1. Part 1 of the Real Estate Law covers licensing.

2. Part 2 of the Real Estate Law covers transactions and includes the Subdivided Lands Law.

3. The Regulations of the Real Estate Commissioner clarify and interpret the Real Estate Law.

1. The Real Estate Commissioner heads the DRE.

2. The Real Estate Advisory Commission is appointed by the Real Estate Commissioner.

1. A real estate brokerage formed as a corporation must have a licensed broker designated as the responsible broker-officer.

2. A partnership can act as a real estate brokerage.

1. An individual, corporation or partnership can use a fictitious business name.

2. A fictitious business name statement must be filed with the county recorder in the county of the broker's principal business address.

3. A copy of the fictitious business name statement must be sent to the Real Estate Commissioner.

1. The broker's license (and the license of any salesperson employed by the broker) must be available for inspection at the broker's principal place of business.

2. If a broker has more than one place of business in the state, each branch office must be separately licensed and the license must be available for inspection there.

1. Under the Real Estate Law, the salesperson is always considered the employee of the broker.

2. A written employment agreement is required.

3. A salesperson's license can be transferred to a new broker.

4. If a salesperson is discharged, the broker must immediately file a certified, written statement of facts with the Real Estate Commissioner.

1. The business must be accurately valued.

2. Potential buyers must be financially qualified.

3. All transaction requirements must be followed, such as business permits, licenses and clearances.

1. CCC governs sale or transfer of goods ordinarily held for sale in the course of business.

2. CCC protects creditor of the seller in a bulk transfer of goods that are not part of the

seller's ordinary course of business.

1. PRLS license is for two years.

2. Applicant for PRLS license must provide a $2,500 surety bond or cash deposit for each business location.

3. Information on PRLS licenses is available from DRE, P.O. Box 187002, Sacramento, CA 95818-7002, (916) 227-0904.

1. Applicant must be at least 18 years old, pass a qualifying exam and have been active as real estate salesperson for at least two of preceding five years, or provide satisfactory proof of equivalent experience, and meet educational requirements.

2. Applicant must have successfully completed eight three-semester-unit college-level courses.

1. Applicant must be at least 18 years old, pass a qualifying exam and meet educational requirements.

2. Applicant must have successfully completed a college-level course in Real Estate Principles and two additional courses.

3. The two additional courses can be postponed for up to 18 months and a conditional license can be issued subject to their successful completion.

1. Salesperson's examination has 150 questions and 70% must be answered correctly.

2. Broker's examination has 200 questions and 75% must be answered correctly.

1. Except for new salespeople who must fulfill statutory course requirements in the first 18 months of licensing, the initial license term is four years, as are subsequent renewal terms.

2. An expired license can be renewed, if all educational requirements are met, up to two years after expiration.

--Licensee may be represented by an attorney.

--Testimony is taken under oath.

--Other evidence may be presented.

--If charges are not dismissed, licensee may be subject to license suspension or revocation.

--If the license is revoked, application for reinstatement cannot be made for one year.

--Restricted license is also possible, if Commissioner warrants.

1. Misrepresentation

2. False promise

3. Continued misrepresentation

4. Undisclosed dual agency

5. Commingling

6. Not specifying listing termination date

7. Making a secret profit

8. Combining listing with option without informed consent of seller

9. Dishonest dealing

10. Obtaining signature of prospective purchaser of a business opportunity without owner's authority

11. Wilfully or repeatedly violating any provision of the Civil Code regarding real property transfer disclosures.

1. Obtaining a license by fraud

2. Criminal conviction

3. False advertising

4. Violations of other sections

5. Misuse of a trade name

6. Conduct warranting denial

7. Negligence or incompetence

8. Negligent supervision of salespersons

9. Violating government trust

10. Other dishonest conduct

11. Restricted license violation

12. Inducement of panic selling

1. Missions, established by Franciscan missionaries

2. Presidios, which were military posts

3. Rancho grants of land for grazing or farming

4. Pueblos

5. Spanish civil law

1. In 1822, Mexico established its independence from Spain and California became possession of Mexico.

2. War between United States and Mexico ended with the Treaty of Guadalupe Hidalgo in 1848.

1. The Board of Land Commissioners was formed by Congress in 1851 to settle claims to private land.

2. Appeal from the Board of Land Commissioners was to the U.S. District Court, then the U.S. Supreme Court.

1. Land ownership

2. Population

1. The land, which encompasses

2. Fixtures

3. Appurtenances

4. Emblements (growing crops), also referred to as fructus industriales (and not fructus naturales)

1. Method by which the thing is attached

2. Adaptability of the thing for the land's ordinary use

3. Relationship of the parties

4. Intention of the person in placing the item on the land

5. Agreement of the parties

1. Item was installed for purposes of trade, manufacture, ornament or domestic use and it can be removed without injury to the premises; or

2. Tenant installed fixture believing in good faith, but under a mistake of law or fact, that the fixture could be installed and removed, in which case the tenant pays for any property damage resulting from the removal

1. Fixtures are included in a grant of the land, in the absence of an agreement to the contrary.

2. Land ownership and transfer of title subject to the laws of the state where the land is located.

3. Personal property ownership and transfer of title are subject to the laws of the state where the property owner resides, even if the personal property is located elsewhere.

4. A contract involving real property generally requires a writing. A writing is required for a personal property transaction over a certain amount, or as required by the California Commercial Code.

5. Real property usually is transferred by deed; personal property usually is transferred by bill of sale.

6. Real property transfers are recorded; personal property transfers usually are not.

7. Real property and personal property are subject to different tax laws.

1. A subdivision map (plat map) showing tract, block and lot numbers is filed with the county recorder.

2. It is usually sufficient to give the city name, county name, tract name and number, and block and lot numbers, but it is better practice to also give the book and page number where the map appears, as well as the date the map was recorded.

1. It is the method used by the United States Surveyor General to survey public lands.

2. It uses distances measured from baselines that run east-west and meridians that run north-south.

In California, they are:

3. Land is divided into townships, which:

4. Rectangular survey system descriptions begin with the smallest area and end with the largest area; for example, "the North 1/2 of Section 17."

5. In computing land area by this method, multiply the number of acres in a section by the fractional parts of a section included in the described parcel.

6. Units of linear measurement should be remembered, as well as the fact that there are 43,560 square feet in an acre.

1. It is based on measured distances, or metes, from a point of beginning along bounds (natural or artificial boundaries) or with reference to individual monuments (markers).

2. Angles of measurement based on the degree of deviation from north or south may also be given.

1. It identifies every parcel of real estate by its own Torrens certificate, which is used to transfer title.

2. The Torrens system is still found in Australia, Canada, Hawaii and parts of other states, as well as southern California.

1. A fee simple estate is a present, possessory interest that conveys the maximum "bundle of rights."

2. A life estate conveys a right to possession only during the lifetime of an identified person(s).

1. Tenancy in common:

2. Joint tenancy has:

3. Community property is property acquired by husband and wife during marriage.

4. Property owned by a partnership is owned by the individual partners as a tenancy in partnership.

1. The business is conducted under the proprietor's or a fictitious business name.

2. Business income reported on prop.'s tax return.

3. Proprietor responsible for business's debts.

1. The corporation must have a charter.

2. The corporate form of business ownership offers reduced liability for officers, directors and shareholders.

3. The corporation pays its own taxes; incorporating under Internal Revenue Tax Code subchapter S allows profits to flow directly to shareholders.

4. A corporation can be established on a nonprofit basis.

5. A corporation can own, lease and convey real estate.

1. A real estate investment trust (REIT) holds real estate or mortgages for investors, who own shares of the trust.

2. In a living trust, the trustor is also the beneficiary. Title is held in the name of the trustee, although use of the trust property belongs to the beneficiary and, on the beneficiary's death, to the contingent beneficiary named in the trust.

1. One or more persons must be named the general partner.

2. Limited partners have limited liability for partnership obligations.

3. A real estate syndicate is usually formed as a limited partnership; if there are more than 100 participants, the syndicate must be approved by the Department of Corporations.

1. Intestate succession means that a decedent left no will. California law specifies how property is to be distributed in that event.

2. A will can be amended by a codicil.

3. A formal, witnessed will must follow legal formalities. The State Bar of California provides statutory will forms for a nominal fee.

4. A holographic will must be written entirely in the testator's own handwriting, but need not be witnessed.

5. Probate is the court procedure for distributing a decedent's property.

1. Improvements

2. Accretion--the increase of new soil through the action of a flowing body of water

3. Reliction is the process by which a moving body of water recedes and uncovers new land area.

1. Adverse possession--requires a use that is ONCHA--open, notorious, continuous, hostile and adverse

2. Prescription--Easement by prescription is a private easement acquired by adverse use, but without payment of property taxes.

3. Abandonment is the voluntary surrender of an easement by prescription, or a leasehold by a lessee, with the intention of terminating possession. An easement by prescription is the only easement that may be lost by abandonment.

1. A private grant from grantor to grantee.

2. A public grant transfers property from a public entity.

3. Public dedication is used by an owner of private property to transfer title for public use, by:

4. Operation of law or by a court includes:

5. Execution sale

6. Forfeiture gives the grantor (or successor) the right to reacquire title when a condition subsequent in a deed is breached.

7. Bankruptcy is a federal court proceeding.

8. Marriage can determine property ownership, since property acquired during marriage that is not separate property is community property.

9. Escheat transfers title to property to the state.

10. Eminent domain is government's power to take private property for public use by condemnation, with compensation to owner based on an appraisal of the property's fair market value.

11. Equitable estoppel may result in a transfer of after-acquired title.

1. Writing

2. Description of the parties, including full name and marital status of each

3. Grantor legally capable of executing a written conveyance

4. Adequate description of the property conveyed

5. Granting clause in which the necessary words of conveyance are used (the word "grant")

6. Signature of grantor

7. Delivery to grantee and acceptance by grantee

1. Acknowledgment is a recognized (notarized) declaration of the grantor that execution of the document is the grantor's own act. For deeds, notary takes thumbprint of signer in official journal.

2. Recording is ineffective unless done in the office of the county recorder where the property is located. If done correctly, recording gives constructive notice to world of the conveyance.

1. A grant deed contains the word "grant(s)."

2. A gift deed is a grant deed with a gift clause and may not be used to defraud creditors.

3. A quitclaim deed conveys whatever interest the grantor may have.

4. A warranty deed expressly warrants grantor has good title; not often used in California.

5. A trust deed can be used as a security instrument.

6. A reconveyance deed is used by the trustee to return title to trustor (borrower) after the debt is paid, on notification to the trustee by the beneficiary (lender).

7. A sheriff's deed is given to the purchaser at a court-ordered sale to satisfy a judgment and carries no warranties.

8. A tax deed is issued by the county tax collector when property is sold for nonpayment of taxes.

1. Preliminary notice of the lien right is required.

2. Starting time is the date the work begins.

3. Completion time establishes the period in which a lien can be filed with the county recorder. It occurs when

4. Notice of completion can be filed by the owner with county recorder within ten days after completion of the work of improvement.

5. Filing time of a mechanic's lien:

6. A mechanic's lien may be terminated by claimant's voluntary release of lien filed with the county.

7. A mechanic's lien must be enforced within 90 days after filing of notice of completion.

8. Owner or anyone else with an interest in the property affected by the claimed lien (such as a lender, original contractor, subcontractor or subcontractor) who disputes the validity of the lien can stop foreclosure on the property by filing a lien release bond with the county

recorder. The bond must be:

9. Notice of nonresponsibility protects the owner if unauthorized work is being done. Notice must be:

1. An attachment may be used to encumber property if litigation if pending. Plaintiff requests attachment of defendant's property.

2. The judgment of a court that is not appealed to a higher court becomes final after the time for appeal has passed.

3. A writ of execution is a court order directing the sheriff to sell property to satisfy a judgment debt.

4. Discharge of debt is the satisfaction of a debt.

1. Servient tenement is burdened with the easement.

2. Dominant tenement is benefitted by the easement.

1. "Run with the land" and be included with a conveyance of the dominant tenement or

2. Be an "easement in gross", in which case the use is personal and does not run with the land.

Examples include railroad rights of way and pipeline and power line easements.

1. Express grant or reservation in a deed

2. Implication of law when a landowner sells a parcel that can only be reached by travelling over other land owned by the same person and the easement way has been used by the landowner in the past. Such an easement by necessity provides a method of ingress and egress from a landlocked parcel over

3. Prescription, if the easement use is

4. Condemnation by a public agency of a right of use on behalf of the holder of the new easement, which could require compensation to the landowner

1. Express agreement of the parties

2. Action to quiet title brought against anyone claiming an easement

3. Abandonment (nonuse) of a prescriptive easement (but not an easement obtained by grant) for five years

4. Estoppel, if

5. Merger of the easement with the servient tenement (the same person owns both dominant and servient tenement)

6. Destruction of the servient tenement

7. Adverse possession of the easement by the owner of the servient tenement

8. Excessive use which would not have been expected when the easement was granted or obtained

1. Permission to come onto land

2. A nonexclusive right, unless the license agreement states that it is exclusive

3. Personal property, rather than real property

4. Not transferable with the land and not assignable

5. Temporary, rather than permanent

6. Revocable at any time, without prior notice, although the landowner may be prevented from revoking by estoppel if the licensee has been allowed to act to his or detriment in reliance on existence of the license (such as when a licensee is allowed to improve the roadway over which the licensee has a license to travel)

1. Usually are found in a Declaration of Restrictions

2. "Run with the land" for the benefit of other property in a subdivision

3. Are enforceable against future owners

4. Can be removed only by agreement of all those who have the right to enforce them, unless they are written to apply only to the original grantee and not subsequent owners

1. On breach (violation) of a covenant, property owners who benefit from the covenant may seek a court injunction prohibiting or ordering removal of the cause of the breach, or money damages.

2. A covenant might also be found in a lease.

1. Cannot impose a restraint on alienation

2. Should appear on the face of the deed

3. Is enforceable generally by the person imposing the condition--in a sale, the seller

1. It is imposed in the grantee's deed.

2. It cannot have an illegal purpose.

3. Restrictions frequently are used by homeowners' associations to ensure uniform appearance and maintenance of homes in a subdivision.

4. Remedy for breach is injunction or money damages.

1. Expiration of their terms

2. Voluntary cancellation

3. Merger of ownership

4. Governmental act, such as the legal prohibition against restrictions based on race or religion

5. Change in condition that prompts court action to remove the restriction or makes the restriction unenforceable

1. Extent of encroachment

2. Relative difficulty to remove it

3. Whether encroaching party acted by mistake

1. A homestead is an owner-occupied dwelling, which could be a house and land, mobile home and land, boat, condominium, planned development, stock cooperative or community apartment project.

2. A homestead can be community property, separate property of either spouse, or separate property of an unmarried individual.

3. Two or more unmarried persons sharing ownership can each claim a separate homestead exemption.

1. costs of execution;

2. holders of liens and encumbrances on the homestead, with tax liens paid off first;

3. homeowner in amount of homestead exemption only;

4. creditors; and if any amount remains,

5. homeowner.

1. A subagent assists the agent.

2. A cooperating broker is a broker other than the listing broker who sells the listed property.

3. Cooperating split is division of compensation between listing broker and cooperating (selling) broker.

4. Multiple listing service (MLS) enables broker participants to share information on properties.

1. Employee is closely supervised and probably salaried, while independent contractor sets own work schedule and usually makes own social security, tax and other payments from commissions.

2. Real estate salesperson is always treated by Real Estate Law as employee of broker, regardless of how job responsibilities or compensation are structured.

1. Real Estate Law requires knowledge and consent of both principals before undertaking dual agency.

2. Dual agency can be created when buyer's broker is member of MLS and thus also represents seller.

3. Inherent conflict of interest in dual agency places heavy demand on agent to fairly represent both parties.

1. Agency relationship must be explained and disclosure form presented "as soon as practicable" but

2. Selling agent's relationship must be confirmed in writing:

3. Listing agent's relationship must be confirmed in writing:

1. Special power of attorney applies to a specific act or acts.

2. General power of attorney applies to all business or other dealings of the principal.

1. A writing may be required by the Statute of Frauds. Examples include:

2. Real Estate Law requires that real estate broker and salesperson's employment agreement be in writing.

1. Actual authority is specified in agreement.

2. Agent has inherent authority to perform necessary activities.

3. Agent may have ostensible authority if the agency is created by estoppel (reliance by third person).

4. Agent may have apparent authority if agent claims (falsely) to represent someone.

5. Handling deposits is one of agent's most important responsibilities.

1. Open listing is nonexclusive, which means:

2. Exclusive agency listing means that the property owner cannot list the property with another broker, but the owner can sell the property on his or her own and avoid paying a commission.

3. Exclusive authorization and right-to-sell listing is most commonly used form of listing agreement.

4. Net listing provides agreed-on amount to buyer, with broker taking difference between guaranteed net and actual sales price as commission.

1. Buyer-broker agreement will stipulate responsibilities of broker and form and amount of broker's compensation.

2. Compensation may be based on buyer's broker's share of listing broker's commission from seller.

1. Duty of loyalty, which means that the agent acts as a fiduciary and must consider the principal's interests first and foremost

2. Duties of good faith and honesty

3. Duty of obedience in relevant matters

4. Duty of full disclosure to the principal of all material facts concerning the transaction and any potential conflict of interest (Agent may make no secret profit in the transaction.)

5. Duty of reasonable care and skill in completing the goal of the agency relationship--in a listing agreement, finding a ready, willing and able buyer for the listed property

1. Payment of agreed-on compensation if agent is procuring cause of a subsequent transaction or has met the requirements of the agency agreement

2. Duty of care in not interfering with the agent's prospective economic advantage (the agent's business operations)

1. Real estate agent

2. Seller

1. Recovery Account is administered by Department of Real Estate.

2. Account funding comes from 5% of license fees.

3. If recovery is allowed, the real estate licensee's license is automatically suspended.

1. Fulfillment of the agency agreement

2. Expiration of the term of the agreement

3. Destruction of the property

4. Death of either principal or agent

5. Incapacity of agent to act as such, or incapacity of principal to contract

6. Agreement of principal and agent

7. By operation of law, as in a bankruptcy

1. Minor (in California, anyone under 18 years old) cannot make a real estate contract, unless emancipated.

2. Mentally incompetent person cannot contract.

3. Property of deceased person is handled by estate representative.

4. Business entity can contract, although authority of person acting on behalf of the business should be verified and documented.

1. Rejection of offer can be done by failing to accept it, or by proposing a change to the offer (a counteroffer).

2. Counteroffer results from any change in the terms of the original offer and acts as a rejection of the original offer.

3. Revocation of an offer is possible at any time before acceptance, unless offer was supported by consideration (such as in an option).

4. Offer must be made freely and voluntarily. The offeree must not be acting under threat of harm to a person or thing (in which case any resulting contract is voidable).

5. There must be no undue influence or fraud, whether the fraud is affirmative (deliberate misstatement) or negative (concealment). Penalties for fraud can be severe, including criminal prosecution, award of damages to injured party, and loss or suspension of real estate license.

6. Definite terms must be expressed as to subject matter of contract.

1. An agreement that won't be completed within one year of the date it is entered into

2. An agreement for the sale or lease (for more than one year) of real property, and an agency agreement allowing the agent to handle such a transaction on behalf of a principal

3. An agreement authorizing a real estate broker, for compensation or a commission, to sell real property or lease it for more than one year, or to find a purchaser or lessor

4. An agreement by a purchaser of real property to pay a debt secured by a mortgage or deed of trust on the property, unless the purchaser has assumed the debt

1. Money damages may be awarded to compensate the injured party.

2. Specific performance--the requirement that the contract be completed on its stated terms--may be ordered by the court if the subject property is unique and irreplaceable.

3. The injured party could waive the breach and enforce the remaining terms of the contract.

1. Lawsuit to recover title to real property must be brought within five years.

2. Action based on a written instrument must be brought within four years.

3. Action based on fraud must be brought within three years of discovery of the fraud.

4. Action based on oral agreement must be brought within two years.

5. Action based on a judgment must be brought within ten years of the awarding of the judgment.

1. Must be written and typically includes use of a printed form.

2. Real estate broker (or associate licensee) may explain the meaning and purpose of the contract terms to the buyer initiating the contract and the seller to whom it is presented, but the broker is not allowed to give legal advice.

3. The contract terms should be as complete as possible to avoid ambiguities and prevent misunderstandings.

4. A counteroffer by seller rejects the buyer's offer and makes a new offer on seller's proposed terms.

1. The option gives a potential property buyer, in exchange for payment to the seller, the right to complete the purchase before a stated time. The lease option allows the prospective buyer to occupy the property during the option period.

2. A tax-deferred exchange may be made of like-kind properties held for business or investment.

1. The general health of the economy affects the availability of funds for borrowing.

2. The Federal Reserve Bank System (the Fed), created by Congress in 1913, serves as the central bank of the United States and influences the money supply in several ways.

3. There are 12 regional Federal Home Loan Banks. The Federal Home Loan Bank of San Francisco covers the Eleventh Federal Home Loan Bank District, which includes California, Nevada and Arizona.

4. The Federal Deposit Insurance Corporation (FDIC) insures individual accounts in participating banks and savings and loan associations, up to a maximum of $100,000.

1. Office of Thrift Supervision (OTS) was created to take over the savings and loan supervisory responsibilities that had belonged to the Federal Home Loan Bank Board.

2. Resolution Trust Corporation (RTC) was created to take over failed institutions and liquidate their assets (formerly the responsibility of the Federal Asset Disposition Association).

3. FIRREA also established requirements for appraisals of property in federally related transactions, such as those involving loans made by a federally chartered or insured institution, loans insured or guaranteed by a federal agency and loans sold on the secondary mortgage market.

1. State law

2. Federal law preempts state law.

1. Payment terms define the type of note used.

2. A promissory note qualifies as a negotiable instrument if it is:

3. Holder in due course (HDC) is one who takes negotiable instrument for value, in good faith and without notice of any defense to its enforcement.

1. A mortgage hypothecates property to secure the payment of a debt or obligation.

2. The deed of trust is the form of security instrument preferred in California.

3. Summary of differences between mortgage and trust deed include:

1. Savings and loan associations are federally or state chartered, but all must be members of the Federal Home Loan Bank System.

2. Commercial banks can be federal or state; if federal, they must be members of the Federal Reserve System, while membership is optional for state banks.

3. Insurance companies typically finance large commercial projects but also invest in the secondary mortgage market.

4. Mutual savings bank distributes its earnings to depositors as dividends, rather than interest.

5. Credit unions are organized under the National Credit Union Administration.

1. Mortgage companies make real estate loans, which they then sell to investors.

2. Private individuals hold one-fourth of all mortgage debt.

3. Nonfinancial institutions include pension funds, colleges and universities, trusts, estates, mortgage investment companies and other groups.

1. The law sets maximum mortgage broker commissions for first trust deeds of less than $30,000, and second trust deeds of less than $20,000. Limits are also set on the maximum chargeable costs and expenses incurred by mortgage brokers.

2. A broker who negotiates or makes a loan must complete and present a Mortgage Loan Disclosure Statement to the borrower before the transaction is completed.

3. Advertising must include a statement that the broker is licensed by the Department of Real Estate.

1. Commissioner of Corporations issues licenses.

2. Real estate brokers are exempt from the law, as are federally or state licensed lending institutions, trust companies and insurance companies, estate representatives, trustee under a deed of trust and individuals lending their own money

3. Also exempt is a California finance lender, as defined in the California Finance Lenders Law.

1. A creditor for purposes of the act is defined.

2. Exempt transactions are specified.

3. Truth-in-lending disclosures must be made in a disclosure statement which must include:

4. Three-day right to rescind does not apply to residential purchase money first mortgage or trust deed loans.

5. Advertising regulations must be followed.

1. Federally related mortgage loan is one made by a lender insured by FDIC or any other federal agency or one financed through any federal agency, such as FHA or VA, or sold to FNMA, GNMA or FHLMC.

2. Special Information Booklet must be provided.

3. Good faith estimate of transaction closing costs must be made.

4. Uniform Settlement Statement must be prepared and presented to borrower and seller no later than day of closing.

5. No fee is allowed for preparation of RESPA or Truth-in-Lending documents.

1. The Equal Credit Opportunity Act prohibits discrimination based on age, sex, race, color, marital status, religion or national origin.

2. Funding usually is handled through escrow.

1. FHA is a division of the Department of Housing and Urban Development (HUD).

2. Section 203 of Title II of the National Housing Act sets requirements for housing construction and finance to receive federal mortgage insurance.

3. FHA periodically adjusts maximum insured loan amounts depending on regional market conditions.

4. Minimum down payment amount is set by FHA based on purchaser's acquisition cost.

5. Acquisition cost is purchase price plus all nonrecurring closing costs.

6. FHA insurance premium is one-time payment to FHA at closing, but is not considered part of acquisition cost.

7. FHA does not set interest rates.

8. FHA-insured loans carry no prepayment penalties.

9. Lender can charge discount points to increase effective yield.

10. Both amortized (including negative amortization) and adjustable-rate loans are allowed.

11. HUD Direct Endorsement Plan allows qualified lenders to process loans without prior HUD review.

1. Covers first mortgage loans, and secondary loans of less than 40% of property value.

2. VA-guaranteed loans are available only to qualified veterans and spouses.

3. Certificate of eligibility establishes veteran's entitlement, that is, the amount of loan guarantee available to that individual.

4. VA sets maximum amount of loan guarantee, which is subject to change.

5. Veteran may be entitled to restoration of entitlement if:

6. The certificate of reasonable value (CRV) is the VA's appraisal that sets the upper limit of value on which the amount of loan guarantee is based.

7. Fully amortized and other loan payment plans are allowed.

8. VA does not set interest rates.

9. If CRV does not exceed amount of loan guarantee, VA does not require down payment, although lender may. If CRV does exceed loan guarantee, veteran must pay difference in cash from personal resources (not borrowed funds) at closing.

10. Refinancing is allowed.

11. VA will provide financial counseling if veteran is in default on loan payments.

1. FHA insures first mortgages only.

2. FHA sets loan maximum; VA does not.

3. Both FHA and VA allow borrower and lender to negotiate interest rate.

4. FHA requires minimum down payment; VA does not, although lender may.

5. Both FHA and VA allow service charges and other costs to be charged to borrower.

6. Both FHA and VA allow prepayment without penalty.

7. Both FHA and VA allow refinancing to prevent default.

8. Both FHA-insured and VA-guaranteed loans must meet the requirements of RESPA.

1. Funding for Cal-Vet loans comes from state-issued bonds.

2. CDVA buys the property, which it resells to the veteran on a land contract.

3. Loans are available only on California property and only to veterans currently residing in California who meet service requirement, or qualified spouses.

4. Loan application must be made before property purchase.

5. Interest rate subject to change annually, depending on state's bond costs.

6. CDVA establishes county-by-county limits on maximum loan amount.

7. Secondary financing is allowed if total financed is no more than 90% of appraised value.

8. CDVA sets amount of minimum down payment.

9. Veteran is allowed to transfer loan eligibility to another property, if all requirements are met.

1. The new loan encompasses (wraps around) the existing loan.

2. A "wrap" is possible only if the original loan documents permit it.

1. FNMA serves as a secondary market for both government-sponsored (FHA-insured or VA-guaranteed) loans, as well as conventional loans.

2. To be purchased, a loan cannot exceed the maximum limit established by a formula prescribed in the Housing and Community Development Act of 1980.

3. FNMA guarantees payment of all interest and principal to the holder of its mortgage-backed securities.

4. In 1968, FNMA was divided into a private-shareholder corporation (called FNMA) and another organization, the Government National Mortgage Association.

1. A binding contract and

2. Conditional delivery of the instruments of transfer to the escrow holder

1. Escrow instructions are bilateral when they are given by the parties jointly, as is the custom in southern California, where they are given when escrow is opened.

2. Escrow instructions are unilateral when they are given separately by each party, as is the custom in northern California, where the parties sign escrow instructions shortly before closing.

3. After transmittal to the escrow agent, escrow instructions can be changed only by signed agreement of both parties.

1. The escrow holder is the agent of both parties initially and of each separately as various conditions to closing are performed.

2. The escrow holder should not be a party to the transaction.

3. The escrow holder must be impartial and should not give advice on any part of the transaction.

1. An escrow agent must be licensed by the Commissioner of Corporations, unless entitled to an exemption. Exempt are banks, savings and loan associations, title insurance companies, attorneys and real estate brokers (with certain restrictions).

2. A licensed escrow must meet certain requirements.

1. The exemption is personal and applies only to the real estate broker and not to associate licensees.

2. The broker must be the selling or listing broker in the transaction or a party to the transaction.

3. Escrows must be only an incidental part of the broker's real estate business.

4. The broker may not form an association with other brokers for the purpose of conducting escrows.

5. The broker can advertise escrow services only in the context of a real estate brokerage, and may not use a name that would mislead the public.

6. All escrow funds must be kept in a trust account subject to inspection by the Commissioner of the Department of Corporations.

1. The escrow agent should be impartial to all parties to the transaction.

2. A conflict between the parties should be resolved by means of an interpleader action in court.

3. The escrow should disclose materials facts that come to the escrow's attention and are unknown to the parties.

4. The escrow must keep accurate, up-to-date records.

5. The escrow must provide full and clear information in the settlement statements to the parties.

1. Date and place of signing of contract by buyer(s)

2. Identifying information about the buyer(s)

3. Purchase price of property, amount of deposit and how made and held prior to closing

4. Financing terms

5. Encumbrances affecting title, which may be shown in the preliminary title report

6. Required property inspections, and who pays

7. Name of escrow holder, and who pays for escrow

8. Other documents

9. Names of all real estate brokers and salespeople, negotiated sales commission, and how and when paid

10. Signatures of all parties, including broker(s);

if signed by salesperson, employing broker must review, initial and date contract within five days.

1. Escrow instructions

2. Copies of contracts affecting escrow

3. Review of preliminary title report

4. Review of all loan documents

5. Review of hazard insurance policies taken over from seller

6. Review of property inspection reports and making of final property inspection before closing

7. Examination of bill of sale covering any personal property

8. Deposit of necessary cash for closing

1. Escrow instructions

2. Copies of contracts of seller affecting escrow

3. Seller's deed and title insurance policy and any unrecorded instruments affecting title

4. Information on status of existing loans

5. Certificates or releases on any encumbrance to be paid off through escrow

6. Any existing hazard insurance policies to be assigned to buyer

7. Any subordination agreement required to the contract

8. Tenant information, if applicable

9. Executed bill of sale on any items of personal property, or security agreement, if purchase is by installments

10. Any other documents or approvals needed to close the sale

1. Delivering copies of signed purchase contract to the parties

2. Delivering and explaining escrow instructions to parties for signing and return to escrow holder

3. Copies of seller loan information/other documents

4. Advising buyer(s) to obtain legal advice on how to take title

5. Reminding sellers to make loan payments up to time of closing and maintain property

6. Reviewing preliminary title report and explaining it to buyer

7. Assisting buyer in obtaining financing and placing lender in contact with escrow officer

8. Assisting buyer in obtaining property inspection and reviewing with buyer afterwards

9. Assisting seller in ordering timely pest control report and reviewing required corrective work

10. Assisting buyer in obtaining fire insurance policy

11. Making sure documents/funds delivered to escrow

12. Providing any assistance parties request or require that is within the agent's abilities

1. Preparing escrow instructions

2. Ordering title search and conveying preliminary title report to buyer

3. Obtaining lenders' statements

4. Obtaining all necessary property reports

5. Obtaining new loan package

6. Receiving buyer's insurance policy commitment

7. Obtaining any other necessary information and statements, such as property tax records

8. Computing necessary prorations of items charged to buyer and seller

9. Requesting funding for deposit in escrow account

10. Auditing the file before closing

11. Closing the sale by presenting buyer and seller with settlement statements, disbursing funds and delivering necessary documents

1. A title insurance company is regulated by the state and requires payments to the Insurance Commissioner for a "guarantee fund" and a title insurance surplus fund. Title insurance fee schedules must be available to the public.

2. The standard policy of title insurance, such as the one published by the California Land Title Association, excludes:

3. The extended-coverage policy of title insurance, such as the one published by the American Land Title Association (ALTA), extends coverage to insure against:

4. The preliminary title report informs the buyer of:

5. Title insurance fee is paid for in one payment, by buyer or seller, as is customary in the local area or as the parties negotiate.

6. In California, title companies frequently serve as escrow agents.

1. Maximum annual real property tax can be no more than 1% of base year value (allowing for inflation of no more than 2% per year) plus an additional amount to pay for indebtedness approved by voters prior to passage of Prop 13.

2. Base value of property is its full cash value (market value) as of February 28, 1975, or the date of a subsequent reassessment event (sale, other change of ownership, new construction or improvement to an existing structure).

3. Assessed value is base value plus the inflation factor of no more than 2% per year.

4. Special rules apply in certain cases, which are not considered reassessment events. They are:

1. County assessor is an elected official who determines assessed values and prepares the tax role.

2. Whenever an interest in real property is acquired, a change in ownership statement must be filed with the county recorder or assessor within 45 days of the date the transfer is recorded. Penalty for incomplete filing, or failure to file, is $100 of 10% of tax owed based on new assessed value, whichever is greater.

3. Property owner can appeal assessor's opinion of value by contacting local assessor's office or appeals board office and presenting appraisal data refuting assessor's estimate of value.

1. County assessor must allow inspection and copying of documents related to assessed property.

2. Information available from State Board of Equalization at (916) 324-2798 or www.boe.ca.gov

1. Homeowner's exemption

2. Veteran's exemption

1. The property tax year runs from July 1 through June 30.

2. Property tax is payable in two installments.

1. The tax lien is placed on all assessed real property in the amount of the tax due.

2. Personal property taxes may be liens on real property if listed with or cross referenced to real property on the secured assessment roll; real property owned elsewhere may also secure a personal property tax lien.

3. Tax lien takes priority over other liens, with the exception of:

1. All unpaid taxes, costs, interest and redemption penalties must be paid, although the taxpayer may pay past due amounts in five annual installments, if currently due taxes are paid on time.

2. When past due amounts fully paid, county tax collector issues certificate of redemption to taxpayer.

3. On June 8 of tax year, delinquent tax roll is published.

4. If all amounts are not paid by June 30, the property is "sold" to the state in the "book sale."

5. If former owner pays all past due amounts, tax collector issues a certificate of redemption as well as a release of equity, which is recorded with county recorder.

6. Property not redeemed within three years (five years if disaster damage) is deeded to the state and tax collector has two years in which to sell the property. Former owner has right to redeem the property as long as the state holds title.

1. Property can be sold directly to a taxing agency, revenue district or one of specified nonprofit organizations. A nonprofit organization buying residential property must rehabilitate it for sale to low-income persons; if property is vacant, it can be dedicated to public use or used to build low-income housing.

2. Property also can be sold to the highest bidder at public auction.

1. Property Tax Postponement Law allows low-income persons who are blind, disabled or aged 62 or older to postpone payment of taxes on a personal residence.

2. Homeowner Assistance Program is a rebate of property tax paid. Program is available to low-income individuals who are blind, disabled or age 62 or older.

1. Special assessment is an ad valorem tax that is a lien on the property taxed until paid.

2. Special assessment requires approval of two-thirds of voters.

1. Involves only properties in the improvement area that are directly benefitted by an improvement, such as utility installation.

2. Not deductible for federal and state income tax purposes.

1. If a county adopts a transfer tax, a city in the county may adopt one and receive one-half of the amount collected by the county.

2. The basic tax rate is 55 cents per $500 or fraction of $500 of consideration, based on $100 minimum consideration for the property transfer. Note: Some jurisdictions charge a much higher documentary transfer tax.

1. Vehicle license fee status requires registration with the Department of Housing and Community Development (HCD).

2. Mobile home qualifies as real property if:

3. There are conditions for removal from foundation.

1. California inheritance tax and gift tax were repealed by voters through Proposition 6 on June 8, 1982, and no longer apply to estates or gifts after that date.

2. Proposition 6 also created the California estate tax, which is the maximum amount allowed as a credit for state estate taxes on the federal estate tax return.

1. Donor must file gift tax return by April 15 of year following the gift.

1. No gift tax return is required for a gift to one donee, in one year, of a present interest valued at $10,000 or less.

2. Tuition payments to an educational organization and payments to a medical care provider are not considered gifts.

3. Transfers between spouses are not taxed.

1. Unpaid federal taxes become a lien on all property and rights to property belonging to the taxpayer during the lien period, even if the property is acquired after the lien arises.

2. Notice of the lien against real property must be recorded to be effective against purchasers, mortgagees of any type, mechanic's lienors and judgment lien creditors.

3. An estate tax lien is unrecorded, but attaches to all of the deceased's property at the moment of death and is valid against later purchasers.

4. A gift tax lien is unrecorded, but is imposed on all gifts made during the year; that is, if the gift tax is not paid by the donor, it becomes a personal liability of the donee.

1. Adjusted gross income is the taxpayer's total income and not all income is taxable.

2. Taxable income is adjusted gross income less allowable deductions.

3. The taxpayer's tax bracket is the tax rate applicable to the taxpayer's taxable income.

4. Ordinary income, which is part of gross income, includes wages, business income, profits, interest, dividends, rents and royalties.

5. A capital asset is all property except business inventory or other property held for sale in the ordinary course of business.

6. The basis of property is the cost to acquire it. Basis may be increased by the addition of improvements to the property, but must be decreased if the property is depreciated.

7. A capital gain is the difference between the sale price of a capital asset and its basis, with certain allowances.

8. Depreciation is a deduction from income for the loss in value through wear and tear of property used in a trade or business or held for the production of income. A personal residence cannot be depreciated.

1. Exclusion from taxation

2. Certain ownership expenses qualify as deductions from taxable income.

1. Deduction from property income of mortgage interest and property taxes

2. Deduction for depreciation on property improvements

1. Giving constructive notice of the lease's existence by recording

2. Determining the priority of lien claimants

3. Determining the legal rights and remedies of the parties if the lease is used as security for a mortgage or deed of trust

4. Applying the antideficiency law

1. The estate for years is in effect for a stated period of time.

2. The estate from period to period, also called a periodic tenancy, is automatically renewed for the same period (usually one month) on payment and acceptance of rent.

3. The estate at will technically can be terminated at any time by either party, but still must comply with current statutory notice and other requirements.

4. The estate at sufferance is the holding-over of a tenant past the agreed-on lease term. Notice of termination can be given by the landlord at any time, making this the least valuable type of tenancy.

1. Parties (landlord and tenant) should be named.

2. The leased property should be described and its use specified.

3. Starting date and length of lease term should be given. If no term is given, the period for which rent is paid will be considered the lease term.

4. Amount of rent and when due are specified.

5. Any security deposit to be held by the landlord during the lease term is stated. All or part of the security may be kept to cover costs of

tenant's default in rent payments or reasonable repair or cleaning costs required after tenant vacates.

6. Tenant's right of possession is assured by land-lord's implied covenant of quiet enjoyment, meaning that the landlord cannot interfere with the tenant's lawful use of the property.

7. Landlord will be allowed a right of entry (which may require notice to the tenant):

8. Limitations on tenant improvements should be stated. Usually, landlord's prior approval is required.

9. Lease may be transferable by the tenant.

10. Terms for lease renewal may specified, although automatic renewal is possible only with compliance as to statutory requirements.

1. The Civil Code defines an untenantable dwelling.

2. The landlord will be obliged by an express or implied covenant to repair to make necessary repairs to the premises.

3. If residential premises are not adequately maintained, and landlord ignores tenant's complaints:

4. If a commercial property landlord fails to maintain the premises, the tenant:

1. Lease could give tenant a duty to repair.

2. Breach of lease terms may give landlord grounds for terminating the lease and evicting the tenant.

1. The landlord of residential property, if negligent, may be liable for injuries to tenants

resulting from the defective condition of the

premises, even when the defect is latent.

2. Tenant has obligation to notify landlord of property defects.

3. Landlord is not liable to a trespasser if the landlord did not know and could not be expected to know of an unsafe condition.

4. Tenant is liable for injuries that result from the tenant's lack of ordinary care in maintaining the premises.

1. Unruh Civil Rights Act, Civil Code Section 51, forbids discrimination in accommodations and business establishments on the basis of sex, race, color, religion, ancestry or national origin.

2. California's Fair Employment and Housing act (FEHA), Government Code Sections 12900-12996, prohibits housing discrimination based on race color, religion, sex, national origin or ancestry, and marital status. The law is enforced by the Department of Fair Employment and Housing.

3. Federal law, since 1968, has prohibited public and private discrimination in the sale, rental or lease of housing on the basis of race, religion or national origin or ancestry. The Fair Housing Amendments Act of 1988 added handicap and familial status (age) to the protected classifications.

1. Expiration of the lease term will terminate the lease. Notice requirements depend on the type of lease.

2. Surrender of the leasehold estate may occur by agreement of the parties, or by one of them acting as if the lease no longer exists.

3. Grounds for termination may exist.

4. Abandonment is the tenant's voluntary relinquishment of the premises without the landlord's express or implied consent and with no intention to perform future lease obligations. Notice of belief that premises have been abandoned should be given by landlord.

1. If tenant has breached a lease term or failed to pay rent, landlord gives three-day notice to pay or quit. To terminate lease, landlord gives notice to terminate, usually on 30 days' notice.

2. If tenant fails to comply with notice, landlord can:

3. Tenant can defeat an unlawful detainer action if proper notice was not given, landlord's action is retaliatory or without good cause, or some other legal barrier to eviction exists.

4. Tenant who willfully and maliciously remains in possession has a holdover tenancy and will be liable to the landlord for three times the amount of rent and damages due as punitive damages.

5. Landlord who succeeds with unlawful detainer can be awarded rent arrearages, damages and possession. Writ of possession issued by the clerk of the court directs sheriff or marshal to remove the tenant from the premises.

6. Tenant may receive a five-day stay of execution of a judgment in favor of landlord to pay back rent and regain possession if:

7. Trial court can stay execution of the judgment on its own authority.

8. Inventory must be made of any of tenant's possessions that are removed from the premises.

1. The MRL applies to agreements between mobile-home park management and:

2. The prescribed lease form includes fees, which are limited to rent, utilities and incidental reasonable service charges.

3. Grounds for termination of a lease are specified in the MRL.

4. Notice requirements are also specified.

1. In a gross lease, the tenant pays a fixed amount for rent.

2. An escalator clause provides for an increase in rent payments based on an increase in an index such as the consumer price index (CPI).

3. In a percentage lease, rent is a percentage of the tenant's gross income, usually over a stated minimum base amount. The percentage may increase as income increases.

4. In a net lease, also called a triple net lease or 3N lease, the landlord is guaranteed a stated (net) income because the tenant pays that amount as well as some or all of the operating and other property expenses.

1. A trainee licensee must complete 90 classroom hours of instruction but need have no prior experience in appraising.

2. A residential licensed appraiser must complete 90 hours of classroom instruction and 2,000 hours of acceptable appraisal experience, and can perform appraisals of:

3. A certified residential appraiser must complete 120 classroom hours of instruction and 2,500 hours of acceptable appraisal experience, and can perform appraisals of:

4. A certified general appraiser must complete 180 hours of classroom instruction and 3,000 hours of acceptable appraisal experience, and can perform appraisals of all real estate without regard to transaction value or complexity.

1. It is the process by which the appraiser derives an estimate of value as well as

2. The written report in which the appraiser explains how the estimate was made.

1. Neither buyer nor seller is acting under duress

2. The real estate has been on the market a reasonable length of time for property of its type

3. Both buyer and seller have full knowledge of the property's assets and defects

4. No unusual circumstances exist, such as a sale involving related parties and

5. The price represents the normal consideration for the property sold, unaffected by creative financ-

ing or sales concessions granted by anyone associated with the sale

1. Demand

2. Utility

3. Scarcity and

4. Transferability

1. A property's highest and best use is its most profitable physically possible and legally permissible use.

2. a balance of land uses usually produces the highest values overall.

3. The principle of supply and demand is simply another way of saying that when the supply of a product is high relative to demand, prices will fall, and when the demand is high relative to supply, prices will rise.

4. When buildings exhibit a certain degree of conformity, they tend to have greater value.

5. According to the principle of progression, a building that is less desirable than others around it will benefit by their proximity, while regression implies that a building that is more desirable than others around it will have its value lowered as a result.

6. The value of a particular property improvement is only its contribution to the property's overall market value. For example, even though it may cost $15,000 to build an inground swimming pool, the pool may contribute less than that amount to the total property value.

7. Competition, by increasing the number of products and services available, may bring in more customers and increase overall demand even though some suppliers may attract fewer customers.

8. Real estate is subject to change from physical, economic, social and political forces.

9. The life cycle of a building or neighborhood typically includes growth, equilibrium and decline and may include revitalization.

10. The anticipation that real estate will increase in value over time is a factor that influences most real estate purchases.

11. The principle of substitution is that value tends to be decided by the cost of acquiring an equally desirable property.

1. State the problem

2. List the data needed and the sources

3. Gather, record and verify the necessary data

4. Determine the property's highest and best use

5. Estimate land value

6. Estimate value by each of the three approaches

7. Reconcile estimated values for the final value estimate

8. Report the final value estimate

1. The appraiser adds to the price of a comparable the value of a feature found in the subject but not the comp.

2. The appraiser subtracts from the price of a comparable the value of a feature found in the comp but not the subject.

1. Reproduction cost is the cost of a new structure of the same design and materials as the subject.

2. Replacement cost is the cost of a new structure using modern methods, design and materials and having the same use as the structure, but without identical specifications.

3. Site value may be determined by the sales comparison approach or another method.

4. Cost manuals provide regional construction costs.

5. Cost approach assumes that the value in use of the subject property is one that will be as desirable to most buyers as to the property's present owner.

1. Square-foot method

2. Unit-in-place method

3. Quantity survey method

4. Index method

1. Physical deterioration results from ordinary wear and tear as well as catastrophic destruction.

2. Functional obsolescence results when a building's design, layout or utility is no longer desirable.

3. External obsolescence, also called environmental obsolescence or economic obsolescence is a loss in value from factors outside the subject property. These can be physical, political or economic.

1. In the straight-line method, the property's cost is divided by its years of useful life.

2. In the observed condition method, or breakdown method, each building component is analyzed separately and its loss in value estimated.

1. Appraiser begins by estimating the property's potential gross income.

2. Appraiser subtracts probable vacancy and collection losses to derive effective gross income.

3. Yearly operating expenses subtracted from effective gross income to find net operating income.

4. Capitalization rate is developed based on net income and sales prices of comparable properties.

1. Formula for finding GIM of a comparable property is sales price divided by gross income equals GIM.

2. By studying the GIMs for a range of properties, the appraiser determines which is the most applicable to the subject, then determines the subject property's actual or projected rental income.

3. Appraiser applies formula: gross income multiplied by gross income multiplier equals market value.

1. The Housing Law, administered by the Codes and Standards Division of the Department of Housing and Community Development, sets minimum construction and occupancy requirements for dwellings, including apartment houses and hotels.

2. The Contractors' License Law is administered by the Contractors' State License Board, which is responsible for licensing all building contractors working in the state. Anyone who violates the law is subject to criminal prosecution.

1. Plywood panels over wood girders and joists on concrete foundation walls, with crawl space underneath

2. Anchor bolts that attach the sill to the foundation wall are required in California.

3. Protection from insect (termite) infestation dictates that no wood member be in direct contact with earth.

1. Platform frame construction, one story at a time.

2. Post and beam frame construction requires fewer wall supports and thus allows larger rooms.

1. Rafters that meet at the ridge board, the highest point of the building

2. Sheathing over the rafters

3. Waterproof building paper over the sheathing

4. Sheet metal flashing around openings for chimneys and vents

5. Exterior covering material of wood or mineral-based shingles or shakes, tile or slate

Note: Use of wood for roofing is now prohibited in some areas for fire-safety reasons.

6. Eaves that extend beyond exterior wall of house; may be enclosed by a soffit and have a gutter to direct rain run-off through a downspout

1. The energy-efficiency ratio (EER) of an air-conditioning unit is found by dividing its capacity in BTUs by the number of watts of electricity needed to run it.

2. Solar heating can be passive (receiving/holding the sun's warmth) or active (using a pump or motor to circulate water or air warmed by the sun).

1. The government's police power to enact laws that benefit the public health, safety and general welfare enables it to place controls on land use. Generally, no compensation is given to the landowner whose land use is restricted.

2. The government's power of eminent domain allows it to take some or all of the rights of ownership of private property for a public use through the process called condemnation. When property is taken, the landowner receives the property's fair market value in compensation.

1. State law requires every California city and county to have a comprehensive, long-term General Plan, also called the master plan. The General Plan contains provisions for:

2. Counties must have a solid waste management plan that is consistent with the county's general plan.

3. Every county with a public airport served by a certified air carrier must have an airport land-use plan prepared by the local airport land-use commission.

4. Government Code outlines the procedure for adoption or amendment of general plan.

5. A specific plan may be created after the general plan, to give further details of locations of streets and utilities, projected population density, building construction requirements, topographical information and so on.

1. Zoning ordinances typically cover:

2. Zoning laws also typically allow a conditional use permit to authorize a nonconforming use, such as a church in a residential zone.

3. Rezoning is the changing of existing zoning classifications.

4. State law allows a zoning variance to be given to a landowner, permitting a change in one of the specifications of the zoning ordinance, such as a setback requirement.

5. The planned development or planned unit development (PUD) is both a zoning classification and a type of development that includes individually owned property as well as shared common areas.

1. The Community Redevelopment Law, in the Health and Safety Code, authorizes formation of a Community Redevelopment Agency (CRA) to rehabilitate existing structures or bring in new development to provide low and moderate-income housing and employ low-income persons.

1. The forms of subdivision ownership are specified.

2. The law is administered by the Real Estate Commissioner.

3. Details of the subdivision and its financial status are submitted to the Commissioner, who prepares and issues a subdivision public report.

1. The standard subdivision provides ownership of separate parcels with no shared interests.

2. In the common interest subdivision, separately owned parcels are accompanied by shared interests in one or more common areas, typically controlled by a homeowners' association. Common interest subdivisions include:

3. In an undivided interest subdivision, each owner is a tenant in common with all other owners and each has the nonexclusive right to use of the entire property. An example is a campground.

4. A land project is a subdivision of 50 or more unimproved parcels with fewer than 1,500 registered voters within the subdivision or within two miles of its boundaries.

1. Notice of intention, a questionnaire and an application must be filed by the developer. Commissioner must be notified of any material change in subdivision specifications after filing.

2. Requirements are stricter for common interest subdivisions than for standard subdivisions.

3. Subdivider may begin selling on basis of approved preliminary public report; however, no sales can be closed or transactions completed until the final public report is issued.

4. Receipt for public report must be signed by every person reserving property on the basis of the preliminary report or making an offer to purchase after seeing the final public report. The receipt must be kept by the subdivider for three years from the date it is signed.

5. The final public report can be renewed after five years for an additional five years.

6. Maximum filing fees are set by the Subdivided Lands Law, but the Commissioner can charge less, if warranted by administrative costs.

1. To coordinate subdivision design, including streets and utilities, with the general plan and

2. To ensure that areas of a subdivision dedicated to public use, such as public streets, are properly improved initially

1. The first document prepared is the tentative map, which does not require a final property survey. It specifies:

2. The final map must meet requirements.

3. The parcel map is prepared next.

1. There are notice, hearing, time limitation and other requirements.

2. Final map must be filed before tentative map expires, 24 months after its approval or conditional approval.

1. Environmental impact report (EIR), authorized by California Environmental Quality Act of 1970 (CEQA), may be required before subdivision approval.

2. Alquist-Priolo Earthquake Fault Zoning Act regulates development in earthquake fault areas.

3. Seismic Hazards Mapping Act requires seller (or agent, if there is one) to disclose property location in seismic hazards zone.

4. The California Coastal Zone Conservation Act authorizes regulation of development in coastal zones.

1. Federal law is found in the following major laws.

2. State laws prohibiting discrimination include the following.

1. Redlining is prohibited by the California Housing Financial Discrimination Act.

1. Principal x rate x time = interest

2. Interest ) (rate x time) = part

3. Interest ) (part x time) = rate

4. Interest ) (part x rate) = time

5. Amortization tables

1. Assume that expenses up to the day of closing are the responsibility of the seller.

2. Assume that expenses as of the day of closing are the responsibility of the buyer.

3. Use the standard term of 360 days per year (30 days per month).

1. Compute area, then

2. Multiply number of square feet in area by price per square foot