Lesson 2: Limitations on Ownership

Question 1

Condemnation

Answer 1

Exercising the power of the government to take private property for public use.

Question 2

Eminent domain

Answer 2

The right of government, both state and federal, to take private property for a necessary public use.

Question 3

Nonconforming use

Answer 3

A permitted use that was lawfully established and maintained but that no longer conforms to the current use regulations because of a change in the zoning.

Question 4

Police power

Answer 4

The constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support the public health, safety, morals and general welfare.

Question 5

Zoning

Answer 5

The regulations of structures and uses of property within designated districts or zones.

Question 6

What kind of limitations on ownership are there?

Answer 6

Limitations, then, can be both private and governmental.

Question 7

There are two types of encumbrances:

Answer 7

1) those that affect title and entail some amount of money, such as liens, attachments, and judgments, and (2) those that affect use and entail no money, such as encroachments and easements.

Question 8

Lien

Answer 8

A lien is a claim that a person or entity (lienor) has against the property of another (lienee) to secure payment of a debt.

Question 9

Types of liens:

Answer 9

Voluntary or involuntary
Specific or general
Equitable or statutory

Question 10

Voluntary and involuntary lien

Answer 10

A voluntary lien is created by the owner when he offers the property as security for repayment of money borrowed. An involuntary lien is created by operation of the law, such as tax or mechanic’s liens.

Question 11

Specific and general lien

Answer 11

A lien may be specific, applying only to a particular property, such as a mortgaged house, or general, applying to all the lienee’s property, personal and real.

Question 12

Equitable and statutory lien

Answer 12

A lien may be equitable, based on fairness, or statutory , based law(statute).

Question 13

The priority of a lien is determined…

Answer 13

… by the time and date of recording, except for mechanic’s and tax liens.

Question 14

Vendee’s Lien

Answer 14

When a seller (vendor) refuses to sell, as required by the sales contract, the purchaser (vendee) has an equitable lien against the property for the return of all money paid under the terms of the contract (earnest money).

Question 15

Vendor’s Lien

Answer 15

When a seller (vendor) does not receive all the money due from a purchaser (vendee), the seller has an equitable, specific lien against the property for the unpaid balance.

Question 16

Mortgages and trust deeds

Answer 16

Mortgages and trust deeds, are created when a property owner borrows money and executes a mortgage or trust deed on the property as security for repayment of the loan.

Question 17

There are three kinds of tax liens:

Answer 17

There are three kinds of tax liens–real property tax liens, state tax liens, and federal tax liens.

Question 18

Real Property Tax Liens

Answer 18

Property taxes, special assessments, and water and sewer charges can be levied against real property, usually by cities or counties.

Question 19

The priority of real property tax liens themselves is:

Answer 19

(1) Ad Valorem or general property taxes, (2) special assessments, and (3) water and sewer costs.

Question 20

Federal Tax Liens

Answer 20

Federal tax liens are general liens which result from non- payment of income taxes, gift taxes, and inheritance, or estate taxes.

Question 21

Gift tax liens:

Answer 21

Those on property received as a gift, are subordinate to prior liens on the property and remain in place for ten years.

Question 22

For how long do the federal inheritance or estate tax liens last?

Answer 22

ten years

Question 23

For how long do income tax liens last?

Answer 23

six years

Question 24

For how long do inheritance tax liens last?

Answer 24

fifteen years

Question 25

Mechanic's Liens

Answer 25

Mechanics, material suppliers, contractors, sub- contractors, builders, and anyone else who has furnished labor or materials for the construction, alteration, or repair of any improvement upon the land are given a lien on the property to insure payment.

Question 26

What are suppliers and laborers called in relation to the mechanic's liens?

Answer 26

In general, suppliers are called materialmen and laborers are called mechanics.

Question 27

When do Mechanic's liens take effect?

Answer 27

Mechanic's liens take effect when materials are first delivered for materialmen and when work first begins for mechanics.

Question 28

Mechanic's liens are inchoate, or...

Answer 28

incomplete until the work is done.

Question 29

What does a lien statement do?

Answer 29

To preserve the lien a lien statement must be | filed in the county. This is called perfecting the lien.

Question 30

What is a notice of intent in relation to Mechanic's liens?

Answer 30

In Colorado a notice of intent to file a lien statement must be served (personally or by certified mail) upon the owner of the property and the principal contractor or their agents at least ten days before recording the lien statement.

Question 31

What is the order of priority with Mechanic's liens?

Answer 31

The order of priority is as follows: (1) the lien(s) of mechanics (labors) working by the day or piece, (2) the lien(s) of all other sub-contractors and of all materialmen whose claims are either entirely or principally for materials, (3) the lien(s) of all other principal contractors.

Question 32

Time to file a mechanic's lien for class one lienors?

Answer 32

Lienors in class one above must file within two months after completion of the work.

Question 33

Time to file a mechanic's lien for class two or three lienors?

Answer 33

Lienors in classes two and three above must file within four months after completion of the work.

Question 34

The expiration of mechanic's lien?

Answer 34

No mechanic's lien shall last longer than six months after materials are furnished or work is completed.

Question 35

A lien waiver

Answer 35

Homeowners may file a lien waiver signed by the general contractor upon payment to the general contractor to prevent a subcontractor not paid by the general contractor from filing a mechanic's lien on the property.

Question 36

Judgement liens

Answer 36

Judgments are court actions. They may impose a general lien against the defendant's property. They stem from lawsuits that award money damages.

Question 37

How long do judgement liens last?

Answer 37

six years

Question 38

Writ of Execution

Answer 38

Judgement liens may be enforced with a court issued Writ of Execution, which directs the county's sheriff to seize and sell a sufficient amount of the debtor's property to pay the debt and sale expenses.

Question 39

Attachments

Answer 39

With an attachment, the property of a defendant in a lawsuit for money damages is seized and held for satisfaction of a judgment which the plaintiff hopes to obtain.

Question 40

Writ of Attachment

Answer 40

The court orders a Writ of Attachment, which is recorded by the county sheriff. With an attachment the court freezes the assets of the defendant, preventing them from being sold until the litigation is resolved.

Question 41

Lis Pendens

Answer 41

A notice of lis pendens informs the public that legal action is pending against a property.

Question 42

Fraudulent Liens

Answer 42

Liens filed for false or groundless claims can tie up a property being sold and result in legal expenses before being found invalid.

Question 43

Easements

Answer 43

An easement is the right to enter and use the land of another for a specific purpose. The use must be consistent with the general use.

Question 44

An easement by reservation

Answer 44

A second way to create an easement is for an owner to withhold land in the deed when selling the property.

Question 45

An easement by condemnation.

Answer 45

A utility company, for example, might obtain the right to purchase someone's land to run gas pipes across.

Question 46

An easement by necessity

Answer 46

Also called by implication of law. For example, a parcel of land without access to a road might be sold to someone. To provide access to the landlocked parcel, the courts will establish an easement over someone else's land, probably the seller's, because the buyer cannot be landlocked by the seller.

Question 47

An easement by prescription

Answer 47

Yet another way of creating an easement even without a written document is by continual, adverse, open use for a legally prescribed period of time. This is called an easement by prescription. That is, if someone continually, adversely and openly acts as if he has an easement long enough he legally will.

Question 48

An easement by a plat map

Answer 48

Easements can be created by reference to a plat map. When a developer subdivides, he usually plans easements for utilities and roads.

Question 49

An easement by estoppel

Answer 49

An easement by estoppel occurs when someone grants an easement to someone else, and that someone else acts in good faith and perhaps spends money that would be lost if the easement were revoked. If the promissor attempts to revoke the easement, he would be stopped because of the bad faith shown by attempting to take back the easement after his promise had been relied on.

Question 50

An easement appurtenant

Answer 50

An easement appurtenant is a right in one piece of land created to benefit another piece of land.

Question 51

Dominant vs. servient estate in relation to easements

Answer 51

The land benefited by the easement is called the dominant estate; the land burdened by the easement is called the servient estate.

Question 52

Appurtenant

Answer 52

belonging

Question 53

A right-of-way

Answer 53

The right to travel over a portion of another's land is called a right-of-way.

Question 54

An easement in gross

Answer 54

An easement in gross differs from an easement appurtenant in that there is only a servient estate-there is no dominant estate. Electric, telephone, and gas line easements are easements in gross

Question 55

A solar easement

Answer 55

A solar easement is the right to get sunlight across the land of another for a solar energy system.

Question 56

Termination of an easement by release:

Answer 56

By a quit claim deed or some kind of written release given by the easement owner to the owner of the servant estate.

Question 57

Termination of an easement by merger:

Answer 57

by destruction of the servient estate or by merger of the dominant and servient estates.

Question 58

Termination of an easement by failure of purpose:

Answer 58

When the reason for the easement no longer exists--that is, it is terminated for failure of purpose.

Question 59

Termination of an easement by abandonment:

Answer 59

Proof must be provided that abandonment was intentional before the easement can be terminated, and simple nonuse is not proof enough.

Question 60

Termination of an easement by eminent domain or adverse possession:

Answer 60

self-explanatory, isn't it? (:

Question 61

Termination of an easement by prescription:

Answer 61

When the servient tenant openly and continuously prevents the use of the easement.

Question 62

An encroachment

Answer 62

An encroachment is the unauthorized intrusion of a building or other kind of real property on to the property of another.

Question 63

Ejectment

Answer 63

A legal action to oust an encroacher or trespasser is an ejectment.

Question 64

Deed restrictions or deed covenants

Answer 64

Deed restrictions or deed covenants are agreements limiting the use of land. A covenant is a promise not to do something that is restricted.

Question 65

injunction

Answer 65

a civil court action (court injunction)

Question 66

Conditions

Answer 66

Conditions, on the other hand, are stronger than covenants or restrictions. They are occurrences upon which a property might be obtained or lost.

Question 67

A lease

Answer 67

A lease gives the tenant (lessee) the right to possess and use someone else's property for a period of time.

Question 68

A reversion

Answer 68

A lease gives the tenant (lessee) the right to possess and use someone else's property for a period of time. During that time the lessor (owner or landlord) has a reversion enabling him to retake possession when the lease expires.

Question 69

Consideration in a lease

Answer 69

the lessee's payment or promise to pay rent and the lessor's delivery or promise to deliver possession of the property.

Question 70

Ground lease

Answer 70

A ground lease is a tenancy for years for land alone. Such a lease is usually for a long period of time, possibly for as long as 99 years, and usually calls for the construction of a building on the land and states the disposition of the building when the lease ends. A ground lease, then, separates the ownership of the land from the ownership of the building.

Question 71

Gross lease

Answer 71

A gross lease calls for a fixed lease payment in which the lessee (renter) pays a rent, and the lessor (landlord) pays taxes, insurance, and the other costs of ownership. A gross lease is also called a fixed or flat lease. Most home and apartment leases are gross leases.

Question 72

Net lease

Answer 72

With a true net lease, the tenant pays thenexpenses, just as if he were the owner. Sometimes we hear of a net lease; or a net, net lease; or a net, net, net lease. The more nets the more the tenant pays for.

Question 73

Step-Up Lease

Answer 73

This type of lease provides for predetermined rent increases at fixed intervals.

Question 74

Graduated lease

Answer 74

A lease in which the payments increase at set intervals based on an appraisal or the activity of some reasonably comparable indicator, such as inflation or increases in the value of land.

Question 75

Percentage Lease

Answer 75

Such a lease, usually associated with commercial establishments (retail stores, most specifically), is one in which rent is based on a percentage of the tenant's gross sales.

Question 76

Tenant at will vs tenant at sufferance

Answer 76

When a tenant holds over with the consent of thelandlord,thattenantisatenantatwill. Ifthe landlord gives no such indication, the tenant is a tenant at sufferance and no notice to quit is required.

Question 77

Actual vs constructive eviction

Answer 77

Eviction may be actual or constructive. Actual eviction is when the tenant is removed. Constructive eviction is when the premises have been allowed to deteriorate to the point that the tenant cannot use the premises for the purpose intended.

Question 78

Assignment vs a sublease

Answer 78

When a tenant gives his entire right in the lease to another it is an assignment; when a tenant retains some right(s) in the lease it is a sublease.

Question 79

Sandwich lease

Answer 79

When the original lessee assigns or subleases, he has a sandwich lease--he is a middle person; he is the lessee to one person (the landlord) and the lessor to another (the sublessee).

Question 80

Demise

Answer 80

To convey an estate or interest in real property, as in a lease, is to demise the property.

Question 81

A license

Answer 81

A license is a non assignable personal privilege to use land. It is neither an estate in land nor an encumbrance against land. We think of hunting and fishing licenses.

Question 82

The right to tax...

Answer 82

... allows the government to take real property on which taxes are owed and to sell that property to collect overdue taxes.

Question 83

There are two categories of real property taxes :

Answer 83

general taxes (also called ad valorem taxes) and special assessments .

Question 84

ad valorem taxes

Answer 84

General property taxes are called ad valorem taxes because they are levied according to the value of the property.