REE Ch. 9 - Liens and Easements

easement

An easement is a non-possessory interest in property owned by someone else. The affected area must be defined. One cannot own an easement over one's own property.

Corporation Franchise Tax

Based on the net profit of the business and if it is not paid, it becomes a lien on all the property.

If a lienor agrees to subordinate the junior lien he or she holds, what is the lienor agreeing to do?

Change the lien priority

If a property owner sells the mineral rights to his property, what type of easement does the mining company hold?

Easement by implication

Seller John sold two parcels of land. Parcel B is now land-locked by Parcel A. What type of easement is given to provide road access to Parcel B?

Easement by necessity

What are easements and encroachments types of?

Encumbrances

equitable lien

If court action imposes an involuntary lien, the lien is an equitable lien.

What type of lien is the result of a lawsuit?

Judgment Lien

What are the two most common types of encumbrances?

Liens and easements

Jill was notified that a piece of property she owns has a pending suit. What type of notice has Jill received?

Lis pendens

Which junior lien is last in the rank order of priority?

Mechanic's liens

Logger Sam has been give the right to remove trees from owner Mel's property. What type of appurtenance does Sam hold?

Profit

When a notice of lis pendens has been served,

The property cannot be freely encumbered.

Which type of lien is also called a seller's lien?

Vendor's lien

When does a mortgage lien actually become a lien?

When the borrower signs the mortgage documents and receives the loan money

Estate and Inheritance Tax Liens

arise from taxes owed by a decedent's estate.

A property owner may create a voluntary lien to

borrow money or some other asset secured by a mortgage.

Internal Revenue Service Liens

for failure to pay any taxes relating to income.

Easement Appurtenant

gives a property owner a right of usage to portions of an adjoining property owned by another party.

In New York, how long can a judgement real property lien remain in effect?

10 years

A property owner who is selling her land wants to control how it is used in the future. How might she accomplish her aim?

A deed restriction

Deed Restrictions

A developer may place restrictions on all properties within a recorded subdivision plat. A condition can only be created within a transfer of ownership. A covenant can be created by mutual agreement.

What is a judgment lien and how long does it last?

A judgment lien results from a lawsuit. It attaches to real and personal property as a result of a money judgment issued by a court in favor of a creditor. It lasts for ten years and can be renewed.

How can the priority order of a junior lien be changed?

A lienor can change the priority of a junior lien by voluntarily agreeing to subordinate, or lower, the lien's position in the hierarchy.

Most liens do not convey ownership. What is the one exception to that rule?

A mortgage lien conveys legal title to the lender.

A brick fence straddles the property line of two neighbors. The neighbors agree not to damage it in any way. This is an example of what?

A party wall

What is a corporation franchise tax and on what is it based?

A tax levied on corporations for doing business in the state. This tax is based on the net profit of the business and if it is not paid, it becomes a lien on all the property, both real and personal, that the corporation owns.

Real Property Tax Lien

Ad valorem tax lien against properties as security for payment of the annual property tax. A real property tax lien has priority over all other liens.

Define encroachment and give an example.

An encroachment is the unauthorized, physical intrusion of one owner's real property into that of another. An example would be a driveway extending beyond the lot line onto the neighbor's land.

There are two adjoining properties. An easement allows property A to use the access road that belongs to property B. In this situation, property A is said to be which of the following in relation to property B?

Dominant tenement

What are the two basic types of easement and what is the difference?

Easement appurtenant & Easement in gross An easement appurtenant attaches to the estate and transfers with it unless specifically stated otherwise in the transaction documents, while the easement in gross is a personal right to use and does not attach to the grantor's estate.

Transfer

Easement appurtenant rights and obligations automatically transfer with the property upon transfer of either the dominant or servient estate, whether mentioned in the deed or not.

If a third party has been using a portion of a land owner's land without the owner's permission but with the owner's knowledge for 12 years, what type of easement may the third party obtain from a court order

Easement by prescription

Easements terminate by:

Express release of the right Merger Purposeful abandonment Condemnation Change or cessation of the purpose Destruction Non-use

Which lien has priority over a judgment lien?

Federal income tax liens

What type of lien is placed against any and all real and personal property owned by a debtor?

General

What is a mechanic's lien?

If a property owner fails to pay for work performed or materials supplied, a worker or supplier can file a mechanic's lien to force the sale of the property and collect the debt.

statutory lien

If statutory law imposes an involuntary lien, the lien is a statutory lien.

A property owner has an easement appurtenant on her property. When the property is sold to another party, what will happen to the easement?

It transfers with the property.

Which of the following encumbrances would restrict the land owner's ownership, value, and right to transfer a clear title?

Lien

The date of recording of the lien determines priority for junior liens. Which junior lien is the exception to this prioritizing?

Mechanic's liens

How many liens can be attached to a property at one time?

Multiple

A certain property has the following liens recorded against it: a mortgage lien dating from three years ago; a mechanic's lien dating from two years ago; a real estate tax lien for the current year; and a second mortgage lien dating from the current year. Which lien would take priority?

Real estate tax lien

What type of lien takes priority over all other liens?

Real property tax lien

A mortgage loan places what type of lien on the property?

Specific lien

A real estate tax lien is what type of lien?

Statutory lien

The lien priority of junior liens can be changed by a lienor's agreement to do what?

Subordinate

Mortgage Lien (voluntary)

The borrower gives the lien to the lender as security for the loan on the property.

New York allows brokers to file claims for unpaid leasing commissions as mechanic's liens if

The broker was working under a written commission agreement.

What factors determine lien priority?

The lien's categorization as superior or junior The date the lien was recorded

Two factors primarily determine lien priority:

The lien's categorization as superior or junior. The date the lien was recorded. A junior lien is automatically inferior, or subordinate, to a superior lien. Among junior liens, date of recording determines priority.

A homeowner has hired a contractor to build a room addition. The work has been completed and the contractor has been paid for all work and materials but fails to pay the lumber yard for a load of lumber. What potential problem might the homeowner experience?

The lumber yard may place a mechanic's lien for the amount of the lumber against the homeowner's real property.

What is a common example of an easement by necessity?

The need for access to a property so that it is not landlocked.

Non-Exclusive Use

The servient tenement may use the easement area, provided the use does not unreasonably obstruct the dominant use.

States where mortgage transactions convey legal title to the lender until the mortgage debt is satisfied are called

Title-theory states

What type of lien does an owner create when a property mortgage is negotiated?

Voluntary

How are easements created?

Voluntary action Necessity Prescriptive operation of law Grant or reservation Implication Government power of eminent domain (condemnation)

When might an encroachment become an easement?

When the encroached owner takes no remedial action to have the encroachment removed

When must a mechanic's lien be placed if the contractor is not paid?

Within 4 months of work completion on a single dwelling

What type of action might a creditor take to force the sale of attached property to collect a debt?

Writ of execution

party wall

a common wall shared by two separate structures along a property boundary.

judgment

a lien against the property for ten years.

license

a personal right that a property owner grants to another to use the property for a specific purpose.

easement in gross

a personal right that one party grants to another to use the grantor's real property. The right does not attach to the grantor's estate. Personal - granted for the grantee's lifetime. Commercial - granted to a business entity rather than a private party. The duration is not tied to anyone's lifetime.

specific lien

attaches to a single item of real or personal property, and does not affect other property owned by the debtor.

The county water department has a pipeline running under owner Fred's backyard. This type of easement is most likely a

commercial easement.

lien

does not convey ownership (except mortgage liens), attaches to the property and terminates on payment of the debt and recording of documents. A property may be subject to multiple liens.

Easement by Necessity

granted by a court of law to a property owner because of a circumstance of necessity, most commonly the need for access to a property. There must have been a common grantor of the dominant and servient estates and a reasonable necessity for the easement, not just for convenience.

Lis pendens

is a legal document giving notice of an action that has been filed against a parcel of property.

general lien

one placed against any and all real and personal property owned by a particular debtor.

involuntary lien

one that a legal process places against a property regardless of the owner's desires.

Estate and inheritance tax liens are determined by

probate.

Superior liens

receive first payment from the proceeds of a foreclosure. Special Assessment Lien (Superior/Senior) State Intangible Tax Lien (Inferior/Junior) Vendor's Lien (Inferior/Junior) Municipal Utility Lien (Inferior/Junior)

Mechanic's Liens

secures the costs of labor of real property improvements. The priority dates from the time when the work was begun or completed.

The priority of junior liens are based on

the date of recording.

Priority of a mechanic's lien is based on

the date when the work was started or completed.

Appurtenances Profit

the right to take part of the soil and produce of the land, such as the right to take coal, fruit, or timber.

The two general types of encumbrance

those that affect legal ownership, value and transfer and those that affect the property's use.