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Len Watkins
Joshua Genser
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Offices
in Point Richmond and Emeryville
125 Park Place, Suite 210
Point Richmond, CA 94801
Phone: 510-237-6916
Fax: 510-236-9851
2200 Powell Street, Suite 890
The Watergate Office Towers
Emeryville, CA 94608
Phone: 510-237-6916
Fax: 510-236-9851
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Real
Estate
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When
you buy a piece of land, you are buying "Real Estate," also called "Real Property." The land often already has on it buildings, utilities, sidewalks and other things,
all of which are "Improvements."
You’re shopping for real estate, or you’re selling real estate, and
you’ve developed a relationship with a Real Estate Agent. Although
you have "your" Agent
and the seller or buyer you’re talking to has "their" Agent, that doesn’t necessarily mean that your agent is looking out exclusively
for your interests, nor that the other Agent is working exclusively
for the other party. Rather, Real Estate Agents often have duties
to both parties. Your contract for the purchase of the property probably
contains a disclosure of for whom each agent was working. If you
feel you need an advocate working exclusively in your interest in
the course of a real estate transaction, you should discuss this
explicitly with your Real Estate Agent before you begin shopping,
or you should involve an attorney.
Your ownership of the real property is reflected in your "Title" to
that property. There are a number of different kinds of title:
"Fee" is what most people think of as ownership. If
you own a house, even if you still owe the bank some money from when you bought
it, you have a fee interest in the house. The holder of the Fee has the right
to occupy the land and the right to exclude others from it.
"Joint Tenancy" means that two or more people
share the Fee title, and that when one of the owners dies, his or her share goes
automatically to the other owners.
"Co-Tenancy" also means that one or more people
share the Fee title, but when one of the owners dies, his or her share of the
title goes to his or her heirs.
You probably borrowed some money to buy the property, either from
a bank or from the seller or both. The lender, in order to protect
itself against the possibility that you don’t make payments on the
loan, took a "Security
Interest" in the property. That is, the lender has a piece of title to the property, but
only as security for its loan. The document that gives that Security
Interest is called a "Deed of Trust," and the bank is the "Beneficiary" of that Deed of Trust. If you don’t pay your loan, the bank can foreclose and
take the property away from you, but otherwise, the deed of trust
confers no rights of ownership upon the bank.
The seller of the property gave you title by giving you a "Deed." A "Grant
Deed," which is probably what you received, contains a warranty that the seller was
able to give you the title it says you received on the face of the
Deed. A "Quitclaim Deed," in contrast, only gives whatever title the seller has to give, but contains
no promise that the seller actually had any title to give.
Deeds and Deeds of Trust are copied and kept in the files of the
County Recorder. Any document recorded gives any potential buyer
of the property notice of how it affects title. Thus, if a bank records
its Deed of Trust, then no one buying your property from you can
claim that they didn’t know that the bank had a Security Interest
in the property.
Very few people ever bother to look at the files in the Recorder’s
office, so most people buy a policy of Title Insurance. The Title
Insurance Company looked at the recorder’s files, and issued a Preliminary
Title Report in which it set forth what your title will be after
you complete the purchase. Your Title Insurance Policy then guarantees
that, if the Preliminary Title Report was wrong, the Title Insurance
Company will make it right.
Among the items that will be shown by a Preliminary Title Report
are "Encumbrances" and "Liens." An
Encumbrance or a Lien is anything that keeps your ownership in the
property from being complete. For example, a Deed of Trust is a lien
or an encumbrance that means that the bank has a right to take the
property from you if you don’t pay your loan. Other encumbrances
include tax liens, judgment liens, and easements.
"Tax Liens" are liens on your property placed
there to assure that you pay your County property taxes.
"Judgment Liens" are placed on your property
by people who have judgments against you. Generally, you won’t be able to sell
your property without paying off the judgment.
"Easements" are rights granted to other people
to use portions of your property. Most urban real property is encumbered by utility
easements that permit public utilities to install and maintain pipes and wires
across your property.
When you pay off your loan, the bank surrenders its deed of trust
by recording a "Reconveyance." However,
if you miss payments on your loan, the bank will begin to "Foreclose." The Foreclosure process is started by sending you a "Notice of Default," in which the bank must accurately set forth how much money you owe and how to
pay it to stop the foreclosure, to "cure" the "default." About three months later, if you have not cured the default, the bank will send
a Notice of Trustee’s Sale, setting the date upon which your property
will be sold. You have up until five business days before the Trustee’s
Sale to cure the default and "reinstate" the loan. If the Trustee’s Sale goes forward, the property will be sold at auction
to the highest bidder.
Your new house might be part of a "Development" or
a "Subdivision." That means that your house is on what was once a larger parcel of land that
has been broken up into a number of smaller parcels, called "lots." A "Developer" bought the land, subdivided it, built the homes, and sold them.
You may be a member of a Homeowners Association, especially if you
bought a house in a subdivision. If the developer had extra land
that wasn’t made into lots for houses, or if the developer built
amenities, such as a swimming pool and tennis courts, then that extra
land and those amenities are owned collectively by all of the homeowners
in the subdivision. The land and amenities are called "Common
Area." The Homeowners Association represents the homeowners collectively, and manages
the common areas. The Homeowners Association also has the right to
assess monthly dues from its members to pay for the maintenance of
the common areas. The rules governing the Homeowners Association
are set forth in a document called the "Covenants, Conditions and Restrictions," or "CC&Rs."
You may be a member of a Homeowners Association, especially if you
bought a house in a subdivision. If the developer had extra land
that wasn’t made into lots for houses, or if the developer built
amenities, such as a swimming pool and tennis courts, then that extra
land and those amenities are owned collectively by all of the homeowners
in the subdivision. The land and amenities are called "Common
Area." The Homeowners Association represents the homeowners collectively, and manages
the common areas. The Homeowners Association also has the right to
assess monthly dues from its members to pay for the maintenance of
the common areas. The rules governing the Homeowners Association
are set forth in a document called the "Covenants, Conditions and Restrictions," or "CC&Rs."
The property you purchased, whether for residential or business use,
is "Zoned" for
certain uses. That is, the City or County in which the property is
located has a law that limits the uses to which property can be put.
There are zones where only single-family homes are permitted, and
zones where only heavy industry is permitted. If you want to use
your property for a certain purpose, you should check the zoning
before you buy. Although you can, sometimes, obtain "variances," or permission to use the property for normally forbidden purposes, you should
never count on it.
Problems?
You want to understand the risks of investing in real property or
in deeds of trust. The property you bought doesn’t match what you
were told you were getting. There is some defect in the construction
of improvements on the property. Your neighbor won’t let you use
some land you thought was yours, or your neighbor wants to use part
of your land he thought was his. The bank is foreclosing improperly.
The Homeowners Association isn’t maintaining the common areas. You
want to subdivide a piece of land. You need a variance. You want
to lease your land.
Consult with an attorney.
Genser & Watkins LLP has been representing
owners, lessees, sellers and buyers of real property since 1983.
Call 237-6916 for an appointment. |
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