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California Real Estate Chapter 5

Terms in this set (106)

"The basis for land use control laws"

"This is the power vested in a state government to adopt and enforce laws and regulations necessary for the protection of the public's health, safety, morals, and general welfare—is the basis for land use control laws

A state may delegate its police power to local governmental bodies.

It is the police power that allows state and local governments to regulate the use of private property.

The U.S. Constitution does not give the federal government a general power to regulate for the public health, safety, morals, and welfare.

But the federal government does have authority to use its other powers to advance police power objectives."

"An exercise of the police power must meet constitutional limitations.

As a general rule, a land use law or regulation will be considered constitutional if it meets these four criteria:

1. It is reasonably related to the protection of the public health, safety, morals, or general welfare.
2. It applies in the same manner to all property owners who are similarly situated (in other words, it is not discriminatory).
3.It does not reduce a property's value so much that the regulation amounts to a confiscation—an uncompensated taking of property.
4. It benefits the public by preventing harm that would be caused by the prohibited use of the property."

"Government land use controls take a variety of forms:

-comprehensive plans,
-zoning ordinances,
-building codes,
-subdivision regulations,
-environmental laws

All of these are intended to protect the public from problems that unrestricted use of private property can cause.

If two different government entities have passed conflicting laws based on the police power, the one with the stricter standards of health and safety will apply.
"Is issued only if the subdivision meets the requirements set forth in the Subdivided Lands Law.

A report will be denied:

1. if there is any evidence that the subdivision is unsuitable for the use proposed by the subdivider,

2. if there is no assurance that purchasers will get what they've paid for."

"To obtain a final public report for a residential subdivision, the subdivider must be able to show that streets and other improvements will be completed and that there will be adequate drinking water and other utilities.

The subdivider also must be able to demonstrate that any deposit money will be made secure, that there are satisfactory arrangements to clear any mechanic's liens or blanket mortgage liens (for instance, with the use of impound or escrow accounts), and that when the transaction is completed, title will be conveyed to the purchaser."

"A public report includes the following information:

-the subdivider's name and the project's name, location, and size;
-the legal interest to be acquired by the purchaser;
-the procedure for handling
-the purchase money;
-the amount of any taxes and assessments;
-any private restrictions;
-any unusual costs the purchaser will have to bear;
-any hazards or adverse environmental factors; and
-any unusual or potentially harmful financial or conveyancing arrangements

"Must be given to anyone who requests it, and all prospective purchasers must receive a copy of the report before entering into a sales agreement.

They must also sign a receipt proving that they received a copy of the report.

That receipt must be kept by the subdivider for at least three years.

A final public report is valid for five years, unless a material change occurs in the subdivision.

Material changes include physical changes to the subdivision itself (such as new street or lot lines), changes in the documents used to transfer or finance lots, the sale of five or more lots to one party, or new conditions that affect the value or use of lots."

"Often, the Commissioner issues a preliminary report before issuing the final report"

"If the Commissioner discovers that a subdivider is violating any provisions of the Subdivided Lands Law, the Commissioner can stop the violations or sales of the lots with a desist and refrain order"
(Property taxes)

General real estate taxes are a tax on the ownership of real property.

They are often simply called property taxes, and they are also called ad valorem taxes, which means they are based on the property's assessed value.

The more valuable the property, the higher the taxes.

In California, a property's assessed value cannot increase more than two percent per year.

"Taxes are levied to support the general operation and services of government.

"Taxes levied against real property annually to pay for general government services.

When general real estate taxes are levied against a piece of property, the amount owed is determined according to the value of the property.

The more valuable the property, the higher the taxes.

They are based on the value of the property taxed (ad valorem)"

Public schools and police and fire protection are examples of government services paid for with general real estate tax revenues.

These taxes are levied by a number of governmental agencies, such as cities, counties, school districts, and water districts.

Thus, a single property can be situated in five or six taxing districts"

"If a property is transferred in the middle of a tax year, the new owner must pay a supplemental assessment for the remainder of the tax year.

The supplemental assessment takes into account the difference between the previous assessed value and the new assessed value.

A seller (or a seller's agent) is required to give a prospective buyer a notice explaining that the buyer may receive one or two supplemental tax bills, and that the buyer will be responsible for paying the additional taxes; the buyer's lender won't pay them out of the impound account maintained in connection with the buyer's loan"
"General real estate taxes are levied annually, on or before September 1 for each tax year"

"The state fiscal tax year runs from July 1 through June 30 of the next calendar year.

The tax lien attaches to the property on the previous January 1.

So the lien for the July 2010-June 2011 tax year attached on January 1, 2010.

Since the taxes aren't levied until September, the specific amount of the tax lien isn't known when the lien attaches.

A tax bill is mailed to each property owner on or before November 1 of each year.

The tax bill reflects the property's assessed value, less any exemptions to which the property owner is entitled.

The assessed value is multiplied by the tax rate (no more than 1%), and the result is the amount of tax the property owner must pay.

An owner may pay his taxes in two installments, or may pay the total amount when the first installment is due.

The first installment is due on November 1, covers the period from July through December, and is delinquent if not paid by 5:00 pm on December 10.

The second installment is due February 1, covers the period from January through June, and is delinquent if not paid by 5:00 pm on April 10. A 10% penalty is added to any delinquent payment"

"If the property taxes are not paid, the tax collector can foreclose on the tax lien.

First a notice of impending default is published, and the property owner is informed that he must pay the taxes by June 30.

If the taxes remain delinquent after June 30, the property is considered "in default" and a five-year redemption period begins to run.

(The redemption period is three years for commercial properties.)

During this five-year period, the owner can keep possession of the property and has the opportunity to redeem it by paying the back taxes, interest, costs, and other penalties.

If the property has not been redeemed by the end of the five-year period, the tax collector can sell the property at a tax sale and apply the proceeds to the tax debt.

Any surplus from the sale is paid to the former owner or other parties who had an interest in the property"

A sale of real property is not subject to sales tax.

However, if a sale of real property includes the transfer of tangible personal property, sales tax must be paid on the sale of the personal property.

Sales tax is most often a factor in the sale of a business opportunity, where inventory and trade fixtures may be sold along with the real property.

The sale of intangible personal property, such as business goodwill, is never taxed.