adverse

possession results in the transfer of title.
Easement is created: voluntary grant by necessity and easement

by prescription.
Easement is terminated:
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6.2 Deeds
Deed – written instrument which when properly executed and

delivered conveys title to real property from one person (grantor)
to another (grantee).
Acknowledgement – A formal declaration made before an

authorized person (ex: a notary public) by a person who has
executed an instrument stating that the execution was his or her
free act.
In California, an acknowledgement is the statement by an officer
such as a notary that the signatory to the instrument is the person
represented to be.
Deed is an instrument (not just paper..it performs an operation)

Deed transfers title ownership to real property.
Sale of property valued more than $500 must be in writing.
Uniform Commercial Code governs the sale of personal

property. (effective in all 50 states)
Valid deed requires a competent grand tour:

1. 18yrs+
2. Needs to be sane (mental competency requirement.)
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2.7 Blind Advertising and Legal Advice: Not Designate Their License Status

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2.7 Blind Advertising and Legal Advice: Not Designate Their License Status

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Real Estate Principals

2.7 Blind Advertising and Legal Advice

A licensee advertises property for sale on behalf of another and does

The seller must disclose

Facts that would influence the decision making process of a

TRANSFER DISCLOSURE STATEMENT :

Written disclosure of defects on all one to four residential units is

• Natural Hazard Disclosures : flood, fire, and earthquakes.

• Megan’s Law (Federal Law) : Requires sellers to disclose the

• Lead Paint Disclosure (Federal Law) : “Target Housing” (houses/

2.9 Financial and Other Federal Laws and Disclosures

FEDERAL FAIR CREDIT REPORTING ACT (FEDERAL LAW) :

3. Consumer has right to know their FICO score.

4. The right to dispute incomplete or inaccurate information.

5. Right to have inaccurate or incomplete information removed or

What is the determinative of FICO Score? - Credit Worthiness

RESPA (REAL ESTATE SETTLEMENT PROCEDURES ACT) (FEDERAL

All creditors; must disclose to potential borrowers

$ Cost of Procuring Loan Fees for underwriting, processing etc. duties.

GFE (GOOD FAITH ESTIMATE)

ANNUAL PERCENTAGE RATE (APR)

Summary (Need to Know)

-THE 1964 CIVIL RIGHTS ACT:

-Understand the Exceptions to the anti discrimination laws (the

MAKES IT UNLAWFUL TO DISCRIMINATE IN THE RENTALS, SALE,

UNRUH CIVIL RIGHTS ACT

RESPA VS Reg Z: (federal laws)

Common violations of R.E law : misrepresentation

What is conversion? stealing.

Misrepresentation or trust funds are the top two.

Obtaining a license by fraud.

What must an applicant for a real estate license disclose?

3.1 Land, Real Estate & Real Property

The rights, or interests, that an individual has in a particular piece of

3.3 Water Rights

The right of lateral and subjacent support.

The right of lateral support is a right of a landowner to have the natural

RIPARIAN RIGHTS: (RIVER)

LATERAL RIGHTS: (LAKE)

3.4 The Legal Descriptions of Land

3 legal/formal descriptions of land:

2. US gov. Survey System (the township method) uses a number and

3. Lot and Blocked (Track) System

3.5 Government Rights in Land

The reversion of the State of property in event the owner thereof

Fiscal year starts : July 1 (July, Aug, Sept = 1st quarter)

CA property taxes due :

• Zoning is a form of police power.

• Controls land use and development

largely based on population density. (# of ppl in area)

zoning classifications = symbolized by a letter and a number.

Variance - The authorization to improve or develop a particular

Special Use Permit - proposed by an individual who does not

ADDITIONAL KEY TERMS :

Frontage – The linear distance along which a building faces a lot or a

Estate – The degree, quantity, nature, and extent of interest that

Reverter- reverts back to the grantor

Fee Simple Estate – Absolute ownership of real property; a

Fee Simple Absolute – An inheritable estate in land providing the

Fee Simple Determinable – An estate that will end automatically

Fee Simple on Condition – A defeasible fee (title), recognizable

Grantor – A person who conveys title to real property by deed.

Grantee – A person who receives title to real property by deed.