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Beneficial ownership has been characterized as when “the
buyer has the possession and use of the property to the complete
exclusion of the seller, subject only to the seller’s remedies in
case of default.” County of San Diego v. Davis, 33 P.2d 827, 828
(Cal. 1934).
Petitioner argues that under the terms of the agreement,
beginning in September of 1996 petitioner acquired equitable
ownership of the property. Petitioner points out that he
possessed the property, that after entering into the agreement he
began making larger payments to Peterson, and that he paid $5,000
to Peterson as well as property taxes on the property.
We agree with respondent that the evidence does not
establish that during 2000 petitioner was the equitable owner of
the property.
Various benefits and burdens were retained by Peterson.
Peterson continued to pay insurance on the property and to pay
other liabilities as owner of the property. Peterson made
decisions relating to improvements on the property.
We are sympathetic to petitioner, as the agreement did
convey to petitioner some benefits and burdens of ownership.
However, given the facts before us, California courts would
construe the agreement at issue as an option contract, not as a
purchase and sale contract.
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Last modified: May 25, 2011