Unit 2 - Module 2 - Liens & Encumbrances

Question 1

The conflict between laws of rules

Answer 1

The most restrictive will apply

Question 2

Calculating taxes - national

Answer 2

Assets value / by thousand x mills
rate. Property taxes are based upon the assessed value assessed value only changes reassessment years.

Question 3

Easement

Answer 3

Right or privilege to use the property of another that does not create ownership interest

Question 4

File a complaint with the HOA

Answer 4

A neighbor parked a camper in the front yard

Question 5

Sheriff Sale

Answer 5

Writ of Attachment - Court freezes assets to prevent sale. Write of Execution - The court orders the sale of assets to cover the judgment

Question 6

Restrictive / Protective Covenants

Answer 6

Private use restrictions continue when a property is sold. Limited paint colors, minimum square footage, type of mailbox, etc. Enforces by HOA or through the courts (injunction). May be referred to as CC&R’s - Covenants, conditions, restrictions

Question 7

File a complaint with zoning/planning

Answer 7

The neighbor built something that doesn’t comply with public rules

Question 8

Mechanics Lien

Answer 8

Special treatment for tradesman liens - labor or materials. The lien must be filed within 120 days and a suit to enforce the lien files within 180 days from the last day labor or materials were provided. The lien jumps back to the first-day labor or materials were provided. In NC, a lien agent must be appointed when the project exceeds $30,000

Question 9

Encroachment

Answer 9

Improvement crosses the property boundary that is discovered by a survey.

Question 10

Subdivision Ordinance

Answer 10

Public land use control that protects taxpayers from unplanned growth

Question 11

Real property taxes

Answer 11

The Machinery Act permits cities and counties to charge property taxes on an ad valorem basis (assessed value). Assessed value may change every year, but must change every 8 years (octennial reappraisal). Highest priority lien.

Question 12

License

Answer 12

A revocable right to use the property of another. Not an encumbrance as it can be terminated. Automatically terminates upon death.

Question 13

Lien Priority

Answer 13

Real property taxes and public special assessments ALWAYS have the highest priority. The liens are in order of recordation, except mechanic liens which may jump. Mechanics’ liens are not paid before property taxes and public special assessments.

Question 14

Calculating Taxes - North Carolina

Answer 14

Assessed Value / 100 X Tax Rate. Property taxes are based on the assessed value. Assessed value only changes in reassessment years.

Question 15

Encumbrance

Answer 15

A burden or hindrance that may diminish the value of a real property. Ex: Easements, encroachments, restrictive/protective covenants, deed restrictions, and liens.

Question 16

Lis Pendens

Answer 16

Notice of pending litigation. When a property is sold subject to lis pendens, the new owner risks the loss of the property.

Question 17

Commercial Easment in Gross

Answer 17

Often for utilities, billboards, cell towers, etc., which may be willed, sold, or transferred. Remains an encumbrance even if the grantee declares bankruptcy

Question 18

Personal Easement

Answer 18

Typically for hunting, fishing, or crossing the property of another granted to a person for his/her lifetime. It cannot be transferred (willed or sold). Terminates upon death of the party granted the right, so it is an encumbrance until death

Question 19

Lien

Answer 19

The right to force the sale of a property to recover some or all of the money lent. General liens are against all property of the debtor. Specific liens are against one property.

Question 20

Appurtenant Easement

Answer 20

Creates a dominant and servient estate. The Dominant gets the benefit, and servient gets the burden