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California Real Estate Chapter 4

Terms in this set (113)

"Homestead property is exempt from judgment liens to the extent of the homestead exemption.

A homestead is an owner-occupied dwelling. The homestead exemption protects a limited amount of the property's value against foreclosure of judgment liens and attachment liens.

When a homestead is sold, the sale proceeds are protected (up to the exemption amount) for up to six months after the sale, giving the former owner a chance to reinvest those funds in another house.

Currently, the standard exemption is $75,000.

The exemption for a member of a family unit is $100,000.

The exemption is $175,000 if the debtor or the debtor's spouse is over 65 or unable to work because of a disability.

It's also $175,000 if the debtor or spouse is over 55 and has a low income.

A judgment creditor cannot foreclose on a homestead unless the net value of the property is greater than the amount of the exemption.

In other words, the property must be worth enough so that the sale proceeds would cover all of the liens against it, plus the homestead exemption amount.

When a judgment lien is foreclosed on and homestead property is sold, the sale proceeds are applied in the following manner:

1. to pay all liens and encumbrances not subject to the homestead exemption (a deed of trust, for example);

2. to the homestead claimant in the amount of the exemption ($75,000, $100,000, or $175,000);

3. to pay the costs of sale;
4. to the judgment creditor to satisfy the debt;

5. any surplus to the homestead claimant."

"Money that's paid to the former owner as a result of the homestead exemption is protected from judgment creditors after the foreclosure sale for up to six months, during which time the funds may be reinvested in another homestead property."

This means a judgment creditor can't foreclose on a homestead unless the property's net value is more than $75,000, $100,000, or $175,000, depending on the debtor's circumstances.

The net value is the market value minus the total amount of the senior liens—those that have higher priority than the lien being foreclosed on.

But a portion of the sale proceeds (the applicable statutory exemption amount) will continue to be protected against the claims of judgment creditors for six months. This six-month grace period applies whether the sale of the home is voluntary or forced.

If the homestead claimant buys a new home within the six-month period, the exemption remains in effect and attaches to the new home.

If a new home is not purchased in that time, the exemption terminates.
"An easement is created by express grant when a property owner grants someone else the right to use the property.

The owner deliberately makes her property into a servient tenement.

The grant must be put into writing, signed by the grantor, recorded, and must comply with all the other requirements for conveyance of an interest in land. This is a requirement of the law known as the statute of frauds."

A document creating an easement should always be recorded to provide public notice of the easement.

Otherwise the easement holder might not be able to enforce his easement rights against someone who bought the servient tenement unaware of the easement.

A document creating an easement usually must fulfill the same requirements as a valid deed.

However, the document does not have to specify the exact location of the easement.

A grant of an easement "across Lot A for purposes of ingress and egress" is valid.
"When granting an easement, the grantor doesn't have to specify the location of the easement"

"A person can grant an easement only in the interest that she holds."

"For instance, if a tenant grants an easement in the leased property, the easement will exist only for the term of the lease.

For instance, if Karen were leasing a property for ten years, any easement she granted would be good only for that ten-year term.

A person can't convey a greater interest in property than the interest she holds herself.

A fee simple owner may grant an easement that will last in perpetuity (indefinitely), or for the life of the grantor, or only for a specified term."
(deed restrictions or restrictive covenant)

Are restrictions on the use of a property that were usually imposed by a previous owner.

Like easements, private restrictions can "run with the land," binding all subsequent owners of the property"

"While restrictions are often imposed in a deed, they can also be created by written agreement between the current property owner and a neighbor or some other party.

This type of restriction can also run with the land and be binding on all future owners.

Most subdivision developers impose a list of restrictions on all lots within the subdivision, before they begin selling individual lots.

This is called a declaration of restrictions, or CC&Rs (covenants, conditions, and restrictions).

The CC&Rs typically include rules limiting all the lots to single-family residential use, requiring property maintenance, and preventing activities that would bother the neighbors.

The rules are intended to ensure that the subdivision will remain a desirable place to live.

The CC&Rs are recorded, and then referenced in the deeds used to convey the lots in the subdivision.

As long as a private restriction isn't unconstitutional, in violation of a law, or contrary to a judicial determination of public policy, it can be enforced in court.

(An example of an unenforceable restriction is one prohibiting the sale of property to nonwhite buyers)"

Another example of an illegal private restriction is one that prohibits property owners from putting up "For Sale" signs.

Courts have typically ruled that any restrictions on "For Sale" signs are void.