Ch. 9 Liens And Easments

Question 1

Encumbrance

Answer 1

Limits owners freehold interests, another’s right to take possession of the property, or prevent full use of rights

NOT the right of possession

Liens and easements the most common form

Question 2

Two types of encumbrances

Answer 2

1. Those that affect legal ownership, value, or transfer
   - liens, deed conditions
2. Those that affect property’s use
   - easements, encroachments, licenses, deed restrictions

Question 3

Lien definition

Answer 3

A creditors claim against personal or real property as a security for debt

If owner defaults then the creditor and force a sale
To pay back debt

Restricts bundle of rights

Attached to property which can have multiple liens

Terminated with payment and signed documents

Question 4

Mortgage lien definition

Answer 4

When the lender holds the total until debt is paid, only accepted in a title-theory state

Question 5

Judgement lien

Answer 5

General // Inferior // Involuntary

Results from a lawsuit against real and/or personal property, issued by court in favor of creditor

Against property for 10 years, can renew for another 10 on real property and 20 on personal property

Writ of execution can be filed by creditor to force sale to collect debt

Question 6

Lis Pendens

Answer 6

General

AKA action pending or pending litigation

Legal document that gives notice of actions against parcel

Property cannot be sold or encumbered and is unmarketable

Usually the start of foreclosure

Question 7

Estate and inheritance tax lien

Answer 7

General

Arises from taxes owed by a decedents estate

Determined through probate, attached to real and personal property

Can sell property to satisfy the tax on inherited property

Question 8

Deceased persons debt

Answer 8

Federal government imposes tax on estate of a person who has passed, imposed when property transfers to the beneficiary

Extension can be granted if they can show the property would sell at a “sacrifice” price - IS Treasury would hold the lien

Question 9

Statutory lien

Answer 9

Imposed by statutory law

Question 10

Equitable lien

Answer 10

Imposed by a court action, involuntary

Question 11

Estate and inheritance tax lien

Answer 11

Arises from taxes owed by a decendent’s estate

Question 12

Corporation franchise tax

Answer 12

Based on the net profit of the business and if not paid becomes lien on property

Question 13

Internal Revenue Service lien

Answer 13

For failure to pay any taxes relating to income

Question 14

Real property tax lien

Answer 14

Has priority over all other liens

As velours tax lien against properties as security for payment of the annual property tax

Question 15

Mortgage lien

Answer 15

Borrower gives lien to the lenders as security for the loan on the property

Question 16

Mechanic’s lien

Answer 16

Secures costs of labor of real property improvements

Can be claimed by subcontractor

Priority by date of work beginning or completed

Question 17

The 2 factors that determine lien priority

Answer 17

1. Superior or inferior

1. Date lien was recorded

Question 18

Subordination

Answer 18

When a lienor agrees to lower position in the junior lien hierarchy

Question 19

Deed restriction

Answer 19

A limitation on a burgers use of property, stipulated in the deed

Single property or subdivision plat

Question 20

Deed restriction condition

Answer 20

Can only be created with a transfer of ownership

Question 21

Deed restriction Covenant

Answer 21

Created by mutual agreement

Question 22

Easement

Answer 22

A non-possessesory interest in real property that gives the holder rights to use portions of a property

Question 23

The three Easement characteristics

Answer 23

1. One owner, one non-owner
2. Pertains to a specific physical barrier within property boundaries
3. Either affirmative of negative

Question 24

Easement appurtenant

Answer 24

Gives property owner right of usage to portions of adjoining property owned by another

Transfers and is non-exclusive

Dominant tenement/estate enjoys usage

Serving estate is the property with the physical element

Question 25

Appurtenant

Answer 25

“Attaching to”, all rights, privileges, improvements that belong to and transfer with a property Not necessarily for art of actual Property (easements/air and water rights, subsurface rights, profit, license)

Question 26

Easement by necessity or implied grant

Answer 26

Granted by a court of law, must have a common grantor, must have reasonable necessity Most commonly: need to access a landlocked property

Question 27

Easement for light and air

Answer 27

Prevents cutting off property owners light and air such as a view Could attempt to purchase this easement from another property to ensure unblocked view

Question 28

Party wall easement

Answer 28

Evenly shared common wall Can also be party fence/driveway/sidewalk

Question 29

Easement in gross

Answer 29

Personal right that one party grants another tinier the grantors real property Does NOT attaché to estate Personal- granted for a grantees lifetime Commercial- to an entity and not tied to a lifetime

Question 30

6 ways to create an easement | V, N, P, G, I, C

Answer 30

``` Voluntary action Necessity Prescription (10 years) Grant Implication Condemnation ```

Question 31

Easements are terminated by

Answer 31

``` Espresso release of the right Merger Purposeful abandonment Condemnation Chance or cessation of purpose Destruction Non-use ```

Question 32

Easement by prescription

Answer 32

Use without permission, owner presumed to have knows, over the prescribed number of 10 years

Question 33

Easement by grant

Answer 33

Express written agreement by owners, stipulated in a grant

Question 34

Easement by implication

Answer 34

A severance of parcels denoted certain rights Ex: sell mineral rights, then mining company has right to ingress/egress and use land for specific purpose

Question 35

Easement by condemnation

Answer 35

Created by a government entity via eminent domain, condemns portion of Property for the greater good Ex: highways, utility, roadways, sidewalks

Question 36

Profit

Answer 36

The right to remove part of soil/produce from land, created by written grant or prescription

Question 37

License

Answer 37

Personal right granted by Owner to anther for specific use of property Cease on death or sale of property revocable at anytime Can be granted orally

Question 38

Encroachment

Answer 38

The unauthorized, physical intrusion of one owners real property into another’s Ex: tree branch in air space may diminish property value Owner may sue for removal or compensation of damages If no action than may be an easement by prescription