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Conveyancing California Real Estate

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Conveyancing California Real Estate

  1. 1. Tlre neah! Bliue Book of Califonin ry 1- e. e MELVILI,E P. FRASIER,EsQ, Althor ol "Reokl! La1r3 ol Califomia"
  2. 2. 36 ThA Reuttlt BLueB,'ok ol C'Llilornin Clonve)''ancing lIEl,vILLn ['. FRASIDR 111/ Joint Tetuot|! '7'ctttr'tttttin Comno -PnrtlLershi In- l.ter!-Ptut1,/"ixt'r' U " l ) n " ' Io " l l l : f ' Cnl"'t'nt.t " i,.),att. L"Li.tu,i' l;t .."'t .a" t R t:r'J -D"'L ;- of D.ed-Itsttr ' tl)t1t "L)'past at Caif o ii"-n"tt|n,t Es(ror'. ;iiLiltif]iil:'", l.ilnjl,r:,";. "Si;i.;.;';,'rt ily limited space of thjs chapter c can do no4more I lli ' " , : :r i ^ ' * " r ' " " i ; r*n::k*it h " h o r ' "'l ' r ; rs*i; * 1 c 1 i p ; 6 " e r rb 1 d - d , 1 1$ i l b p o u r ' 1 .r, loir,:"n i ""."5^1 u'h "?[ii,i: "^t'"1l' t e s h i , l n / p $ i l s p ' a P l ' g r l i l l c . l o ' r l 1 1 l ' ' r f A s ' j r l' r ' " o 'nsre.r,'n '' p , s "D t a ' t ' . a h a l ' s i r ' a r a r l d r t t r n n s j r " ' r u n ' f o I r I u r r u r s - o r ' -i " t.2 I ;";i;';-;i ;h;".i ,jr 'n" t"'i oJ inil rrlolc' v ;r ' o r :rornia r 'ri r r i l " dl ' ",1 ii," '.ia" r , 1 t . .u . ,t : ? , 1 t )t ",ts,l c(i:to";n- ifr"" *t:iinii"tnt"n"" "li ' to x'hich is madeelsewhcle this vollrnle' il Fir'st as to the natlrle of eslatesin land iD Cali{omia: The owr- e r s l ^ i n l o r o p o r ' lo ) , s i r r l " i r . d i i d u a r ' ' o r ? o " D l i urrs k l r o $ na s o ) o a soli oI s.t"r'a u$ .i isnrl HpIe no nur'lion n:- Io rlerLsr ilr'rses The ownership o{ Dropedy br- scYer':rlpelsons is cither': 1. Of joirt intelests 2. Of paltnership interests 3. Of interests itt comnou. i. Or interest of husba d a d $'ife Husband and wlfe may fre jonrt teiralts, tcnants in conmon, or o1l.rers of com- "il1't"'i-itv munity plopeltt'. JOlNT T]iNANCY Now to clefine and distirguish these iDtelests A p s l a l D ioirlt intclest' o, ioint t"||aj": a s r t ' s u q u r l ] t a r n ' " d .i . a p p c u ' i a r in Lhi:: t t i s o r o o $ r ' " d L J s p ! ^ r a lp " r ' s o n s . : P ' , u a l r o p l e l o l s r l 0 ) . a r r r r c l pxp'Fs'ly da llrrPdrn lne wlrr crearpdbv a s,r'rlP $ ill o" ira'"fcl' wcrr or.trans"ef l o b e a j o i , , , r F r s , , r ) . T h . e c . p ,l i 2 l s l o t h F . l p a r , o n o r ^n.iL:. rl'l'na:Thal te ifla bP'o vnvpdl': o"p irsl.r'rrrneni """1 har il ba "* _hrt th" rs Io llp hplclIn lornr ar'd eprpcsly declarpd "antp lir." a gtrnr is tn Fst rhP full rille irf:rch and i"."""". "'{It",".i"suct 'i *r^"i*i,,t'ur ," LoJv Lhai aa' grrrlFA (L' oa'ota.'dl^and p " "ri"i succession as to owns dll Ihp Lillp ri ^ll 'j'n^s (o lhar tl claarh one oi a""" the tiUe at atl. It rests as under-the original i"".tio" in the srrrviv-ors This fiction of the law has no bea ng on ""*t"" ".t "ft."ge
  3. 3. The Rea,ltlJBkre Book of Caklornia 37 to tlle title; it only existsto give the right of succe3sion to The theory of joint ownership is of no concem io a mortgagee creditor of any joint tenant. The shareof one or 'nan(s-dling not desc.nd his he'rs rrorcan-.il q illed does to be rn The last sur'vivor holds all as he did from the of "oroiuot"" The joirt tenancy may be destroyed at any the estate. the act o{ one of the joint tenants conveyinghis interest to jen- oger, by deedby eiihe[ spouse thc other if the joint or to tr"t*""ri trusfa.i and wiie, or bv executron sale of the in- of;ny tenant. Where three or more personshold as j-ointten- "] oneconveys hi" interestto a slranger. Lhestranger holds}js as tenant in .omrron siih thp olhpm, whilp tha remaining hotd their intelest dr 4?rzo?rg themselves as joint tenants A lion cannot be a joint tenant but may hold as a tenant in com- A ioin( tFnancv .annot be cr'"a'ed bl deed or agrcPmentbe- r the crantees. Il must be .reated by lhe grantor or dpvisor. Lnds teld in ioinl tcnancyor in lanancy in commonare not sub- homestead declaration, unlesslhe Iencnrsbe husbandand wjIe. deedsto create a joint tenancy it should rua to the tees";s joint tenants with ihe ght of survivoNhip." It cannot to "th€it heirs," for the heils do r)ot take. Cut out the "to have to hold" clause. It has no place in a California deed. Thele must o &puglance in the deed. MNANCY IN COMMON An interest or tenancy in comr4on is one owned by several per_ lot in joint ownership or paltnership. The difierence beiween tenancyand tenancy in commonis this: In a tenancy in com- eachtenant owns a propo*ionate share of the prolerty which to his heirs or devisees, interest being sevetedfrom that his co-tenants.Under a joint tenancy,strictly speaking, there are cha&s;as betweenthe tenants eachowns all. Th€re is but little ctical difiercnce between these estates except as they efiect heirs crcdito$ of a tenant after his death. Upon the death of a joint snt his estate is terminated. While alive he can deal with the by d€edor mortgageand his estateis subj€ct to execution. PARTNEBSTIIP INTEREST A DaltnershiDrnlerest is one owned by severnlpersonsfor part_ hip purposes. A pa*nership. as such or any asso'iajion of in- rtls, as such.cannottake Iitle. Thospwho .ompose partner-a or aasociation may own property, but as such partnershipsor siciationsthey cannoi le STailteas,under such desiglation, as there no legal entity. In case of a conveyanceto a partnership to.vest -the ia seveial part)'ters tll€ deed must rul1 to tlem in their indi- ;l names. Whether or not it be partnership property only con- ns the DartDers Ihe;r creditors. Onetaking a deed from all the or 'Sunset Realty tne$ i; in no qnse concemed. lf a deed run to '; and it be a partncrshiP the deed is void.--ff,it be to "Suns€t Co..' a co-parLnefshlp,composed of William Jones and Brown, the deed is Sood for the tille vests in the individuals
  4. 4. 3a The l?eult.! BILteRoot of CQ,lift,t )titL ained and a deed out lr.onl Lhem is good. Purchasem dealing with DartD(rship pl'oper'l]- nra:'trcat the grantols as telants in comnlon. PROPENTY RIGIITS OF HUSBANTJ AND 'IITE Now as to prop€rt) figlrts of hrsband and wife: .{ll prope}ty of the ri1e oyned br het' befole rralriage and that acctuiled after-walds by gilt, devisc, 01'descent,$'ith the rents, issues and p]'ofils thereof, is hef sepalnte plopelty and she m:ry conve)-it without thc consenl of the husb.rrd. Any plopeltt_ corlveled t Ler silce n{a}' 19, 1889, is pr.e suned to be hel. SeDflratclr'opcrtl', and i{ it be colle}'ed to hel and het husbt|nrl, or her !d oth,"r' Dal'tics. slle is presunlc.l lo hold :s a tcnant in cornnon, r.lnlessa coDtlary intelt appear's irl the deed to her. She can .lc€d this sort of property $'ithout the consent of her husba d and this plesumptior becomesfiDal irl favor of a purchaser or enclrmblancel ir good faith and {or a veluable consideratior. (]OIIMUfIY PNOPERT The property of the husb:ud owned Ly hi]n befolc marriage and that acquired allelwalds by gift, devise or- descent, 'ith thc rcnts, issues anC profii.s thereof, is his sepalate ploperLy and he ciln convey it without the consent of his wifc. All other pr'opclty ol husband and rife is corrmunili prirpert]'. but its st?rtuscan be changed by dceds betwcer the spouses,oI agree ments betrveenU'Lem as to tender it the scpzuateIrloperty of either. so If propefty be purchased viljh commuDity funds and the deed taken irr the name of the {ife alonc with fhe knowledge and consent of the husband it yill be lresumed that he irltended to make a grft to her as her sepalate !ropert.. Without reciiing the vAious enactments and decisiolls this may be taken as th€ law r€garding coD.eyances by eiUrer hLrsbtrndaud $-ife or' by both. Nole carefull-v thc lbllof ire, lol rn nany instanccs it will save delay and expelFe. LtrGISLATIVE ACTSAND COURT R,ULINCS Often the signatule of a husb:ud or wife to a deed is denanded when there be Do legal necessity for it. Here then is the present rule as laid do$n by the Legislature and the Coufis: 1. The sep:rlate plopclty of either husband or-wife may be con- veyed at any tirnc, lvith or {ithout consideration by the ownar, lvith- out consent or sigratule of tha other. 2. Conmunity lroperty acquired prior to X{alch 13, 1891, no matter if the deed Intl to either spouseot both, is in the absolute con- ir'ol ol lhe husbaD.l nnd nray be conyeyed bt him {ithout his lrife's consent oI srgrlatrue. 3. Comrnurity propelty acqui)ed s'irrce i{arch 13, 1891, and ?t?jor to May 23, 191?, is fu the control of the husband and he c4n make conve)'anceof it alone plovided the corsideration bc valuable. He canrlot make gift dceds of community propelty acquil'ed since March 13, 1891. 4. All conveyances, mortgages or leasesfor a longer pedod than one year, of conlmunity ploperty acquired sir'I'c€ Mau 23, 1917, rn]ust
  5. 5. The Req.ltaBhe Book ol Cqlifortin 39 executed both husbandand wife. Any deed,mortgageor lease by morethan a year of suchproperty madeby the husbandaloneis It must be rcmember€d, and this is of the greatestimportance: the propedy dealt with be hom€steadall conveyances mortgages or be the joint pelsoral act of htisband and wife, no mattel wheth€r property be separate,community or held in joiDt tenancy. It be the persatui act of the parties. Executionby an Attolney Factis not sufficient. RECITE FACTS TO P&OVE SEPA&ATE PROPF,RTY A careful conveyancer 'lvill insert in a deed to either husband or any facts that will tend to sho1vthat same is sepalate prcperty. mer€statement that effect is rot conclusive; simply acts to to it the rules of evidence, the statenent of such facts as, that but p$perty is a gift, or purchased with gift funds, oI in exchange for otherseparate property the status of which is established. the or like,may be of gleat value to a purchaserin caseof attack. DEDDS IN CALIFORNIA Now as to form and effect of deedsin conrmoD in the State: use the Code pmvidesthat a grant in r'€alproperty may be madein sub- stance follows: "I, A. 8., grant to C. D., all that real ploperty situ- as oted (inselt nameof county) County,State of California, bound€d in rnd descdbed follows: (here inser-tdescription) Wihressmy hand as t h i s . . . . . . . . d a y f . . . . . . . . . . , S i g r e d A . B . " T h i s f o r n ro f d e e d s o . i sufficient pass the full fe€, and any tiUe which the grantor may to aJterwards acquileadverseto that granted. A quit clain deednlay beiDthe same fonn, changingthe yord "Grant" to "Quit Claim." A quitclaimdeedpasses title of the Crantoras fully as a grant d€ed the to all interestownedby him at the date of deliverTof the de€dbut does passaDy title which he may subsequently not acquile. A deed containing words "grant all my ght, title and interest iD etc.," the b a quit claim. Care shouldbe exercised using the codeform of in deed insertthe proper personalpronoun,either "I" or "We" as the to csse may be, beforethe nameof the gr-antoror grantors in the body of the deed. Pmperly oi any kind mal be rrar,sfefrpd excepr a mere possi- biliw not coupled with an inter€st. Thus the possiblefuture inter- est of a soll in his father's property which upon the death of the fathermay vest in the son is not transferable. Likewise the possible hterest of the wife in the community prcperty lvhich nlay be hers uponthe dissolutionof the community by death of the husbandor divorce not transferableby her alone. A deedto lards taken up is under United StatesHomestead the Laws before final Droof is nade is voidanda subsequ."t prtent to rhe granlordoesnot feedthe title. A colveyance may be made of all propetty ownedby the gmntor at the dateof conveyance generaltenns, but such a conveyance in will notpass title to property subsequently acquiredby grantor, no matter if it beso staied.
  6. 6. 40 The Realtu BkE Book of Califarnia ..GRANT,, IMPLIES CMTAIN COVDNANTS I The use of the word "Grant,, in the fonn of deed above shown implies the following covenantsaDdnone omer: 1. That previous to the time of the execution of such convey- ancelhe grantorhas not .onveyed sameestale any rishl. titie. ihe or or jnlerestthcreinlo any pprson other lhan the srantee. 2. That surh estalcis ar rhe lime of the execution suchcon- of veyance free from encumbrancesmade or suffered by the grantor or any one claiming uuder him. This is not a generalwan;nty. If a granteeis taking clear of (,ll encumbrances, whether so made or suf_ fered or not, fle must not rely on this form of warranty but make separate irquirl'r and investiEation. PARTIESTO A CONVEYANCE Now as to parties: There must be a legal capacityin the grantor to convey and in the grantee to receive, otherwise the instrument is invalid. Minors uDdel elghteenyears of age aDd those adjudgedin- sane, or aD incomDetenthaving a guardian, calnot make valid deeds. A woman under the laws of this state reaches majority at eighteen, a man at twenty-one. The deedof a minor, boy or girl, under the age of eighteen trcars is absolutely void and requires no disatrirmanie upoD a[tajningrnajofity. Sucha gmnior may rplain bothmoney and propefly. A decdby a boyovp| pightee year.s rrnder. at)d twenty-one may be disafirmedwithirra rpasonable aller reaching rime majority by restoringjhe pul.haseprice. A deedby one adjudged"insane, oi by onehavinga guardian void and requires disafirmance re- is no to cover the prope*y. Comoraiionsmay lake and conveyreal proper[y as freely as individuals.The deedlo a corporaiion must run in its corporate name-not to its officers. A deed from a corporation must be in the corporate name, by its officials thereunto duly autho zed by;1s governingboard. A dpedby a cor?oralion exonuled any by other personsthan by thoseauthorizedro aci,by its board of dir;ctors or trustees acling as suchin a bodyjs a nullity and cannotbe after_ wards ratified. The deedmust be under thp scal oI the corporation, if it has adopied spal, a olherwise statemcnt rhp should madelhai be tt hasnoseal. Tf lhe idenlilyof the granteedoes appearihedeed no1 rs a nurrry. A.dped attcrnative to gr'^nleps. to JohnSmirl. Mary as 5mrrn.rs a nu rty, ueectq certajnpersons ifustaes an utrin_ lo ns ". lof corpor_ated association suchas a lodgeor a churchesrs the l;Ue in the rnctrvrduats named and the titlp descends their heirs. A deed lo 1,o a grantee as "trustee" without disclosingthe nature of a valid trust vestsjhe title in. thc granLee individualiy he pay a ronsideration. if rI thel.onsldpj-arron paid by cnotherhe holdsas tfus{eelor the be one pajnng the consideration with no powersexcep+ conveyto the to real.owrer. .tt no (-onsideration paid l,hegranteeholds only a bare be legall,tllein,trust for his 0r.o,r/o,' $ilhouf any powers wharsoever, uo nor permttyour.trentsto mskeor accepl suchdeeds,Thev onlv lead lo doubt. confusionand possibte loss. In drawing d.;;;".-;-k; sure you are de-aling s,'itll the proper partiFs. Identitiyour grantor ano gran-tec, _lt-youtind your grantora.quiredritle as J. Smith and ne rs ln tael J. Smyhe tet that facl appearby proper re.ital. lt is
  7. 7. Thz Redta Bk& Book of Caltc0'1),1'(1, 41 of party not name vrhich govems. If the grantor be state. Ascertain if the property be homestead and if so that husbsnd and wife ioin in the sameinstrument andlthat p€$onally. It is not necessary name the consideration, to deedbe by way of gift set out that fact that it may show that the pxoperty is separate. Do rot multiply words in of property or in covenants. The simplest form of ex- 'is be,st it truly set forth the intent. if DEI,IVEBY OT DEED deed of no effect until delivered. This doesnot mean that is manualdelivery of the instrument itself must be made to but there must be someact which standsfor' an absolute intent to deliver in any event before the deed becomes ve at all. A deed may be delivered to a third peNon to be to the grantee under ceflain condilionsbut the inleni to on fulfillment must be absolute and inevocable or there is no in fact It is a commonpractice for husbandand wife to one to lhe other ol fhe samcproperLyand io deliver thpm deeds with instructions io deliyer in caseof the death of the to the survivor or to destroy or return to grantor in case of This is no legal delivery aDd the deedsare not efiective. To become €ffective delivery of a deed must be made in such man- t the srantor surrenders all dominion over the instr.ument. It is lroper to distinguish between a purely legal escrc9 and deliveryin escrow,srhich latter will be seenconstitutesthe an agentand not a true escrowholder. ..ESCROW" AND "DEPOSIA IN ESCROW., A purely legal escror;v created by the deposit of a grant with a is I personto be delivered to the gtantee upon perfomance of condi- cerlain and detprmined in advance and all agreements made thele be nothing further requiring coDsent meeting of minds. or this is done the srantor has surrendered all dominion over the and he cannot recall it. However, where such a deposit is maale there yet renuins something to be agreed upon between the ; in short, if the contract is not executed anal complete, the holds as agent for the grantor, and when the grantee his documentsor money the depositary is then the agent of gnntee as well. WheDa deedis depositedunder a legal escrow authority of the depositary canhot be revoked without the con- of both parties, but where the instruments and money are de- ited under such circumstalces as constitute the depositary the only of the one making deposit,this authority is revocable. in mind herc the sharT distinction between an escrow which is executed contract and nothing remains as a matter of agreement, 4 so-called "deposit in escrow" where the contract is executory there rcmain further matters of settlement and agreement. In firut casethe authorif,y of the depositary cannot be levoked, while tlle second caseit can be. Wher€parties under valid coDsideration a delivery of a deed conditioned upon the papnent of money, or
  8. 8. Thr Re(ltlt Bl e Bork r)l Cel.ilon.ul the rer,dering of furthel considerution to the grantor, they may, as a 'part of thc transaction, crcate a valid escror.. The escrow holdel is the age[t of the grantor for the purpose of holding the deed and re- ceiving the purchase price, and there is imposed the obiigation to retuln the deed at the end of the tine fixed if pa]'nent is not made. Undel such circumstances the vendor has no rjght to withdraw the deed until the expiration of thc stated time. We will take a case where "A" deposits his deed wiih "B" lvith instNctions to deliver to "C" *ithin ten days jf "C" Day the consideration or to securc for him a note secllred by mortgage for the balance of the purchase pr.ice. "A" can withdraw the deed and the instluctions at anv time befor€ ' ' C " r , i r sn e t t h e s pc o n d i r i os . A t r 0 ' , y t i n . aL , " l o t . le p i f . r , s r c t ; o r 'i g h completed either party may demaDd return of his dcposit and the deposital'y can surlender wjlhoul lzri'irg hinself jieble. Ilo!'e|er, alter the tlansacti(D is conUteled ard €'er'ghing in the dcpositaly's hands and the contract be cxecuted, all save actual delilefv. the de- positaly may not surrelrdel eitber docunents or. money tvithout con- scnt of both par.ties. for h€ is the agent ot each. It is a grcwing prac tice in the State to conduct real estAte tlansactions under. condiiions cited above. It is a highly commendable placlice, one facilitating business and making for- th€ safety oI lhe Darties, and such pEctice should be understood in all its details and lesal asDects and p n . . r a g p d . I r i s n o , i n o u r . o p ; " i o )A r l i . r b t et o r e r f l o L r " ; l i e n t h a r , when he has deposited his mone-!.' documents that hc has lost con- ot trol of them. It appears to ns Ural it is $,ell for him to knolv what the Iights, duties, lesponsibilities ard obligations of all par.lies really are that disputes may be avoided. By a so-called "deposit in escr.ow" Ur€ padies to a transaction have not changed their tegal status. They have simply appointed an agent to acl for. each. This agent owes to each party the same obligations and must act impartially. He cannot be censlired nor can he be held to account if the palties to the traDs- action fall apart and he refuse to afbitr.ate between them or refuse to comply with the demands of one paiiy without the coDsent of th€ other. He is agent for both without distiDction.

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