Legal Question in Real Estate Law in California

Re: California real estate law

Grant deeds are used to convey property -- either as a gift or for monetary consideration. Therefore, a "gift" deed is a type of "grant deed". As for the theories, "this state, at an early date, adopted the 'lien' theory of mortgages, and it adopted the 'title' theory in reference to deeds of trust." See Bank of Italy etc. Assn. v. Bentley (1933) 217 Cal. 644, 656, 20 P.2d 940, 944. With deeds of trust, title to the property actually is conveyed to the trustee who retains such title until the debt is satisfied or the property sold to enforce payment.

Re: California real estate law

Mr. Cohen is quite correct.

Might I suggest using a search engine more directed towards the legal field. Google is ggod for basic research, but not for the detailed type that you are looking for.

Try HG.com, FindLaw.com or our site, theLawShack.com.

Scott Linden

Re: California real estate law

in a nutshell, california can be both, depending on the type of encumberance. meaning, certain encumberances are deemed liens (i.e. a mechanic's lien), while others are deemed title encumberances (i.e. a trust deed on a home where the trustee holds title until the loan is paid off). next, a grant deed can be either in the form of a gift or thru a sales transaction. a gift deed requires no consideration in order for the grantor to convey its interest to the grantee. hope this has helped.

Re: California real estate law

The whole thing is really a misnomer. Attorney Cohen's citation is correct regarding Bank of Italy National Trust & Savings Association v. Bentley (1933) 217 Cal. 644.

A great deal of the language in that case is no longer relevant. For example, the case states that "ordinarily a deed of trust may not be judicially foreclosed." This is no longer applicable in the modern age. (See Code of Civ. Proc. sec. 725a.)

That case also states that "the statute of limitations never runs against the power of sale in a deed of trust..." This is also no longer true. In 1982, the California legislature enacted sections 882.020-882.040 of the Civil Code, which establish for the first time a statute of limitations on the exercise of a power of sale in a deed of trust. (Miller v. Provost (1st Dist. 1994) 26 Cal. App. 4th 1703.)

The point of all this is that there is really no longer any difference between mortgages and deeds of trust. Many people tend to call deeds of trust mortgages. John Hetland writes that a "[deed of trust's] function is the same as that of the morgtage, i.e., to secure an obligation, and as a result there is little substantive difference between the two." (California Real Estate Secured Transactions (C.E.B., 1970) sections 2.4, 2.5, p. 10.)

Many people will speak of their deed of trust as a lien on their property, even though my fellow attorneys are correct to point out that the trustor conveys title in the form of a power of sale and a power to convey to the trustee. A trustor can convey the property that is encumbered by a deed of trust, subject to some limitations, and the new owner will be "subject to" the existing deed of trust.

As you can see, the distinction has become academic due to the passage of time and modern legislation.

If you are interested, a good source on this subject is Maxwell, Riesenfeld, Hetland and Warren's California Cases on Security Transactions in Land (4th Edition).

Very truly yours,