LEGAL
ASPECTS
OF REAL ESTATE
(Also Known as REAL ESTATE LAW)
By Michael Lustig
Copyright 2011 Real Estate License Services, Inc.
Smashwords Edition
LEGAL
ASPECTS
OF REAL ESTATE
(Also Known as REAL ESTATE LAW)
Textbook and Student Workbook, Combined
Course
by Correspondence.
For Qualification For a California Real Estate
Broker License or to Extend a California Real Estate License (D.R.E.
Approval #1226-90)
REAL
ESTATE LICENSE SERVICES
5059 Newport Avenue, #209
San Diego,
CA 92107
(619) 222-2425
Includes “Student Instructions,” Quiz Questions and Answers, and Page References for the Quiz Questions for the Course “Legal Aspects of Real Estate” Please Read and follow the complete “Student Instructions” just after this page.
Copyright 2011, 2003, 2000, 1991, 1990, 1989, 1988, 1987, 1983 Real Estate License Services, Inc. Copyright registered. All rights reserved. No part of this material may be reprinted, reproduced, transmitted, stored in a retrieval system, placed in a computer or on the Internet, or otherwise utilized, in any form or by any means electronic or mechanical, including photocopying or recording, now existing or hereinafter invented, nor may any part of this course be used for teaching without permission from the copyright holder.
STUDENT INSTRUCTIONS/GENERAL INFORMATION
The California Department of Real Estate DOES NOT REQUIRE COMPLETION OF QUIZZES OR ESSAYS PRIOR TO YOUR FINAL EXAM. Study the "Written Assignment" questions based on the chapter readings as well as the answers with page references that are on the following page. YOU DO NOT NEED TO SEND IN ANY "WRITTEN ASSIGNMENT" ANSWERS. To complete this course, just study the practice questions and answers, take the final exam online or on paper and, if on paper, make sure the final exam question sheets and completed Scantron answer forms are returned to us along with the completed "Certification of Test Administrator." THE FINAL EXAM IS OPEN BOOK. If you have any questions, please call (619) 222-2421.
1) This course consists of text reading and a final examination.
2) Practice questions ("Written Assignments") covering most of the chapters in the book are based on the text reading in each chapter. Answers to those practice questions (with page references) are included for your convenience and may be found on the page after this page. The "Written Assignments" are for your practice only. NO QUIZ QUESTIONS ARE REQUIRED PRIOR TO YOUR FINAL EXAM.
3) The minimum time limit to complete one course is 20 days from the date of enrollment. The maximum time limit to complete one course is six (6) months from the date of enrollment. Two three (3) month extensions may be obtained (see section below on Extensions and Re-enrollments). Under no circumstances can your enrollment last beyond twelve (12) months.
FINAL EXAMINATION: When you are ready to take the final test, please fill out the form "Request To Take Final Exam." You may mail it to Real Estate License Services, 5059 Newport Ave., #209, San Diego, California 92107, or fax to (619) 222-8593. Real Estate License Services will arrange for your final examination online or with a test administrator. If your final exam is not online, you may suggest who your test administrator will be. The examination consists of 100 multiple choice questions and you must complete it within 150 minutes (2.5 hours). When you finish the test, If your final exam is not online, turn it in to the test administrator, who will mail it to Real Estate License Services. The questions used for the final exam must be mailed to Real Estate License Services along with the answers.
GRADING OF THE FINAL EXAM AND ISSUING OF CERTIFICATES: A passing grade is based on a minimum passing score of 60% on the final examination. Only the final examination grade is used in determining the student's overall grade. Students will be assigned a letter grade, but the grading system reflects the 60% passing requirements.
% OF POINTS = GRADE
100% - 90% = A
89% - 80% =
B
79% - 70% = C
69% - 60% = D
59% - 0%
= Fail. In this case the course would have to be repeated and passed
in order to receive credit.
An official certificate of your course grade will be mailed to you within two weeks after receipt of your completed final examination if taken with a test administrator. Additional certificates are $15.00 each.
REFUNDS: Students may apply in writing to REAL ESTATE LICENSE SERVICES, mailing address, 5059 Newport Ave., #209, San Diego, California 92107 within 15 days from the date of enrollment and cancel and receive a refund for the full tuition. All REAL ESTATE LICENSE SERVICES materials must be returned in good condition at the time of cancellation; the materials should not be soiled, torn or marked upon. Refunds are not allowed if any work has been submitted.
EXTENSIONS AND RE-ENROLLMENTS: If the course has not been completed within six (6) months of enrollment, the student may receive an extension of three (3) months by paying an extension fee of $35.00. If at the end of that three month extension the student still has not completed the course, a second three (3) month extension may be obtained by paying an additional fee of $30.00. IN NO CASE MAY THE PERIOD OF ENROLLMENT EXTEND BEYOND TWELVE (12) MONTHS. If the student has not completed the course within 12 months from the original date of enrollment, the enrollment expires and no further extensions are allowed. The student must re-enroll and begin the course over again in order to complete the course. The student may re-enroll under such circumstances for a discounted re-enrollment of $40.00 per course.
TRANSFERS: Courses may be transferred to another person by paying a transfer fee of $30.00 per course. Transfers are not allowed if any work has already been submitted.
LEGAL ASPECTS OF REAL ESTATE
To finish this course, you need to do the following:
1. Quizzes are NOT required. Included below are the answers to the questions at the end of each chapter. Page references for topics in each question and answer are also listed. Read the book and study the questions and answers. You may take your final exam 18 days after having possession of the textbook.
2. When you’re ready to take the final exam, please fill out the form “Request To Take Final Exam.” and fax to (619) 222-8593 or mail to: Real Estate License Services, 5059 Newport Ave., #209, San Diego, CA 92107. Real Estate License Services will arrange for your final exam online or with a test administrator.
Answers with Page References to Practice Questions at the end of Each Chapter in the Textbook.
TABLE OF CONTENTS
Chapter 1 REAL ESTATE AND THE LAW
Chapter 2 LEGAL DOCTRINES AND CONCEPTS
Chapter 3 THE COMPONENTS OF PROPERTY
Chapter 5 ESTATES AND TITLES: REAL ESTATE OWNERSHIP LAW
Chapter 6 REAL ESTATE LICENSE LAW
Chapter 7 MECHANIC’S LIENS & OTHER ENCUMBRANCES
Chapter 10 LANDLORD AND TENANT LAW
Chapter 11 THE CALIFORNIA CODES AND REAL ESTATE
Chapter 12 NATIONAL LAW:IMPORTANT FEDERAL LAWS AFFECTING REAL ESTATE
Chapter 13 CASE LAW:IMPORTANT COURT DECISIONS IN REAL ESTATE
Chapter 14 OTHER CALIFORNIA LAWS AFFECTING REAL ESTATE ACTIVITIES
INTRODUCTION
This course is organized in such a way as to acquaint you with a very broad spectrum of the legal aspects of real estate, especially as the real estate business is practiced in California. Special emphasis is given to the so-called “Real Estate Law” as found in the Business and Professions Code of California, as well as: The Regulations of the Real Estate Commissioner, the Subdivision Map Act, the Subdivided Lands Law, and the Administrative Procedures Act. These codified statutes and regulations cover such diverse matters as licensing law, map laws for subdivisions, and laws designed to prevent fraud and misrepresentation. They are the heart of California real estate law.
In addition, you will be acquainted with legal doctrines and concepts and shown how they apply to real property and the regulation of real estate activities. Besides an exploration of the basic laws mentioned above, you will be introduced to pertinent sections of other California legal codes, as well as a study of applicable case law (i.e., judgments rendered in important court decisions concerning questions of real estate).
Several chapters concern themselves not merely with a particular law, such as the Subdivided Lands Law, but with broad concepts and the laws which pertain to them (i.e., the concepts of ownership, agency, and contracts).
An attempt has been made to demonstrate, as often as possible, how the law is applied in real circumstances and what bearing it might have upon your own conduct. The language of law, so-called “legalese,” may seem difficult at first, but as you proceed you should become relatively fluent in its use, as terms are frequently reintroduced and explained within a meaningful context. If you find you have trouble with the language, it would be helpful to avail yourself of a good legal dictionary or a dictionary of real estate terms.
Personal pronouns are used interchangeably in this course, so that whenever a masculine gender pronoun is used (his) it is meant to imply also the female gender (her).
New Department of Real Estate Rules Allow You to Avoid All Quizzes and to Go Straight to Your Final Exam, Which is Open Book! You May Suggest Your Own Test Administrator Also!
Chapter 1
REAL
ESTATE AND THE LAW
The study of Real Estate Law is primarily a study of the legal rights and duties that are incidents of the acquisition, possession, and transferal of real property. The parties involved in the various aspects of property ownership include not only the buyers and sellers, but the mortgage lenders, real estate brokers, escrow companies, appraisers, property managers, developers, building contractors, suppliers, planning agencies, building inspectors, and the various civil servants and legislators who make laws and regulate them.
With regard to the owner of a piece of real property, the laws govern not so much his or her relation to the owned property, but rather the relation between the owner and society. While the property owner has certain rights with respect to his property, he or she also has certain social obligations. Wherever there are rights, there will always be concurrent responsibilities, and these are usually expressed as laws.
Obviously, inherent in this balance between private rights and social obligations is the risk of imbalance. The United States has attempted to achieve the necessary balance by attempting to preserve private rights so long as they are compatible with the social interest as it is currently perceived by society and as expressed politically.
When most people think of law as it relates to the private ownership of property (if they think about the subject at all), it is likely that they think about the growth of regulation. When viewed from the historical perspective, private ownership of property has indeed become progressively regulated. Common law intervened at first to ensure that no one used his or her property in such a way as to interfere with the use and enjoyment of land by others. Zoning laws have been created out of state police powers to protect the health, safety, morals and general welfare of the people. Recent environmental concerns have brought even more laws to bear upon the uses of real property.
“Real estate law” is actually comprised of a large body of rules of social conduct, ranging from constitutional law to federal, state, and local statutory law, law derived by precedent from court cases, and the regulations of agencies which administer the laws.
“Law” itself can be defined as a body of rules adopted by an organized society in order to regulate human behavior. Anyone with a passing acquaintance with human behavior will immediately realize that a law is something which requires enforcement. Society therefore gives the machinery of government the job of enforcement, and provides the threat of public sanctions to compel people to follow the rules.
As mentioned, wherever there are rights, there are obligations. In the study of law, we speak of a legal right and a legal duty. These are correlative terms; that is to say, one can only exist if the other does. For example, if I own a certain legal right, society owes a legal duty to respect that right and my enjoyment of it.