ENCUMBRANCES

An encumbrance that involves money is called a lien. It is a charge against property, making the property security for payment of a debt. It is voluntary when it is created by a contract entered into by the debtor and creditor, pledging the property to secure the debt, like a mortgage or deed of trust. It is involuntary when it is imposed by operation of law, such as property tax lien, a construction (or mechanic's) lien, a special assessment for public improvements benefiting property, an income tax lien, an estate tax lien, or a judgment lien resulting from a lawsuit. It is statutory when authorized by state statute. A mechanic's lien is an example of a statutory (authorized by state statue) lien. It is equitable when imposed by a court of equity.

A lien is either general or specific. A general lien (e.g., a judgment lien, debt of a decedent, income tax lien or estate tax lien) applies against a person and all of his property, except property exempted by statute. A specific (or special) lien is an encumbrance against one or more specified parcels of real estate. A mechanic's lien, a property tax lien, a special assessment, or a mortgage applying to three parcels would be a specific lien.

Because an easement appurtenant is a property right, and not a personal right of the holder, it is considered a real property interest rather than a personal property interest. Because it is appurtenant to the dominant estate, it runs with the land and will pass with the dominant estate when the title to that property is conveyed. A dominant tenement need not adjoin the servient tenement at any borders.

A right of way over four parcels has been granted to a fifth parcel. That fifth parcel, the dominant estate, borders one of the servient estates, but not the other four. George's property has an easement for passage of light, air and heat over a hilly parcel that is not adjoining his property.

A less formal right to use another's property is a license. A license is a personal, revocable, nonassignable right to use the property of another. Because it is personal, it could be terminated by death of either party and by sale of the property. It gives a person permission to use land for some limited purpose, but gives no other rights in that land. It is like a noncommercial easement in gross, except that it is revocable and need not be in writing.

A right, given orally, to enter upon the property of another to have a shortcut to a park bordering the property would be a license. If the same right were granted in writing as an irrevocable right, it would be an easement in gross.

Easements may be created by: express grant (in writing). express reservation. eminent domain (or condemnation). dedication. implication. necessity (if the property is landlocked and the owner needs access over adjacent property). prescription (similar to adverse possession, and often referred to as adverse use).

An easement may be terminated by: written release (through a quitclaim deed) from the easement holder. clear and intentional abandonment by the easement holder. merger of the dominant and servient estates under one owner. expiration of a specified time period. the purpose for which the easement was created ceasing to exist. destruction of the servient tenement. prescription (adverse use by the servient estate holder). eminent domain. nonuse (but only if the easement had been acquired by prescription).

An easement is an encumbrance, but it is not a lien, as it does not involve money. Because the easement belongs to someone other than the owner of the land on which it lies, the easement is an encumbrance on the title to that land. As a result, that property would be subject to the easement. Land that is subject to, and therefore encumbered by, the easement is called a servient estate or servient tenement.

Because the easement is irrevocable, the owner of servient tenement cannot terminate the easement, even if the easement causes him great inconvenience. Furthermore, sale of the servient tenement has no effect on the easement. The purchaser of a servient tenement would receive title encumbered by the easement, even if it is not mentioned in the deed. Depending on who has the easement right, an easement may be an easement in gross or an easement appurtenant.

A judgment lien is a general involuntary lien resulting from a judgment in personam (against a person). The judgment is a court order resulting from a lawsuit, to enforce a contractual or legal right to receive a payment of money due, determining that a person is indebted to another and fixing the amount of the indebtedness. Because the lien is against the person, it is a lien against all of that person's property (real and personal), rather than any particular items. A judgment becomes a lien upon any of the judgment debtor's real and personal property in the county in which it is recorded. It remains a lien against that property for the number of years specified by state law, from the time the judgment is rendered.

During the lien period, the judgment debtor cannot convey clear title to his real property, unless the lien is satisfied, as the judgment would remain on the property even if the property were sold. If the debtor can satisfy the judgment before it is enforced, he would obtain from the creditor a satisfaction of judgment and record it to show that the judgment has been paid and is no longer a lien on the debtor's real property. Any time during the lien period and before the judgment is satisfied, the judgment creditor may seek to have the judgment enforced by a process referred to as execution. The creditor would ask the court for a writ of execution, ordering the sheriff to sell the debtor's property to satisfy the judgment. Normally, all of the judgment debtor's personal and real property would be subject to the execution, except for items exempt by law (such as, clothes, household goods, or cars below certain values).

An easement that is the right of an individual or company, held for the benefit of that person or company, is called an easement in gross. An easement in gross is personal property of the easement holder. It attaches to him personally and not to his land. The easement could be noncommercial or commercial.

Fred sold land bordering a park and reserved an irrevocable right to have access to the park through the land he sold. He has a noncommercial easement in gross. His easement is nonassignable and will terminate with his death, unless it is specified otherwise. The same would hold true if a person sold a property that bordered a beach and reserved the right to cross the property to access the beach.

Necessity. An easement by necessity is a type of implied easement, created when justice or necessity make it necessary that an easement be provided for access (ingress and egress) to and from the property.

If Jones divided his land and sold the portion with no access to the street to Smith, Smith or purchasers from Smith could claim an easement by necessity.

TERMINATE AN EASEMENT Prescription (adverse use) by the servient estate holder for a specific number of years.

If the servient estate holder builds over a right of way and the easement holder does nothing about it for a specified number of years, the easement could be terminated.

Involuntary liens are imposed by operation of law, without the owner's consent. These would include a real property tax lien, a mechanic's lien for work done on property, a special assessment for public improvements benefiting property, an income tax lien, an estate tax lien, or a money judgment of a court resulting from a lawsuit.

Involuntary liens may be statutory or equitable. Statutory liens are those authorized by state statute, such as mechanic's liens and property tax liens. Equitable liens are those imposed by courts of equity, often as a result of breach of contract.

Another specific lien is a mechanic's lien (or materialman's lien or construction lien). This lien results from statutory law, as opposed to common law, so it is considered a statutory lien. The law gives those who have furnished work or materials for the improvement of real property the right to place a lien on that property if they are not paid. This allows contractors, subcontractors, laborers, material suppliers and equipment renters to file such liens.

John Smith installs a swimming pool on Mr. Brown's land. He is not paid. He can file a mechanic's lien on that parcel of property.

TERMINATE AN EASEMENT Nonuse of a prescriptive easement for a specified number of years.

Nonuse will result in loss of the easement only if it was originally obtained by prescription. Nonuse would not terminate a deeded easement

These liens do not arise automatically as a result of work done. They must be filed within a specified time period after the work has ceased or materials have been delivered. Once recorded, the construction lien is valid. However, unlike any other private liens, the effective date might not be the date of recording. Depending on state law, the effective date may be the day the contractor filing the lien started work, the day he finished work, or the day the entire job was finished. In some states it is the day anyone on the job started work (so that all contractors working on one job would share the same priority date). In those states, if a construction lien was recorded May 1, but work started January 2, the lien would date back to January 2 and would have priority over any private lien recorded after that date. Lenders may require an inspection of the property before giving building loans to be sure that work has not started before their lien is recorded.

Once a construction lien is recorded, the contractor has a statutory number of months in which to file a suit for foreclosure, if he is not paid. If he does file for foreclosure, the court could order the property sold by the sheriff to satisfy the lien. If the lien is not foreclosed within the time allowed by state law, the property can no longer be used as security for the debt and cannot be foreclosed upon. However, the claimant can file for an unsecured judgment against the property owner himself. If property is encumbered with a construction lien and the contractor is paid, the owner should obtain and record a satisfaction of the lien in order to clear the lien from the records.

There are two types of encumbrances: Some encumbrances affect the physical condition of the property or affect the use of the property. These include deed restrictions (private limitations on the use of land), easements, and encroachments.

Other encumbrances are financial; they involve money. Such encumbrances are called liens. A lien is a charge against property, making that property security for payment of a debt.

The property tax rate is obtained by dividing the budget for a tax district by the total assessed value of all taxable property in the district. This rate may be expressed as an amount per thousand dollars of value or as mills.

The total assessed value of property in a fire district is $80,000,000. The budget for the fire district is $500,000. To determine the tax rate, divide the budget, $500,000 by the assessed value of property, $80,000,000. The tax rate is .00625. This rate can be expressed as 6.25 per thousand dollars of value, or as 6.25 mills. One mill is one-tenth of a cent, or one-one thousandth (.001). So, a mill is the same as saying "per thousand."

The property tax is calculated by adding the tax rates for all the taxing bodies that affect a particular parcel of property, and then multiplying that total by the value of the property.

The total of the various rates for a property equals .01175 ($1.175 per thousand dollars of value or 1.175 mills). The property is worth $300,000 and assessed for tax purposes at $250,000. The tax would be .01175 x $250,000. The property tax is $2,937.50.

With an easement appurtenant there are at least two parcels of land under separate ownership. This easement is a burden on one property (the servient estate) and a benefit or appurtenance to another property (the dominant estate or dominant tenement).

Ward has an easement appurtenant for ingress (a way to get in) and egress (a way to get out) over Taylor's acre, to enable him to reach the public road. Taylor's land is the servient tenement. Ward's land is the dominant tenement. This right runs with the land, so it will pass with the title from Ward to the next owner and successive owners whenever the title is transferred.