Unit 3: Encumbrances on Real Property

What's the definition of an encroachment? A. An intrusion onto another person's property B. An outstanding lien on a property C. The permitted use of another person's property for a specific use D. The purchase of a small portion of another person's property

A. An intrusion onto another person's property

Which of the following is NOT a type of encumbrance? A. Appreciation B. Easement C. Encroachment D. Lien

A. Appreciation

A part of your property is used by the local utility company to maintain its power lines. What's this an example of? A. Easement B. Eminent Domain C. Encroachment D. Illegal Use

A. Easement

___ provide a limited right to use a property for a specified purpose. A. Easements B. Encroachments C. Setbacks D. Shared Structures

A. Easements

Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______. A. License B. Easement C. Grant D. Covenant

A. License

Liam is a contractor that discloses his right to place a lien on the properties where he works in the event of non-payment. What type of lien is this? A. Judgement B. Mechanic's C. Mortgage D. Income Tax

B. Mechanic's

An easement is one type of encumbrance that can affect a property. Which of these statements about easements is true? A. An easement is a right acquired by one party to use the land of another property, usually for one day B. An easement requires the property owner's express permission C. Easements are often established by a written agreement between the parties D. Easements must be removed before property can be transferred

C. Easements are often established by a written agreement between the parties

What would happen if you bought a house and later found out that there were unpaid liens against the property? A. Nothing. The former owner owes the money on the liens. B. The lien claimants would lose their liens against your property. C. The unpaid liens could trigger a foreclosure on your property. D. You would have to assume a loan to pay off the liens.

C. The unpaid liens could trigger a foreclosure on your property.

What does the concept "first in time" refer to when discussing lien priority? A. First mortgages are paid over property taxes. B. First mortgages are paid over time. C. Junior lien holders will not be paid. D. Liens are paid based on date of filing.

D. Liens are paid based on date of filing.

An easement dictates that property owner A gives the right to property owner B to use a portion of the property. Which term describes property A? A. Domain Estate B. Dominant Estate C. Service Estate D. Servient Estate

D. Servient Estate

Frank owns a property on which there is walkway to the beach shared by his neighbors on either side. What is Frank's property? A. Dominant Estate B. Gross Estate C. Prescriptive Estate D. Servient Estate

D. Servient Estate

Brandon's home has been foreclosed on. He had an outstanding loan balance of $145,000, which he owed to his lender, XYZ Lending for a loan taken out in 2009. There's also a lien against the property recorded in 2014 for an unpaid student loan of $25,000, and a HELOC established in 2012 of $30,000, of which he'd used $10,000. If his foreclosure nets $150,000, how much will each creditor be paid? A. The student loan will be paid off, then XYZ Lending will receive $125,000 of what it's owed, and his HELOC will receive nothing. B. The student loan will be repaid, then XYZ Lending and the HELOC lender will split the remaining proceeds. C. XYZ Lending and the HELOC will each get half of what they're owed, and the lien holder for the student loan will not be repaid. D. XYZ Lending will receive $145,000, the HELOC lender will receive $5,000, and the lien holder for his student loan will not be repaid.

D. XYZ Lending will receive $145,000, the HELOC lender will receive $5,000, and the lien holder for his student loan will not be repaid.