California Real Estate Chapter 5

Police power

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

Comprehensive Planning

Unrestricted and unplanned development can have undesirable results

Planning commission

California requires cities and counties to have a planning agency"
"Responsible for designing and adopting a comprehensive, long-term plan for all the development within the city or county.

Master plan

(General plan)
(Comprehensive plan)
"A comprehensive, long-term plan for all the development within the city or county"
The agency responsible for preparing the plan is usually called the planning commission.
"A local government implements its general pla

General plan

**See Master plan
"A comprehensive, long-term plan of development for a community, which is implemented by zoning and other laws

Zoning

Divides a community into areas (zones) that are set aside for a particular type of use, such as agricultural, residential, commercial, or industrial use.
Each of these basic classifications typically has subcategories.
For instance, an industrial distric

Buffers

Undeveloped areas

Zoning ordinances

Regulate the height, size, and shape of buildings, as well as their use.
They also usually include setback and side yard requirements, which prescribe the minimum distance between a building and the property lines.
These regulations control population de

Zoning Exceptions & Amendments

Complications inevitably arise when zoning regulations are administered and enforced. So zoning ordinances provide for certain exceptions and changes to their rules, including:
-nonconforming uses,
-variances,
-conditional uses,
-rezones
A zoning excepti

Nonconforming Uses

A formerly legal use that doesn't conform to a new zoning ordinance, but is nonetheless allowed to continue"
"Arise when an area is zoned for the first time, or when a zoning ordinance is amended.
Certain established uses that were previously lawful may

Grandfather clause

A nonconforming use provision in a zoning ordinance"
"However, even though nonconforming uses are "grandfathered in" and allowed to remain, the local government usually prefers to have all properties in a zone eventually conform to the current rules.
So

Variances

An authorization to deviate from the rules in a zoning ordinance, granted because strict enforcement would cause undue hardship for the property owner"
"Authorization to build or maintain a structure or use that is ordinarily prohibited by the zoning ord

Conditional Uses

(Special exceptions)
A special use that is allowed to operate in a neighborhood where it would otherwise be prohibited by the zoning.
"Various special uses, such as schools, hospitals, and places of worship, don't fit into the ordinary zoning categories.

Conditional use permits

(Special exception permits)
"A permit that allows a special use, such as a school or a hospital, to operate in a neighborhood where it would oth"erwise be prohibited by the zoning."
"Allowing a limited number of these uses to operate in compliance with sp

Special exception permits

**See Conditional use permits

Rezones

(Zoning amendment)
"An amendment to a zoning ordinance; a property owner who feels his property has been zoned improperly may apply for a rezone"
"If a property owner believes that his property has been zoned improperly, he may petition the local zoning a

Zoning amendment

**See Rezones

Downzoning

When an area is rezoned to a more restrictive use (for example, a change from multifamily dwellings to single-family dwellings), it's referred to as downzoning.

Zoning vs. Private Restrictions

Sometimes private restrictions impose stricter limits on property than the local zoning ordinance"
"The general rule is that the more restrictive requirement must be met"
"In cases where the zoning is more restrictive than a private restriction, the zoni

Building Codes

Another exercise of the police power.
Building codes are regulations that set minimum standards for construction methods and materials.
Building codes protect the public from unsafe or unworkmanlike construction.
They are generally divided into specializ

Certificate of occupancy

A document issued by the governing authority stating that a building complies with applicable laws and permitting occupancy for its designated use.

Subdivision Regulations

Another way in which state and local governments control land use is by regulating subdivisions"
"California requires subdividers to comply with both the Subdivision Map Act and the Subdivided Lands Law.
In certain cases, a subdivider may also have to co

Subdivision

A division of one parcel of land into two or more parcels or lots.

Subdivision types

There are various types of subdivisions in California, including:
-standard,
-common interest,
-undivided interest subdivisions.
Subdivisions are usually residential, but they may be
-commercial,
-industrial,
-recreational.

Standard Subdivisions

Each owner owns a separate parcel of land.
A standard subdivision is technically defined as one with no common rights of either ownership or use among the various owners of the individual parcels created by the division.
Standard subdivisions usually con

Common Interest Subdivisions

("Common interest development, or CID"
"An individual owner owns or leases a separate lot or unit along with an undivided interest in the common areas of the project.
Condominium and cooperative projects are examples of common interest subdivisions.
For e

Common interest development (CID)

**See Common Interest Subdivisions

Planned developments

Also common interest subdivisions.
A typical planned development looks like a standard subdivision, since each lot is improved with a single-family home.
But a planned development consists of lots that are separately owned, plus areas that are owned in c

Timeshare

Another type of common interest subdivision. In a timesharing arrangement, buyers purchase the exclusive right to possession of the property for a specified period each year.
A timeshare could be developed for any kind of housing, but it is most commonly

Undivided Interest Subdivisions

Individual owners own undivided interests in a parcel of land and have a nonexclusive right to use and occupy the property.
The undivided interests are typically tenancies in common.
An example of an undivided interest subdivision is a recreational vehic

Laws Regulating Subdivisions

In California:
-the Subdivision Map Act,
-the Subdivided Lands Law,
-the Interstate Land Sales Full Disclosure Act.
"A number of federal and state environmental laws affect land use, including:
-NEPA,
-CERCLA,
-CEQA,
-the California Coastal Act,
-the Alq

Subdivision Map Act

A "procedural" law, one that sets forth the procedures that must be followed to subdivide land
In most cases, the subdivider must submit tentative and final subdivision maps to the local planning agency for approval.
If there are no more than four lots, a

Subdivided Lands Law

A "consumer protection" law, one that requires the subdivider to disclose certain information to lot buyers
In most cases, the subdivider must submit tentative and final subdivision maps to the local planning agency for approval.
If there are no more than

Interstate Land Sales Full Disclosure Act

A federal consumer protection law that applies to subdivision lots sold in interstate commerce.

Tentative subdivision map

When land is subdivided into five or more parcels, the subdivider must file a tentative subdivision map with the local planning agency.
The tentative map includes:
-the legal description of the property
-shows the proposed lot boundaries,
-the location o

Final map

Must bear the signatures of the owners and of representatives of each public utility or other entity that considered the tentative map.
Must be filed within 24 months of tentative map approval
No sale, lease, or contract for the sale or lease of any subd

Parcel map

Instead of tentative and final maps, a parcel map can be filed for subdivisions with two to four parcels.
A parcel map doesn't have to be as detailed as a tentative subdivision map or a final map

Final subdivision public report

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 th

Preliminary report

The Commissioner issues a preliminary report before issuing the final report.
If the developer gives a prospective buyer a copy of a preliminary report, the buyer can reserve a lot in the subdivision.
But until the buyer receives the final report, he has

Advertising purposes

If a final public report is used for advertising purposes, it must be used in its entirety.
A subdivider cannot, in an advertisement, refer to any improvements or facilities that do not actually exist, unless their completion is provided for with a bond.

Out-of-State Subdivisions

If property in a subdivision located in another state is offered for sale in California, the subdivision must be registered with the California Department of Real Estate.
Advertising and sales contracts must have disclaimers explaining that the DRE hasn'

ILSA

(Interstate Land Sales Full Disclosure Act)
"A federal consumer protection law concerning subdivisions of vacant land offered for sale or lease in interstate commerce.
It has registration requirements (requiring developers to register their projects with

Environmental Laws

Laws aimed at preserving and protecting the physical environment, and many local governments have additional environmental regulations.
These laws can have a substantial impact on the ways in which a property owner is allowed to use her land.

NEPA

(National Environmental Policy Act)
"A federal law that requires federal agencies to prepare an environmental impact statement (EIS) for governmental actions planned or approved would have a significant impact on the environment.
NEPA also applies to priv

EIS

(Environmental impact statement)
"Examines a proposed project's probable environmental effects (both positive and negative)on energy consumption, water facilities, sewage systems, drainage, and many other environmental, economic, and social factors, and a

CERCLA

(Comprehensive Environmental Response, Compensation, and Liability Act)
"A federal law, concerns liability for environmental cleanup costs.
In some cases, the current owners of contaminated property may be required to pay for cleanup, even if they did not

EPA

Environmental Protection Agency

Pollution Control Laws

Federal legislation sets national standards for air and water quality and requires the states to implement these objectives.
Permits are required for the discharge of pollutants into the air or water.

CEQA

(California Environmental Quality Act)
"This California law is similar to the National Environmental Policy Act.
CEQA requires state or local agencies to prepare an environmental impact report (EIR) for any project (public or private) that may have a sign

EIR

(Environmental impact report)

Negative declaration

Significant adverse effects

California Coastal Act

The Coastal Act established the Coastal Commission, which researches ways to protect the state's coastline and controls development along the coast.
It has several regional divisions.
No development is allowed in the coastal zone without a permit from th

Alquist-Priolo Act

Pursuant to the Alquist-Priolo Act, certain areas of the state are delineated as earthquake fault zones (sometimes called "special studies zones") on maps prepared by the state geologist.
Requires disclosure of geologic hazards, such as earthquake faults

Earthquake fault zones

(Special studies zones)

Eminent Domain

The power of eminent domain is the federal or state government's power to take private property for a public use upon payment of just compensation to the owner"
"The government can regulate the use of private property with a variety of laws�zoning ordina

Condemnation

The legal process by which private property is taken for public use by the government exercising its power of eminent domain.
When a particular property is needed for a public use or purpose, the government first offers to buy it from the owner.
If the o

Just compensation

The fair market value of the property

Public use or Public purpose

What constitutes a public use or public purpose can be a matter of controversy.
In a 2005 case called Kelo v. City of New London, the U.S. Supreme Court ruled that it was constitutional for a Connecticut city to condemn private property in an economicall

Taxation of Real Property

Real property taxes affect property ownership.
While taxation of property doesn't directly limit use, it affects title.
Property taxation creates liens against the taxed property, and if the taxes aren't paid, the government can foreclose.
The taxes crea

General Real Estate Taxes

(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

Assessment

The valuation of property for purposes of taxation"
"General real estate taxes are ad valorem taxes."
In order to impose ad valorem taxes, there must be an assessment.
An assessment is a valuation of property for purposes of taxation. This valuation is t

Ad valorem

The amount of tax owed depends on the value of the property
Ad valorem is a Latin phrase that means "according to value.

Change in ownership statement

When the property is sold or otherwise transferred, the new owner must file a change in ownership statement with the county recorder or assessor within 45 days of the transfer"
Unless the transaction is exempt from reassessment, the property's assessed v

Base value

The purchase price of a home"
The purchase price of a home becomes its base value. (If a home was last purchased prior to 1975, the property's 1975 value is its base value.)
As long as the same person owns the property and no improvements are made, its a

Reassessment Exceptions

To avoid the harsh result of an increased assessment following a transfer of title when the property hasn't been sold or traded for profit, the law exempts several types of transfers from reassessment
"The following transfers are exempt:
-transfers where

Appeals Board

(Board of equalization)
"Has the power to adjust the assessed value of property"
"Property owners who are dissatisfied with the assessment of their property may appeal to the county.
In some counties, appeals are handled by the Board of Supervisors.
Large

Collection of Taxes

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

Tax Exemptions

While the general rule is that all property is taxed at its full cash value, there are numerous total or partial exemptions.
Property owned by the federal, state, or local government is totally exempt from taxation; so is most property that's used for re

Special Assessments

(Local improvement taxes)
"Are levied to pay for improvements that benefit particular properties, such as the installation of street lights, sewers, or the widening of a street.
The assessment is intended to cover the cost of the improvement.
Only the pro

Street Improvement Act of 1911

Allows government entities to make street improvements and bill the affected property owners.
If the bills remain unpaid for more than 30 days, bonds will be issued to pay for the improvements.
Funds raised under this act can be used to pay for street pa

Distinctions between general real estate taxes & special assessments

1. General real estate taxes are levied to pay for ongoing government services, such as police protection.
A special assessment is levied to pay for a specific improvement, such as adding sidewalks to a section of street.
2. General real estate taxes are

Other Special Taxes

California law also allows some other types of special taxes to be assessed against real property.
These tend to be hybrids, resembling general real estate taxes in some ways (they can be used to pay for ongoing services) and special assessments in other

Mello-Roos Community Facilities Act of 1982

Used for a greater variety of improvements, facilities, and services than traditional special assessments"
"A Mello-Roos lien might be foreclosed on after payment has been delinquent for only 180 days, in contrast to the five-year redemption period allow

Documentary Transfer Tax

When a 1- to 4-unit residential property in California is sold, the seller must make a good faith effort to provide the buyer with notice of any special taxes assessed against the property.
"An excise tax is levied on each sale of real property in Califor

1. The police power is the government's power to:
A. take private property for public use
B. enact laws for the protection of the public health, safety, morals, and general welfare
C. tax property to pay for police protection
D. None of the above

B. enact laws for the protection of the public health, safety, morals, and general welfare

2. Which of the following is likely to be controlled by a zoning ordinance?
A. Use of the property
B. Building height
C. Placement of a building on a lot
D. All of the above

D. All of the above

3. Which of the following is NOT likely to be one of the goals of a land use control law?
A. Ensuring that properties are put to their most profitable use
B. Controlling growth and population density
C. Ensuring that neighboring uses are compatible
D. Pre

A. Ensuring that properties are put to their most profitable use

4. As a general rule, when a new zoning ordinance goes into effect, nonconforming uses:
A. must comply with the new law within 90 days
B. must shut down within 90 days
C. will be granted conditional use permits
D. are allowed to continue, but not to expan

D. are allowed to continue, but not to expand

5. An owner who feels that his property was improperly zoned should apply for a:
A. conditional use permit
B. variance
C. rezone
D.nonconforming use permit

C. rezone

6. A hospital is being built in a residential neighborhood. This was probably authorized by a:
A. nonconforming use permit
B. variance
C. rezone
D. conditional use permit

D. conditional use permit

7. Which of these is an example of a variance?
A. Changing a zoning ordinance to allow commercial uses in a neighborhood that was formerly zoned residential
B. Authorizing a structure to be built only 12 feet from the lot's boundary, although the zoning o

B. Authorizing a structure to be built only 12 feet from the lot's boundary, although the zoning ordinance requires 15-foot setbacks

8. Which of these is NOT an exercise of the police power?
A. Condemnation
B. Building code
C. Zoning ordinance
D. Subdivision regulations

A. Condemnation

9. Eminent domain differs from the police power in that:
A. the government is required to compensate the property owner
B. it can be exercised only by the state government, not a city or county government
C. it affects only the use of the property, not th

A. the government is required to compensate the property owner

10. The Hancocks are planning to add a room onto their house. Before construction begins, they are probably required to:
A. request a zoning inspection
B. submit a proposal to the planning
commission
C. obtain a building permit
D. All of the above

C. obtain a building permit

11. A special assessment is the same thing as:
A. a general real estate tax
B. an improvement tax
C. a real estate excise tax
D. a transfer tax

B. an improvement tax

12. General real estate taxes are:
A. used to support the general operation and services of government
B. levied annually
C. based on the value of the taxed property
D. All of the above

D. All of the above

13. Which of these is a state law that requires an environmental impact report to be prepared in certain circumstances?
A. ILSFDA
B. CERCLA
C. CEQA
D. NEPA

C. CEQA

14.The documentary transfer tax is based on the property's:
A. selling price
B. fair market value
C. current use
D. highest and best use

A. selling price

15. Lots in a subdivision cannot be sold until:
A. a final map is filed with the local planning agency
B. a parcel map is filed with the Office of Interstate Land Sales
C. a preliminary public report is issued by the Commissioner
D. a building permit has

A. a final map is filed with the local planning agency

Smart growth

Developing additional density in areas that are already developed, rather than increasing sprawl.

Building permit

Written governmental permission for the construction, alteration, or demolition of an improvement, showing compliance with building codes and zoning ordinances. See certificate of occupancy
The building permit system is a way of enforcing compliance with

Uniform Building Code

Regulations enforced by the local government stating how construction methods and issues should be implemented (code primarily used in the western and central portions of the United States)
If conflicts exist between local building codes and state or fede

California Housing Law

In California, in addition
to local building codes, minimum construction and occupancy requirements are enforced through the state Housing Law.

Contractors License Law

The construction and housing industries are also regulated through the Contractors License Law

Desist and refrain

If a subdivider is violating any provision of the Subdivided Lands Law, the Commissioner may stop the violation with a desist and refrain order.

R-1

Detached single family homes

R-2

Duplexes & Row houses

R-3

Multifamily Apartments and Condo's

R-4

Any other type of housing.
Mobile homes

A

Agricultural

M

Industrial

Building permits

Building codes are enforced through the building permit system.
A property owner must submit plans and obtain a permit from the city or county before constructing a new building or repairing, improving, or altering an existing building.

Environmental impact report

A document required by the National Environmental Policy Act (NEPA) for certain actions "significantly affecting the quality of the human environment".
A public hearing must be held for each environmental impact report.
The hearing must consider alternati

Tax assessment roll

The county assessor maintains a list of all taxable properties in his jurisdiction, called a tax assessment roll, in order to establish the available tax base.

Supplemental assessment

If a property is sold in the middle of the tax year, a supplemental assessment will be necessary.
The buyer will need to pay a supplemental assessment for the remainder of the tax year that covers the difference between the previous tax bill and the new t

Tax In default

The owner/occupants of a property that has been sold to the state by operation of law for failure to pay property taxes
Beginning with the date a residential property is sold to the state by operation of law for delinquent taxes, the taxpayer has the righ