Real Estate Principles in California

CHAPTER ONE

INTRODUCTION TO THE STUDY OF REAL ESTATE

NOTE: The bold face text in this chapter is the text of greatest importance.

1.1 TERMS USED IN THIS CHAPTER

Most italicized words are explained in the Chapter Glossary on page 15

Allodial System

Assessor

Base Line

Correction Lines

Feudal System

Lot, Block and Tract System

Meridians

Metes and Bounds

Range

Range Lines

Section

Township

1.2 INTRODUCTION

In order to understand the development of property rights and the rules and principles of California real estate, we must have an understanding of California history. The history of real estate in California traces its roots through four cultures:

A. American Indian

B. Spanish

C. Mexican

D. American

Certain laws relating to rights in property were inherited from Spain and Mexico, but others originated in medieval England. Legal land descriptions have also evolved through the years. This chapter will cover the historical background of land titles in California and examine the methods of measuring and describing real property.

1.3 BACKGROUND OF REAL ESTATE OWNERSHIP IN CALIFORNIA

The earliest inhabitants of California were the American Indians. Prior to European colonization land was held by the native Americans who lived here.

1.3.1 THE SPANISH PERIOD: 1513 - 1822

The Spanish period began with Balboa’s discovery of the Pacific Ocean (1513) and lasted until Mexico’s independence from Spain (1822). In 1513 the Spanish explorer Vasco Nunez de Balboa sighted the Pacific Ocean and claimed its waters and shores, including the land we now call California, for the King of Spain. From 1513 until 1822 all the land in California was held in the name of the King of Spain, and technically belonged to him. Ownership and transfer of property rights were governed by Spanish law which was an outgrowth of Roman Civil Law, as distinguished from the Common Law followed in England and its American colonies.

Briefly, under the Civil Law, judges were guided by elaborate codes imposed by the sovereign, usually the King or Queen or their representative. Under Common Law judges gave weight to both the unwritten law of custom and usage of the people as well as the written law of the sovereign and legislature. Specifically, under the Civil Law of Spanish Rule in California, the use of land could be acquired only by political or military agencies of the King. The grants were not outright transfers of title but instead were limited to specific usages such as agriculture or grazing.

1.3.2 THE MEXICAN PERIOD: 1822 - 1846

Mexican Rule of California began with the Mexican independence from Spain (1822) and ended with the military and political victory of Americans over Mexico in California (1846). Upon independence from Spain, the Mexican government encouraged the colonization of California and established governors who had absolute discretion in the selection of persons who could receive land. These grants were made through a system that included an application to the governor, and upon his approval, ratification by the Mexican legislature. These grants, known as "expedientes," were filed and recorded in government archives. The shapes and names of many California communities were determined long ago by these Mexican land grants. Many communities today in Central and Southern California trace their boundaries and histories back to these original Mexican land grants.

1.3.3 THE AMERICAN PERIOD: 1846 TO THE PRESENT

American Rule in California starts with the period of the victory of Americans over Mexico in California 1846 and includes the admission of California to the Union in 1850. Mexico’s inability to maintain its sovereignty in California and other areas of the current Southwestern United States, coupled with the impetus of American settlers into those territories, led to tension and finally to the Mexican-American War (1846-1848).

In those early days of American presence in California, the difficulty of making land surveys and the lack of an adequate land recording system resulted in land title problems to the extent that for a time accredited landowners were required to keep the evidence of their titles in their physical possession.

California’s transition from Mexican to American sovereignty became final with the Treaty of Guadalupe Hidalgo (1848) under which California became an American possession. The Treaty required that existing property rights under Mexican rule be respected. California was admitted to the Union in 1850. To resolve land title disputes growing out of this period, Congress established the Board of Land Commissioners (1851) to hear and determine all private land title claims, subject to final review by the courts. The adjudications of this Board uniformly has been held to be conclusive as to the validity of the grants of title and of the boundaries involved.

1.4 DEVELOPMENT OF OWNERSHIP RIGHTS

Two historical models of land holding developed in Europe and are of historical significance, the feudal system and the allodial system.

1.4.1 FEUDAL SYSTEM

The feudal land holding system influenced all of the early Common Law concerning real property, and despite the fact that the feudal system never existed in the United States, it has played a vital role in shaping modern land law. The feudal system was both a system of government and a means of holding property in medieval Europe, especially in England. Under this system, the King owned all the property and parcelled out holdings to royal vassals or lords for their use and occupancy in return for their pledge of loyalty and services. In return, the vassals also parcelled out this land to their subordinates under similar terms. This process ultimately resulted in a chain of relationships that stretched from the King down to the lowliest vassal. The king however never relinquished ownership of the land. The land held by the vassal under this system was called a fief or feud, the source for the word "feudal."

1.4.2 ALLODIAL TENURE SYSTEM

As the feudal system decayed, it was replaced by the allodial tenure system of landholding. The allodial system reflected the decline of the power of the Crown and the growth of the power of the individual. This system recognizes the right of the individual to own land freely and absolutely without obligation to any political superior. The unit of land under this system was called an allod or allodium. Under this system, every parcel of land has a title which legally confers ownership. Whoever holds title to the land owns the land itself and all the rights that attach to it. The allodial system is the system by which all real properly is held in the United States today.

1.5 ORIGINS OF COMMON LAW AND CIVIL LAW

There are basically two systems of law in the Western World. Common Law, which originated in medieval England and Civil Law which grew out of Roman law and from which Spanish and Mexican law developed. Common Law recognized local customs and popular beliefs and standards of conduct. Precedents developed over time as the courts were called upon to hear the various disputes and grievances that arose and a body of rules and precepts was established. This gradual development differed from Civil Law which attempted to cover every possible dispute that might arise. In the absence of some constitutional or statutory provisions specifically applicable, Common Law prevails in California.

1.6 EARLY METHODS OF MEASUREMENTS AND LAND SURVEY AND DESCRIPTION

Measuring land accurately has always posed difficulties with impreciseness leading to practical problems and disputes. With one early land measurement technique, the circumference of a wheel was measured and a leather strip tied to a spoke. As the wheel was rolled on the ground the revolutions of the wheel could be seen and the distance recorded. Another method utilized two men on horseback with a rawhide thong. One rider would remain stationary while the other rode past. This was repeated by the other rider as the length of the thong was reached. At the end of the property the number of thong lengths exchanged would be counted.

Of the land measurement methods in use today metes and bounds descriptions is one of the oldest. It is described in section 1.8.1 on page 8.

When California gained statehood in 1850 certain base lines and meridians were established in order to locate and describe lands under the U.S. Government section and township system.

1.6.1 MONUMENTS AND MARKINGS

An early form of land description was the method known as monuments and markings. Under this system, natural and man-made features were used as points of reference for property descriptions. Monuments and markers are visible objects set by the government or surveyors which are used to establish the lines and boundaries of a survey. The boundaries of a parcel might be described by reference to objects that stand at the corners or border the edge of the property, such as an oak tree, a creek, a fence or a winding road. This method was often used in frontier and rural areas. While the method was convenient, it failed to permanently describe the land because both natural and man-made references were subject to change: the tree might topple in a storm, the creek change course, the fence removed, or the road straightened.

EXAMPLE:

Beginning at the old walnut tree at the north end of the Double Bar Ranch, the property line proceeds to the wooden bridge across Bald Eagle creek, then to the broken wagon wheel forty paces southeast, then along the river trail until it comes to the large boulder on top of Lone Pine Ridge, and then returning down the hill back to the old walnut tree at the north end of the Double Bar Ranch.

1.6.2 INFORMAL REFERENCES

Informal reference has been the most common way of describing land. Street numbers and reference names are examples of this type of land description. The advantage of an informal reference is that it is easily understood. The location of the property can be determined quickly. The disadvantage is that it is not a precise method. Duplication, omissions, and other inconsistencies reduce the descriptive value of informal references. Informal reference does not describe the actual physical boundaries of the property.

EXAMPLE:

Street Number: 1600 Pennsylvania Ave., Washington, D.C.

Place Name: The White House, Washington, D.C.

1.7 ASSESSMENT AND RECORDING OF LAND AND IMPROVEMENTS

An assessor is the local government official who has the responsibility of determining the values of property for the assessment of real and personal property taxes. By law, the County Assessor may prepare and file in the Assessor's Office and record in the County Recorders Office a map that describes each parcel of real estate in the county by an alphanumeric code which is known as the assessor's parcel number. Although the assessor's parcel number has been used to describe a property for legal purposes, this method of land description is generally required in order to record the transfers of real estate with the county recorder or registrar of deeds. This is required in order for the assessor to maintain proper records for the payment of property taxes.

Every real estate instrument submitted for recording must have an adequate description of the property involved in the transaction. The identification of real property is called its legal description. What follows are the current methods of legally describing property in California.

1.8 PRESENT METHODS OF DESCRIBING REAL PROPERTY

While there are many ways that land may be described (including the informal description and assessor's parcel number) there are three major methods used today in California to adequately and legally describe and locate land. There are:

A. Metes and bounds, which describes the property by its perimeters (metes meaning measurements, and bounds meaning boundaries),

B . U. S. Government Survey, and

C. Lot, block and tract or tract references which refer to lots and blocks in a recorded subdivision map.

1.8.1 METES AND BOUNDS

A metes and bounds description starts at a fixed reference point called a point of beginning (also called a point of commencement). The parcel is described in terms of distance and direction. The distance is measured in feet and the direction is described in degrees, marked by the symbol o. The directional notation is given in conventional compass terms so that property boundaries are described as running so many degrees east or west of true north or south. North and south are 0o and 180o references (that is, they are vertical on a map) and east and west are 90o and 270o (that is, they are horizontal on a map). Since property boundaries are by definition encircled, a metes and bounds description must completely enclose the property it describes.

EXAMPLE:

A tract of land located in Red Bluff, California is described as follows:

Beginning at the intersection of the east line of High Road and the south line of Highway 29; then east along the south line of Highway 29 300 feet; then south 200 feet east 225 feet, more or less, to the center of Oak Valley Creek; then northwesterly along the center line of said creek to its intersection with the east line of High Road; then north 105 feet, more or less, along the east line of High Road to the place of the beginning.

Metes and bounds descriptions are usually used as a last resort because their length and awkwardness may make them unintelligible to anyone but a civil engineer, a title insurance abstractor, or a real estate attorney.

Figure 1-1. BASE LINES & MERIDIANS IN CALIFORNIA.