Sales of Subdivisions are Remunerative Transactions - Outlines of the Several Methods of Handling Tracts - Making, Filing, Accepting, Endorsing and Recording Map - Gain on Lots in New Subdivisions Generally Small.
Sec. 134. Buying acreage property within a city, or contiguous to or adjacent to the city limits, and subdividing and selling the same as lots, is one of the most remunerative of real estate transactions. This is done in one of three or more ways, to wit: (a) by buying the acreage outright, and then subdividing and improving it, which requires the investment of considerable capital at the outset; (b) by paying a portion of the purchase price in cash, and having the property conveyed in trust to a trustee - preferably a title company - and applying a portion of the purchase price of each lot, as sold, to the extinguishment of the debt on the property as indicated in Form No. 88: or (c) by being appointed exclusive agent for the subdivision and sale of the property, as indicated in Form No. 87. Both of the above mentioned forms are largely self-explanatory. Subdivisions are also handled exclusively by an agent on a commission basis, the commission being large enough to enable other agents to participate therein.
Sec. 135. Lots in subdivisions are sold in two ways, namely: (a) by a contract of sale, whereby the purchaser makes a part payment in cash, and agrees to pay the remainder at certain specified times, together with interest and taxes, he to receive a deed upon full compliance with the terms of the contract; or (b) by the purchaser paying a portion in cash, and receiving a deed to the premises, and thereupon giving to the seller a note or notes, secured by a mortgage on the lots, for the unpaid portion of the purchase price.
Sec. 136. The person subdividing is required to have a map made of the premises, showing the lots and streets, with dimensions and distances, and such map must be filed with, and accepted and endorsed by, some designated city or county official or officials, such as the city engineer, or County Board of Supervisors. No map will be considered, accepted or endorsed, unless the lines of the streets and highways shown thereon are a continuation of the lines of streets and highways of adjacent subdivisions, and the connections of such lines must be plainly shown on the face of the map. The areas of lots as shown on the map must not include any portion used or offered for dedication to the public as streets or highways, and all distances and courses along the side lines, and across highways must be plainly written on the face of the map. Where these or similar rules have not been observed in times past, there are, in the streets and highways, jogs, set-offs and cul-de-sacs, annoying and bewildering alike to citizens and strangers. The map, after being accepted and endorsed, is filed for record in the office of the County Recorder.
Sec. 137. The grades, curbs and sidewalks of streets within the limits of a city must be made in accordance with plans, profiles and cross-sections prepared by the city engineer. In Los Angeles, curbs are to be constructed of cement concrete. Curbs are to be six inches wide on top, twelve inches wide on the bottom and eighteen inches deep. Sidewalks are to be three and one-half inches thick. No more than one street can be closed at one time while street work is in progress.
Sec. 138. From the standpoint of the investor, the buying of a lot in a comparatively close-in subdivision, where building restrictions are reasonable, for the purpose of erecting a residence thereon, is proper, provided the tract is being generally improved by similar residences, and the investor prefers to live amid semi-suburban surroundings. There are discomforts incident to residing in new tracts which do not attach to the older residence portions of a city.
Sec. 139. If the investor buys in a new tract by way of speculation, and makes a small cash payment, with the expectation of selling at an advance before the next payment becomes due, he is apt to be disappointed, as there are usually too many such lots, and a number of other persons may be pursuing precisely the same plan, and consequently, there are likely to be more sellers than buyers. Surrounding "boom" towns, there is acreage which has been sold as town lots and has again reverted to acreage; and it not infrequently happens, within the limits of a city, that one may buy lots in a tract, a few years after the tract has been placed on the market, cheaper than when such lots were first offered. The possible immediate gain on lots in new subdivisions is generally small.