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Escheat occurs when someone dies intestate (without a will) and no legal heirs exist. The property reverts to the state to prevent land from being ownerless. This differs from eminent domain (government taking with compensation), police power (regulation), and condemnation (process of eminent domain). Agents must understand inheritance laws because they impact probate sales and title transfers in California.

The acceleration clause gives lenders the right to demand full repayment if the borrower defaults on loan terms. The alienation clause requires repayment upon transfer of property, the subordination clause establishes lien priority, and the defeasance clause cancels the lender’s claim once the loan is paid. California licensees must understand mortgage clauses to explain loan obligations and risks to clients.

A quitclaim deed transfers only the grantor’s interest, with no warranties or guarantees. It is commonly used to clear clouds on title or between family members. A grant deed (most common in California) provides limited warranties, while warranty deeds provide full guarantees. Trustee’s deeds are used in foreclosure. Agents must explain the risks associated with quitclaim deeds to clients.

Riparian rights apply to land bordering moving bodies of water, such as rivers or streams, allowing the owner reasonable use. Littoral rights apply to properties along lakes or oceans. Easements in gross are unrelated third-party use rights, and encumbrances are claims against property. California real estate professionals must understand water rights, as they affect property use, value, and disclosure obligations.

Loan-to-value ratio (LTV) = Loan amount ÷ Property value × 100

•Property value = $300,000

•LTV = 80% → Loan amount = 300,000 × 0.80 = $240,000

LTV is crucial in California real estate financing for assessing mortgage risk, determining private mortgage insurance (PMI) requirements, and structuring loans. Licensees should calculate LTV to guide clients and ensure loan compliance.