CALIFORNIA REAL
ESTATE PRINCIPLES Q &
A EXAM RATED A+
1. CALIFORNIA DIVERSITY
a. Capitalism: an economic system in which most of the economy’s resources are
privately owned and managed.
b. California is the 8th largest economy in the world, and generates 13% of the US
GDP.
c. Net worth: the value of all assets minus all liabilities.
d. Appreciation: increase in the market value of real estate
e. Inflation: increase in the price of goods/services or decrease in purchasing power
f. Affordability index: measures how many households can afford a median-priced
home.
g. Median home price: midway between most expensive and least expensive
h. C.A.R. (California Association or REALTORS):trade association dedicated to
the advancement of professionalism in real estate.
i. Realtor: someone who is a member of the association
ii. Real estate agent: someone who’s licensed by the D.R.E.
i. List 3 major careers in R.E.
i. Management
ii. Finance
iii. Construction
iv. Brokerage
j. Name 2 types of R.E. licenses
i. R.E. Sales person
ii. R.E. Broker
2. PROPERTY, ESTATES, AND OWNERSHIP: “Who owns this property, and What’s their
, CALIFORNIA REAL
ESTATE PRINCIPLES Q &
A EXAM RATED A+
interest in it?”-
a. Bundle of rights (U.P.T.E.E.):
i. Use: right to use, within law, in any way or purpose
ii. Possess: right to live on property and keep others out
iii. Transfer: right to sell, give, or dispose of property
iv. Encumber: right to borrow against, or use as collateral
v. Enjoy: right to peace and quiet enjoyment
b. Personal property vs. Real property
i. Personal aka chattel: moveable, and transferred/sold via Bill of Sale
ii. Real: immoveable, and is transferred/sold via Deed; anything permanently
attached to the land
1. Airspace, to a reasonable height
2. Surface rights
3. Mineral rights: gold, precious metals; unless they’re fugitive (non-
solid, i.e.: gas, oil)
4. Water rights: streams, underground water
a. Under the Correlative-rights Doctrine, the owner may
take only a reasonable share of the underground H2O
b. Riparian Rights: property bordering a river/stream
c. Littoral rights: property bordering a lake; owns up to the
low water mark/edge of the lake
d. For land bordering oceans, property owners own up to the
ordinary high tide mark
e. Appropriation: gov’t right to divert water for a beneficial use
iii. Improvements: anything resting on the land to become permanent, i.e. pools,
fences, garages, etc.
, CALIFORNIA REAL
ESTATE PRINCIPLES Q &
A EXAM RATED A+
iv. Fixtures: anything that’s permanently attached to real property.
1. 5 tests to determine a fixture (M.A.R.I.A.)
a. Method of Attachment – moveable or immoveable?
i. Fructus naturales: naturally occurring plant growth,
i.e. grass
ii. Emblements: commercial groves/crops for annual
harvest/sale
, CALIFORNIA REAL
ESTATE PRINCIPLES Q &
A EXAM RATED A+
i. Fructus indutriales: crops produced by human labor,
i.e. corn
b. Adaptation – item specially made for property?
c. Relationship of parties – tenant/landlord; lender/borrower
d. Intention – what was the intent, and was it informed/written
e. Agreement of the parties
2. Trade fixtures
a. Personal property used to conduct a business, i.e. shelves,
cabinets, refrigerators, etc.
b. Tenants can retain this property, even though landlord
owns it, but is responsible for repairing any damages
that result from replacing them.
3. Anything Appurtenant to the Land
a. Appurtenance: anything used with the land for its benefit
(belonging to), i.e. easements, stock rights to mutual water
companies
c. Types of
b. Easement: right of way across a parcel of land
Estates
i. Estate: ownership interest or claim on real property
1. Freehold Estate
a. Indefinite duration
b. Can be sold or inherited
c. Free from anyone else’s restrictions
d. Types
i. Estates in Fee, aka (Fee Simple Estate or Estate of
ESTATE PRINCIPLES Q &
A EXAM RATED A+
1. CALIFORNIA DIVERSITY
a. Capitalism: an economic system in which most of the economy’s resources are
privately owned and managed.
b. California is the 8th largest economy in the world, and generates 13% of the US
GDP.
c. Net worth: the value of all assets minus all liabilities.
d. Appreciation: increase in the market value of real estate
e. Inflation: increase in the price of goods/services or decrease in purchasing power
f. Affordability index: measures how many households can afford a median-priced
home.
g. Median home price: midway between most expensive and least expensive
h. C.A.R. (California Association or REALTORS):trade association dedicated to
the advancement of professionalism in real estate.
i. Realtor: someone who is a member of the association
ii. Real estate agent: someone who’s licensed by the D.R.E.
i. List 3 major careers in R.E.
i. Management
ii. Finance
iii. Construction
iv. Brokerage
j. Name 2 types of R.E. licenses
i. R.E. Sales person
ii. R.E. Broker
2. PROPERTY, ESTATES, AND OWNERSHIP: “Who owns this property, and What’s their
, CALIFORNIA REAL
ESTATE PRINCIPLES Q &
A EXAM RATED A+
interest in it?”-
a. Bundle of rights (U.P.T.E.E.):
i. Use: right to use, within law, in any way or purpose
ii. Possess: right to live on property and keep others out
iii. Transfer: right to sell, give, or dispose of property
iv. Encumber: right to borrow against, or use as collateral
v. Enjoy: right to peace and quiet enjoyment
b. Personal property vs. Real property
i. Personal aka chattel: moveable, and transferred/sold via Bill of Sale
ii. Real: immoveable, and is transferred/sold via Deed; anything permanently
attached to the land
1. Airspace, to a reasonable height
2. Surface rights
3. Mineral rights: gold, precious metals; unless they’re fugitive (non-
solid, i.e.: gas, oil)
4. Water rights: streams, underground water
a. Under the Correlative-rights Doctrine, the owner may
take only a reasonable share of the underground H2O
b. Riparian Rights: property bordering a river/stream
c. Littoral rights: property bordering a lake; owns up to the
low water mark/edge of the lake
d. For land bordering oceans, property owners own up to the
ordinary high tide mark
e. Appropriation: gov’t right to divert water for a beneficial use
iii. Improvements: anything resting on the land to become permanent, i.e. pools,
fences, garages, etc.
, CALIFORNIA REAL
ESTATE PRINCIPLES Q &
A EXAM RATED A+
iv. Fixtures: anything that’s permanently attached to real property.
1. 5 tests to determine a fixture (M.A.R.I.A.)
a. Method of Attachment – moveable or immoveable?
i. Fructus naturales: naturally occurring plant growth,
i.e. grass
ii. Emblements: commercial groves/crops for annual
harvest/sale
, CALIFORNIA REAL
ESTATE PRINCIPLES Q &
A EXAM RATED A+
i. Fructus indutriales: crops produced by human labor,
i.e. corn
b. Adaptation – item specially made for property?
c. Relationship of parties – tenant/landlord; lender/borrower
d. Intention – what was the intent, and was it informed/written
e. Agreement of the parties
2. Trade fixtures
a. Personal property used to conduct a business, i.e. shelves,
cabinets, refrigerators, etc.
b. Tenants can retain this property, even though landlord
owns it, but is responsible for repairing any damages
that result from replacing them.
3. Anything Appurtenant to the Land
a. Appurtenance: anything used with the land for its benefit
(belonging to), i.e. easements, stock rights to mutual water
companies
c. Types of
b. Easement: right of way across a parcel of land
Estates
i. Estate: ownership interest or claim on real property
1. Freehold Estate
a. Indefinite duration
b. Can be sold or inherited
c. Free from anyone else’s restrictions
d. Types
i. Estates in Fee, aka (Fee Simple Estate or Estate of
