Deeds, Estates, Interests, Holding Title and Priority
An estate describes an ownership interest that a person has in real property that is, or may become, possessory, and which is usually measured in terms of duration. For example, a fee simple estate is an estate for an indefinite duration, while a life estate is an estate for the duration of the life or lives of one or more persons. All estates are interests in land, but not all interests in land are estates. Security devices, such as mortgages and deeds of trust or easements are interests, but they are not estates.
There are several ways to hold title to real property. “Joint tenancy” is an estate with two or more co-owners who take identical interests simultaneously by the same instrument and with the same right to possession. “Community property” is owned in common by husband and wife as a result of its having been acquired during the marriage by means other than an inheritance or a gift to one spouse, each spouse generally holds a one-half interest in the property. “Community property with right of survivorship” is community property but on the death of one of the spouses, the property passes to the survivor like joint tenancy, without administration, pursuant to the terms of the instrument. “Tenancy in common” is created in favor of two or more persons unless a partnership was established, or joint tenancy was declared, or the property was taken as community property.
California has a race-notice statute, which provides that the first to record has priority, if he or she had no notice of a prior interest.
Real estate contacts fall under the same body of law that governs all contracts. The intent of the parties controls the interpretation. There are usually mutual promises given in consideration of each other, and each party is both a promisor and a promisee. There are express and implied contracts. Real estate contracts usually must be in writing, and if the agreement by its terms is not to be performed within one year from the date it is made, it definitely must be in writing. Fraud and mistake can vitiate a contract.Real estate brokers (and real estate agents) have a special relationship with their clients. This is called an “agency relationship”. The relationship is created when the client authorizes the broker to conduct a transaction with third persons on behalf of the client and to exercise a degree of discretion in effecting the purposes of the client. The relationship establishes a fiduciary relationship. As a fiduciary the broker has the same obligations of diligence and faithful service as a trustee. The real estate broker becomes a fiduciary in relations with the client and assumes duties of skill, care and diligence, obligations, and high standards of good faith.