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BRE-110, California Real Estate Law
Huber and Tyler
Chapters # 9 & 10
Overview Â
Chapter 9 explores the alternatives to litigation. Often, disputes about property rights between two parties are resolved in a litigation process. Alternative options, such as negotiation, mediation, or arbitration, are required by the courts to save time and avoid wasting taxpayersÂ’ money (Huber and Tyler, p. 329). Additional topics covered in this chapter include resolving disputes concerning a real estate license and complaint resolution used by the Department of Real Estate (DRE) and the California Association of Realtors (CAR). I will be reviewing the types of arbitration from Chapter 9. The topics of title and alienation are the focus of Chapter 10. Property ownership is transferred, either voluntary or involuntary, by many different methods. Voluntary types of transfers include transfers by deed and/or by will. Involuntary types of transfers include intestate succession, escheat, foreclosure sales, adverse possession, condemnation, dedication, or accession. I will be discussing the types of deeds that are used to transfer property ownership and the concept of condemnation from Chapter 10.
Key Concept #1 – Chapter 9
I learned that when a dispute is submitted to a third party for final resolution, it is called arbitration, and there are four types of arbitration (Huber and Tyler, pp. 336-338). The four types of arbitration include (1) court-ordered (mandated) arbitration, (2) private arbitration, (3) nonbinding or binding arbitration, and (4) California arbitration legislation. Court-ordered arbitration is mandated by the courts before the case can go to the trial courts. Private arbitration is when the two parties have agreed by contract, or it is a provision in an existing contract, to an arbitration process for any potential disputes to avoid litigation. Nonbinding arbitration means that the disputing parties have agreed that the arbitrator’s decision is not final and may be reviewed by the courts, whereas a binding arbitration means the arbitrator’s decision is final and binding and will not be further reviewed by the courts. California arbitration legislation means that both parties must be aware that there is an arbitration clause in the real estate contract they are entering, and this section labeled “Arbitration of Disputes” must be initialed to be valid.
Key Concept #2 – Chapter 10
In Chapter 10, I learned that the types of deeds most commonly used to transfer title in California are grant deeds and 0quitclaim deeds (Huber and Tyler, pp. 363-365). A grant deed refers to a deed that is conveyed with the word grant, meaning one party is granting ownership to another party. Essentially, almost every real estate transaction in California contains a grant deed. A grant deed has two implied warranties: (1) the title has not been conveyed to anyone else and (2) there are no known encumbrances attached to the property without being disclosed. A quitclaim deed refers to a deed transfer of an interest, such as part of a land, or title without warranties. A quitclaim deed is often used to clear a cloud on the title such as an encumbrance or defeat on a title.
Key Concept #3 – Chapter 10
I learned about the concept of condemnation, also known as eminent domain in Chapter 10 (Huber and Tyler, pp. 378-379). Eminent domain is when the government takes private property for public use and the government compensates the private property owners with fair market value (FMV). Government entities have the power to condemn privately owned property for the use of public property that benefits the public. When the private owners don’t want to sell their property and reject the government’s offer, the government files a condemnation lawsuit, and the courts will decide on fair compensation and order the property condemned. The story about the “little pink house” is a perfect example of the damages caused by eminent domain. When only a part of the property is condemned for public use and the property value decreases due to the condemnation, the government is required to pay for severance damages (loss of value). Inverse condemnation occurs when private property is damaged by government actions and the government doesn’t take any condemnation action, causing the private owner to sue.
Summary
These two chapters were both informative and provided detailed information about real estate court procedures and methods of transferring ownership. To summarize, arbitration is an alternative option to settle disputes to avoid a lengthy litigation process. Grant deeds and quitclaim deeds are used to transfer property and clear titles. Governmental takeover of private property for public purpose is known as eminent domain.
