Real Estate Chapter 5 (Encumbrances)
* Declaration of Restrictions * CC&Rs
(Covenants, Conditions, and Restrictions) Normally recorded then referenced in the deeds that convey the lots in a subdivision.
Types of Non-Financial Encumbrances
* Easements * Profits * Private Restrictions / Deed Restrictions / Restrictive Covenants
Ways to Create an Easement
* Express Grant * Express Reservation * Necessity * Implication * Prescription * Dedication * Condemnation
Other Tax Liens
* Federal Income Tax * Estate or inheritance taxes * Gift Taxes These are mostly involuntary, GENERAL liens
Lien Priority
* It is generally the date that the lien was RECORDED that prioritizes which liens are paid first, NOT the date that the lien was created. * Property Tax Liens and Special Assessment Liens are rewarded FIRST * Mechanic's Liens are prioritized by the date they attach (which may before they are recorded), not when they are recorded
Types of Voluntary Liens
* Mortgage * Deed of Trust
Types of Financial Encumbrances (Liens)
* Mortgage * Deeds of Trust * Mechanic's Lien * Judgment Lien * Attachment Lien * Property Tax Lien * Special Assessments * Other Tax Liens * Miscellaneous Liens
Prescription (Easement)
* Open and notorious * Hostile * Reasonably Continuous -- Does not have to exclude use by the landowner Can be guarded against by recording a Notice of Consent for the particular purpose and then later revoking it.
Ways to Terminate and Easment
* Release * Merger * Failure of Purpose * Abandonment * Prescription
Types of Involuntary Liens
* Tax Liens * Judgment Liens
* Secured Creditor * Lienholder * Lienor
A creditor who has a lien against (a security interest in) a debtor's property
Ejectment
A judicial action that orders the removal of an encroachment
Express Reservation
A landowner who conveys a portion of land may reserve an easement in that parcel to benefit the parcel that has been retained. Must be put into writing
Attachment Lien
A lien that is attached to a property once a lawsuit is filed if there is a thought that the defendant will sell the property prior to a judgment being issued.
Prescription (termination of Easement)
A prescriptive easement can be terminated if the servient tenant prevents the dominant tenant from using the easement for the period of time required by state law that created the prescription
Homestead exemption
A specific amount of money that will be paid to the homeowner upon foreclosure of his home before money is paid to lien holders
Nuisance
An activity or condition on a neighboring property that interferes with the property owner's reasonable use or enjoyment of his own property e.g. Odors, noises, and interference with communication signals
Trespass (encroachment)
An encroachment can be considered a trespass if it violates a property owner's rights of posession
Trustee
An independent third part in a trust deed, most often an attorney or a title insurance company
Judgment Lien
An involuntary, general lien that can be claimed by a person who has won a money judgement against another party (losing party / judgement debtor) * Ordinarily only attached to properties in the same county where the judgment was issued. * Normally attaches to any property that is acquired by debtor during the lien period
Property Tax Liens
An involuntary, specific lien that attaches to a property once a tax is levied until the tax is paid. * This has the highest priority to get paid
Special Assessments
An involuntary, specific lien that attaches to property when certain properties in a county (but not all) receive benefit from a special project such as paving or sewer lines.
Writ of Attachment
An order that directs the sheriff to place an attachment lien on a defendants property that will satisfy the judgment that the plaintiff is seeking
Necessity (Easement)
Arises when purchased land is locked in by private land and has no access to a public road. An easement is normally created to the closest public road. Some states this is automatic, and others requires a court order.
Specific Lien
Attaches only to a particular piece of property (e.g. mortgage)
Easement in Gross
Benefits a person (a dominant tenant) rather than a parcel of land. Therefore there is not dominant tenement, only a servient tenement. * This easement also "follows the land", which means that if the servient tenement is sold, the dominant tenant still has the right to the easement Used commerically and commonly with utility companies that allow its employees to enter property and install and service utility lines
Easement Appurtenant
Burdens one parcel of land for the benefit of another parcel of land (e.g. An easement that gives one property owner the right to cross another property owner's land in order to access his own land -- driveway easement) * These are automatically transferred with both parcels of land if sold, and do not have to be mentioned in the deed in order to be binding on future owners. Party wall easement a special case of an easement appurtenant
Miscellaneous Liens
Depend on the state, but may include: * Child support * Alimony * Bail Bonds * Condominium and Homeowner's Association assessments
License (vs. Easement)
Gives someone permission to use another person's land. * Normally spoken permission rather than in writing * Can be revoked at any time (unlike an easement)
Condemnation (Easement)
Government may use power of eminent domain to allow the use of private property for the use of the public (e.g. construction of a road). Can also be exercised by some private utility companies
Deed of Trust (Trust Deed)
Has 3 parties, rather than 2 (like in a mortgage) * Have a different foreclosure process than a mortgage
Release (termination of Easement)
Holder of the easement renounces his rights in the servient tenement. Done in a written document (normally a quitclaim deed from the easement holder to the owner of the servient tenement)
Merger (termination of Easement)
If the dominant and servient tenement comes to be owned by the same person, the easement is no longer necessary, and is therefore terminated
Failure of Purpose (termination of Easement)
If the purpose for which the easement was created no longer exists, then the easement terminates. e.g. Landlocked owner buys an adjoining parcel that has access to a public roadway.
Lis Pendens
Latin for "action pending" A document that gives notice of a lawsuit that may affect title to real property. It is not a lien, but it is recorded and provides constructive notice of the pending lawsuit to anyone who purchases the identified property, and therefore is bound by any judgment that results from the suit, even though that person is not a party to the lawsuit
Encumbrance
Nonpossessory right or interest in real property held by someone other than the property owner
General Lien
One that attaches to ALL of a debtor's property (e.g. judgement lien)
Dedication (Easement)
Private landowner may grant an easement to the public (e.g. sidewalk). May be expressed or implied
Covenant vs. Condition
Private restrictions can be covenants or conditions. Covenant - a promise to do or not do something. Violator can be sued, leading to an injunction or payment of damages Condition - can have more serious consequences, if condition in the deed makes title conditional giving him fee simple defeasible rather than fee simple absolute). BREACH OF CONDITION CAN CAUSE FORFITURE OF TITLE!
Homestead Laws
Provide protection to owner-occupied dwellings against a certain dollar amount against judgment liens and attachment liens. Normally does not protect against child support or alimony.
* Private Restrictions * Deed Restrictions * Restrictive Covenants
Restrictions on a property's use that were imposed by a previous owner. These can "run with the land" and be binding to all future owner's of the property. * May be imposed in a deed or by a written agreement with a neighbor Often used in subdivisions (see CC&Rs)
Materialman's Lien
Similar to a mechanic's lien, but it is claimed by someone who has provided MATERIALS
Encroachments
Something that intrudes on one person's land from another's without authorization
Trustor
The borrower in a trust deed
Mortgagee
The creditor (lender)
Abandonment (termination of Easement)
The easement holder abandons it by some type of act that indicates an intent to abandon it. e.g. A dominant tenant builds a fence that blocks further use of the easement used for ingress and egress * Non-use is NOT considered abandonment (except in some states that a certain time of non-use will terminate a prescriptive easement)
Beneficiary
The lender/creditor in a trust deed
Writ of Execution
The order issued by a court to force the sale of a property in a foreclosure
Attractive Nuisance doctine
The owner of property with a feature that is dangerous and attractive to children (e.g. unfenced swimming pool) may be held liable for harm resulting from failure to keep out trespassing children
Dominant Tenant
The owner of the dominant tenement
Servient Tenant
The owner of the servient tenement
Dominant Tenement
The parcel with the benefit in an easement appurtenant
Servient Tenement
The parcel with the burden in an easement appurtenant
Attach
The process of a lien becoming legally effective, it is said to attach to the property
Mortgagor
The property owner
Express Grant
The property owner grants someone else the right to use the property. Grant must be in writing and comply with all the requirements for conveying interest in land
Profit
The right to take something away from someone's land, rather than just a right to use it. e.g. Right to take away timber, gravel, etc. Must be created in writing or by prescription.
Easement
The right to use another person's land for a particular purpose. It is a nonpossessory interest in the land (no title or right of possession)
Perfecting (a lien)
When a claim of lien is filed, it is said to have been perfected
Foreclosure
When a lien holder forces the property to be in order to collect the debt out of the sale proceeds
Mechanic's Lien (Construction Lien)
When a person who has provided LABOR to a particular property places a lien on it in order to get payment for work performed. It is a specific, involuntary lien
Implication (Easement)
When property is divided and part of it is transferred to another owner, and the conveyance forgot (did not) include an express grant/reservation. Has two requirements: 1.) Easement must be reasonably necessary for enjoyment of the property 2.) There must have been apparent prior use Similar (in some states it is the same) to a necessity easement