Rights and Interests in Land Flashcards
(215 cards)
1
Q
Real property taxes are computed based on the property’s:
A
assessed value. Assessed value x Tax value = Property tax
2
Q
The process by which government exercises its power to take private lands for public use is:
A
condemnation. The process is condemnation. The power is eminent domain.
3
Q
What is not a governmental power:
A
deed restrictions are private restrictions on the use or sale of a property.
4
Q
Under police power, building codes would determine:
A
the types of plumbing and electrical materials allowed. The height and structure requirements and methods of construction to be used are also determined by b building codes. Zoning codes determine acceptable land uses.
5
Q
The term estate refers to:
A
the collection or bundle of rights held by someone who has a possessory interest in a piece of real estate.
6
Q
When an individual or entity holds a claim against another’s property, it is a:
A
lien which secures payment of indebtedness.
7
Q
Real property rights are those of:
A
land, government, and ownership. Not deed rights.
8
Q
What would be used by a purchaser to reveal encroachments?
A
A survey would be used to discover zoning setback violations or encroachments.
9
Q
Which lien has first priority?
A
Government liens for property taxes and special assessments always have top priority.
10
Q
The grantor of a life estate may retain:
A
reversionary rights. Ownership in fee simple reverts to the grantor at the end of the life estate.
11
Q
If Anna grants a life estate to Ben and specifies that title will be transferred to Carl upon the death of Ben, who has what interests?
A
Ben is the life tenant. Ben owns the property. Carl is the remainderman. Ann, the grantor, has a reversionary interest.
12
Q
The holder of a fee estate:
A
has the right to sell, will, or give the property away, which is known as ALIENATION.
13
Q
A married couple has been granted the right to occupy and use a 10 acre tract of land forever. What kind of estate does the couple hold?
A
A fee simple estate - the right to occupy and use land forever.
14
Q
In most life estates, the life tenant may:
A
sell the property, lease the property, improve the property. They may not be willed because most life estates terminate upon death of the life tenant. One exception: a life estate per auto vie, in which the life of someone other than the life tenant is used as the measuring life.
15
Q
Encumbrances are:
A
Liens, easements and restrictive covenants are encumbrances.
16
Q
An estate that lasts only so long as a specified condition is met is known as a:
A
A qualified fee estate (defeasible estate) - a form of ownership that can be lost by violating a condition in the end granting the ownership interest.
17
Q
The right of the government to establish zoning and land use laws is an exercise of:
A
Police power - the government’s right to enact and enforce laws to protect the health, safety, morals, and general welfare of the public (including land use laws).
18
Q
The grantor of a qualified fee has set the requirement that the property “must be used only as a school”; this requirement is known as a:
A
Deed condition - used to create the requirements of qualified fee estates.
19
Q
A leasehold estate with a definite expiration date that does NOT require notice by either party is:
A
an estate for years - has a specific termination date.
20
Q
Which governmental right is exercised when the state acquires private property through condemnation and makes a payment of just compensation?
A
Power of eminent domain.
21
Q
What is the difference between a freehold and leasehold estate?
A
Freehold estates are of indefinite duration. Leaseholds will terminate.
22
Q
A holder/owner of a life estate (life tenant):
A
owns the property and has title and possession of the property. The remainder estate belongs to the party who will obtain title upon death of the measuring life.
23
Q
An irrevocable right to use the lands of another is called:
A
an easement.
24
Q
A holder of a freehold estate has rights of:
A
ownership.
25
What is not an estate of ownership?
An estate for years - is a right of possession, not ownership. Life tenancy, like all other freehold estates, is an estate of ownership.
26
What is not an interest in land?
Granting someone permission to use one's land creates a license, which is not an interest in land.
27
Which estate does NOT terminate on the death of the holder of the estate?
Estate for years - a contract and terminates on the date specified in the lease, not upon death of the lessor or lessee.
28
The property Sam bought 30 years ago had an appurtenant easement for access. Twenty years ago the county built a new road and Sam has not used the easement since that time. When Sam sells the property, the easement:
remains in place and will transfer with the property. Easements can be terminated by release, merger, or abandonment. If an easement is abandoned and the property owner wants to have it returned, typically the servant property must prove abandonment in court.
29
Protection on a primary home against certain creditors is known as:
homestead rights - protect a primary home from foreclosure by certain lien holders.
30
Revocable, nonexclusive permission to use property is called:
a license - can be revoked and it typically gives nonexclusive permission to use a property.
31
General real property taxes are called:
ad valorem taxes - because the amount of the tax is based on the value of the property.
32
If property is abandoned or person dies intestate and without heirs, the property will escheat to the state. - PETE memory aid.
```
Escheat is the governments reversionary right when a property is abandoned.
P - police power
E - eminent domain
T - taxation
E - escheat
```
33
What is an estate?
An estate is an interest in property. There are two types: Freehold estates (estates of ownership) - indefinite duration ; Leasehold estates (estates of possession) - may be terminated.
Three freehold estates are: fee simple absolute; fee simple defeasible (qualified fee) ; life estate.
34
What are the three freehold estates?
fee simple absolute; fee simple defeasible (qualified fee) ; life estate.
35
What is the Fee simple absolute estate?
The greatest, most complete form of ownership.
36
What is the Fee simple defeasible ownership?
a "qualified" fee because this type of estate always has a condition that must be met. If the deed condition is broken, the estate may revert to the grantor or the grantor's heirs.
37
What is a life estate?
An estate measured by someone's lifetime. The person who will receive the property when the life estate ends holds a reversionary or remainder interest. If no remainder man is named, the estate reverts to the grantor or the grantor's heirs.
38
What is a leasehold estate?
An estate of possession and is a non ownership interest in property. The lessor (landlord) accepts rent from the lessee (tenant) in exchange for possession.
There are four types of leasehold estates:
Estate for years
Estate from period to period
Estate at will
Estate at Sufferance.
39
What are the four types of leasehold estates?
Estate (tenancy) for years - specific termination date. No advanced notice required. Specified beginning and end date. Tenant expected to vacate without notice. "Binding contract". Death of landlord or tenant does not terminate the contract. Sale of property does not terminate. Purchaser of property can buy subject to existing lease.
Estate from period to period (periodic estate tenancy) - renews automatically for set period upon payment of rent. Terminated by advance notice of either party.
Estate (tenancy) at will - Indefinite duration - tenant occupies at landlord's discretion. No fixed term. Terminated by notice, death, or sale of property.
Estate (tenancy) at sufferance - Holdover tenant after legal tenancy expires (lowest estate). Owner may evict tenant or accept rent. If rent is accepted from tenant at sufferance estate at sufferance becomes a periodic estate. Created when a tenant remains in possession at the end of agreed lease term without consent of landlord. Tenant gives notice to vacate but stays on after. "Three day notice to pay or quit" - first step in the eviction notice. The landlord files "unlawful detainer" - legal name for eviction.
40
What is an encumbrance?
```
An encumbrance is any right, claim, or interest in property held by someone other than the property owner or the one who has legal right of possession.
There are four kinds of encumbrances:
Easements
Encroachments
Deed restrictions
Property liens
```
41
What are the four encumbrances.
Easements
Encroachments
Deed restrictions
Property liens
42
What are easements?
Easements are the right to use the lands of another for a specific purpose.
Appurtenant easement - has a dominant tenement (landlocked property owner) and a servient tenement (burdened by easement). Transfers with the land. doesn't increase dominant estate's size, but may increase in value.
Easement in gross - has no dominant tenement, only servient. Commercial easement held by company, government, or person. ie., utility easement.
Easement by necessity - granted by the courts to a private owner to precent creation of landlocked property. It is only granted if there is no other access. This easement is only available to private owners and not public utilities, railroads, or governments.
Easement by prescription (by implication) - Owner knows for a long time and doesn't prevent. If they did it for 5 years it is ok. This is the only easement that can be terminated by non-use after 5 years.
43
Three ways easements can be terminated?
Merger - holder of dominant interest acquires the fervent property or vice versa.
Release - holder of dominant interest releases rights to servient owner (via quitclaim deed). Unless the easement is released, it will transfer with the deed.
Abandonment - not automatic. It must be proven in court. Easement is lost if it is unused for 5 years. Only applies to "easement by prescription"
44
What are Deed restrictions?
Privately created limitations on land use. They apply to present and future owners. I.e. restrictive covenants imposed on all lots within a subdivision by the original developer. Like the Homeowners Association.
Common deed restrictions are CC&R's
Covenance - a fine if broken
Conditions - a fine if broken
Restrictions - goals is to maintain property values.
Need 2/3 vote of HOA to change restrictions.
45
What is a lien?
A lien is a financial encumbrance against property. Dollar burden attached to property. Money claim. May be specific or general.
Specific liens - against a specific property. Most common are government real property tax liens, mechanic's liens (construction liens), and mortgages.
Judgement and IRS liens are general liens against all of a person's assets.
46
What is a voluntary lien?
One agreed to by property owner (mortgage).
47
Involuntary lien?
One imposed without agreement of property owner (government tax, mechanics, judgement lien)
Tax lien has priority regardless of date of records.
48
Specific lien?
Applies only to identified property (mortgage on specific parcel of real estate).
49
General lien?
Applies to all property the debtor owns, such as a judgement.
50
What is an encroachment?
An unauthorized use of someone else's property, typically physical object intruding onto neighboring property. Most encroachments are unintentional. A survey would reveal an encroachment.
51
What is a license?
Similar to an easement - grants permission to enter another's property for a specific purpose. A license does not create an interest in property and is not an encumbrance against the title. A license can be revoked at any time.
52
What is an escheat?
The government's reversionary right when a property is abandoned. It is exercised when owner dies intestate (no will) and without heirs. Government has 2 years to seek heirs (due diligence). They can hold property for 3 years.
53
What is a homestead exemption?
Created by state statue to protect a primary residence against creditors. It protects against forced sale on judgments and debits for personal loans and credit cards.
Typically does not protect against mortgage liens, property tax liens, or mechanics' liens that are attached to the real property.
Amount of protection differs in value of homestead rights and who may receive them.
54
Homestead value protection amount:
Single person: $75,000 of equity is protected
Family unit: $100,000 of equity is protected
Persons age 65 or older, the disabled, or persons age 55 or older with low income: $175,000 of equity is protected.
Homeowners equity is: Market value of home - any liens and encumbrances.
55
Homeowners equity is =
Market value of home - any liens and encumbrances.
56
Ingress is:
the right to enter a property (easement)
57
Egress is:
the right to exit a property (easement)
58
Two ways the government can acquire privately held land:
escheat and eminent domain
59
Public control of land use by the government is known as:
Police power
60
A right to use or enjoy that one person has in the lands of another for a specific purpose is an:
easement.
Dominant tenement - benefits
Servient tenement - burdened
Easement in gross - only a servient property burdened by utility company.
61
A tenants right to possess real estate for the term of a lease is a:
Leasehold estate - aka, "Less than freehold estate" (Chattel real - real property interest (LEASED)
(Chattel - tangible, moveable personal property (OWNED)
62
A tree limb that overhands into a neighbor's yard is an example of an
encroachment.
63
What is not revocable where as a license is?
An easement.
64
A claim that one person has against the land of another to secure payment of a debt is a:
lien (payment, cash, money).
| Liens can be specific or general, voluntary or involuntary.
65
A person who has not been paid for work performed on real property may record a:
Mechanics' lien. Can be placed by licensed contractors, workers, or suppliers for materials of work done on a property.
66
A party wall or a shared driveway is an example of an:
Easement appurtenant. AKA: an easement of ingress and egress.
67
The right of an owner to occupy a parcel of real estate forever is a:
fee simple absolute - the highest form of estate of ownership.
68
The type of lien that takes priority over all others is:
a Government lien (for property taxes). Doesn't follow the rule of "first in time, first in right"
69
As part of their right to govern land use, local municipalities enact and enforce:
Zoning ordinances.
70
A freehold estate is an estate of ownership with an:
indefinite duration.
71
Leasehold estates are estates of possession with a:
definite duration.
72
Zoning laws are set at a:
local level.
73
What is a freehold estate?
Land ownership that can be held for an unlimited time, or the period of ownership may be limited in some way.
74
What is a fee simple estate?
AKA "present possessory interest". Carries the maximum bundle of rights. Right to use property now and for indefinite period in the future.
75
What is a fee simple absolute?
Highest, most complete form of ownership.
76
What is a fee simple subject to a power of termination (fee simple defeasible)?
If the right of possession is restricted in some way.
77
A fee simple estate may be granted subject to a:
limitation on the use of the property or a condition that the property holder must or must not perform. The power of termination expires 30 years after the recording of the document creating it unless extended for another 30 years.
78
A power of termination:
will not expire during the lifetime of the grantor, if the grantor is a natural person and made without consideration to a governmental entity or a tax exempt organization.
79
What is a fee simple estate subject to a condition subsequent?
Some action or activity that the fee simple owner must no perform. If the condition is broke, the former owner can retake possession of the property. Enforcement of a fee simple subject to a power of termination or condition subsequent is by filing a notice of that intention of bringing a civil action.
80
What is a life estate?
The owner of a life estate has the right to possession and use of the property, bu the estate lasts only as long as the life of a person(s) identified in the deed or will that creates the estate. The measuring life is that of the holder of the life estate.
81
When the right of possession returns to the original property owner when the estate ends,
the original owner has reversion.
82
If the right of possession goes to a third person when the life estate ends,
the person has a remainder.
83
The holder of the life estate (life tenant) must:
keep up the property and taxes. If life tenant pays debts, i.e. mortgage, this benefits the reversioner and remainder man so life tenant is entitled to reimbursement.
84
Value of the life estates is based on:
the life expectancy of the individuals against whose life the estate is measured.
85
The use of life estate can be transferred by:
gift, lease, or sale, but the right to use and possession ends with the measuring life.
86
Special cases where life estate is measured life of someone other than the holder. If life tenant dies before that of which the estate life is measured,
the life tenant's interest passes to that person's heirs and will last until the end of the measuring life. The reversioner or remainder man can give, sell, or lease that interest, but no right of possession will take effect until the termination of the life estate.
87
Tenants rent or lease property from:
landlords.
88
Tenants own non freehold (less than freehold) estates and are called:
leaseholds or estates of tenancy. Instead of ownership interest, the tenant has the right to use the property for the stated period.
89
A conveyance of real estate is called a:
grant.
90
The person conveying the property (the owner) is called:
the grantor.
91
The person receiving the property is called:
the grantee.
92
Title to real estate (ownership)
can be taken by one person or by more than one.
93
When a conveyance of real estate is done correctly,
title "vests in" (transferred to) the grantee.
94
Ownership in severalty:
also known as "separate ownership" or "sole ownership" is ownership by one person - the property owner - can be individual or legal entity (corporation or trust), the only one to receive benefits of ownership.
95
Concurrent ownership is:
ownership by more than one person at the same time.
There are 4 types of concurrent ownership:
Tenancy in common
Joint tenancy
Community property
Tenancy in partnership
96
Tenancy in common (type of concurrent ownership):
Created when it is specified by name. Also created when more than one person takes title. They are not married to each other and no other method of taking title is specified.
97
Tenants in common
make take title at different times and may own equal or unequal shares. If no distribution is specified, tenants in common are presumed to own equal shares.
They can give, sell or divide share of property to someone else.
98
Unity Tenants in common have "unity of possession" which means:
each tenant has the right to possession of the property and cannot be excluded by the covenants.
99
What is partition action?
a lawsuit where there is a dispute when a tenant in common wants to dissolve shared ownership.
100
Joint tenancy (type of concurrent ownership):
```
a special form of co-ownership. Requires all co-owners take title to the property at the same time, by the same document. Each must have an equal share of the property.
Four unities of joint tenancy:
T - unity of time
T - unity of title
I - unity of interest
P - unity of possession
```
101
Four unities of joint tenancy:
T - unity of time (each takes title at the same time)
T - unity of title (each receives title through the same deed)
I - unity of interest (each owns an equal share)
P - unity of possession (each has the right to use all of the property)
102
Right of survivorship:
When a covenant dies, the survivors receive the deceased's share. The property does not go through a probate (official proving of a will)
103
New owner of a joint tenant becomes:
a tenant in common if there are still 2 more covenants. If only one other covenant, the joint tenancy has been completely destroyed.
104
Community Property (type of concurrent ownership):
Is real or personal property acquired by a spouse during marriage or by a registered domestic partner as defined in Family Code Section 297.
105
Separate property is property acquired:
by gift or inheritance to one spouse; with the proceeds of other separate property; as income from separate property.
106
Spouses are allowed to change community property to separate property by:
written agreement. Handling of money can change as separate property.
107
Commingling (mixed up) of separate funds (placed in the same account) with community funds:
they lose their status as separate property.
108
Quasi-Community Property is:
any California real estate acquired by an out-of-state married person that would have been considered community property if it had been acquired by a resident of California.
any California real estate acquired in exchange for real or personal property located anywhere.
109
Tenancy in Partnership (type of concurrent ownership):
The members of a partnership can own property for partnership purposes.
110
General Partnership
established when two or more persons carry on a business for profit as co-owners.
111
Tenancy in partnership:
Property owned by the partnership is owned by the individual partners. All partners have the right to possession of partnership property for partnership purposes.
The death of a partner will dissolve the partnership unless there was a prior written agreement.
All partnership income is distributed to the partners who repose that income individually.
112
Jane and her brother own a farm and have a right to survivorship:
Joint Tenancy.
113
Fred and Alita own their home as spouses. No form of ownership was specified in their deed, as Fred and Alita have not yet consulted an attorney:
Community Property.
114
Cal and Lou, both single men, bought a three-story Victorian home in Sacramento. No form of ownership was specified:
Tenancy in Common.
115
Helen is a partner in Real Estate Consultants, which owns a shopping center:
Tenancy in Partnership.
116
Fred, a married man, inherited a cattle ranch from his uncle. Fred is the uncles's sole heir.
Separate Property held in sole ownership.
117
Dennis has sole possession of Blackcare for as long as he lives:
Life Estate.
118
The Middle Falls School has sole possession of Whiteacre on the condition that it is used for educational purposes:
Fee simple estate subject to a condition subsequent.
119
The town of Merry Meadows has a beautiful library building. The building is a former mansion that was donated to the town with the stipulation that it be used only as a library. What kind of estate does the town have?
Fee simple estate subject to a condition subsequent.
120
A renter has lived in 316 Iowa Street for 15 years on a month to month lease term. Although his rent has been increased every few years, the landlord has never drawn up a lease agreement. What kind of estate does the renter have in the residence on Iowa Street?
Estate of tenancy.
121
In her will, Chau left her residence in Palm Springs to her nephew, Simon for the life of Simon's sister, Annette. On Annette's death, the home is to go to Annette's daughter, Yvonne. What estate does Simon have? What estate does Yvonne have? What happens is Simon dies before Annette does?
Simon has a life estate. Yvonne has a remainder while the life estate is in existence. If Simon dies before Annette, his heirs acquire the life estate until Annette's death. On Annette's death, Yvonne has a fee simple estate.
122
Sole proprietorship:
The simplest form of business ownership, because it has only one owner.
Own name/trade name; reports business income on his individual income tax return; responsible for the business debts; may or may not have employees.
123
Corporation:
Separate legally recognized entity, apart from owners; must be characterized by a state; acts through its board of directors and officers; may own, lease, convey real property; limits liability or officers, directors and shareholders.
Owners of a corporation are called shareholders.
124
A nonprofit corporation is owned by:
members rather than shareholders.
125
Domestic Corporations:
Corporations by the state in which they are chartered (created)
126
Foreign Corporations:
Corporations created in any other location, not their own state.
127
Liability:
Major benefit of doing business as a corporation - individual officers, directors, shareholders are usually not held personally accountable for corporate decisions and corporate debts.
128
Disadvantage of a corporation:
One disadvantage of a corporation is that profits are taxed twice. The corporation pays taxes on income, and income is taxed again when it is distributed to shareholders in the form of dividends.
129
S Corporation:
All shareholders must be individuals rather than other corporations.
If the corporation is formed under the requirements of Subchapter S of the Internal Revenue Code, income is allowed to flow directly to shareholders, avoiding double taxation.
130
To be treated as an S Corporation:
shareholders must file Form 2553 with the IRS. If they do nothing, they will be taxed as a c Corporation (under Subchapter C) and be subject to the double taxation mentioned above.
131
Partnership:
An association of two or more persons to carry on a business as co-owners for profit. Each has authority to act on behalf of the partnership and each is liable for the debts.
132
Limited Partnership:
Can be created only in compliance with state law. The California Limited Partnership must have one or more general partners who run the business and have unlimited liability for partnership obligations. Other investors can join as limited partners and their liability will be no more than the amount they have invested in the partnership.
133
Real Estate Syndicate:
Can take the form of a REIT (Real Estate Investment Trust), corporation, general partnership or other entity but is usually formed as a limited partnership. A syndicate of 100 or more participants must be approved by the Department of Business Oversight before Syndicate interests may be offered for sale.
134
Limited Liability Company (LLC):
typically provides the single-level tax benefit of a partnership with a flexible organizational structure.
135
LLC, unlike S Corporation:
places no restriction on the number of shareholders who take part and who they are.
136
LLC, unlike limited partners:
members of an LLC can take part in the running of the organization without incurring personal liability for business obligations. The freedom from liability has a cost - LLC incurs higher taxes and fees than either a general or limited partnership.
137
Trust:
A trust can be a form of property ownership. Title to property is conveyed by the truster (the property owner) to the trustee. Title is held by the trustee on behalf of a beneficiary.
138
Who controls the property held in trust?
Usually trustee powers are defined on document establishing trust. If not, the law of the state in which the trust is created is followed.
139
Testamentary Trust:
Trusts are often created by the terms of a will to care for the deceased children until they reach adulthood.
140
Real Estate Investment Trust (REIT)
Holds various forms of real estate or mortgages for the benefit of investors who own shares of the trust. REIT may be publicly traded.
141
Components of a REIT:
REIT is regulated by the Commissioner of Corporations; Must comply with federal and state tax law; must be owned by at least 100 different investors; cannot have any five investors own more than 50% of the trust; must receive at least 95% of its income from investments; must receive at least 75% of its investment income from real estate.
142
The National Association of Real Estate Investment Trusts (NAREIT):
serves REIT owners, managers, and related companies.
143
Living Trust:
The living trust (inter vivos trust) can be used to hold title to property during the lifetime of the truster, how is also named as the trustee of the trust. When the truster dies or becomes incapacitate, control of the property held in trust passes to a successor trustee named in the trust document.
144
Successor Trustee:
Control of property is passed on to successor trustee when the truster dies.
145
Easiest and quickest way to transfer property at death:
Living trust - effective estate planning tool.
146
The Spice Company owns a processing plant and leases dock space for its shipments. The company is doing very well, and it paid an excellent dividend to shareholders last year:
Corporation.
147
Joseph Marine owns World Wide Real Estate. Joseph, a licensed real estate broke, is the only owner of World Wide and reports company income on his personal tax return.
Sole Proprietorship.
148
Mountain Properties is a real estate syndicate of 127 investors. Only five members of the syndicate are allowed to participate in investment decisions:
Syndicate held as Limited Partnerships.
149
When Grandpa Peter died, he left his farm to his grandson, but his grandson will not receive title to the farm until he is 25. In the meantime, Cattlemen's Bank will manage and hold title to the property.
Trust.
150
The highest form of ownership in real property is:
the freehold estate in fee simple absolute.
151
It is possible to own a life estate:
to enjoy property for a time measured by one's own or another's life.
152
A reversion or remainder:
is the right to possess the property after the death of the holder of the life estate.
153
A fee simple subject to a power of termination or condition subsequent:
may be lost on breach of a limitation or restriction.
154
A conveyance of real estate takes place by a:
grant from the grantor (owner) to the grantee.
155
Property owned by only one individual is:
separate property. Both real property and personal property can be separate property.
156
Property acquired during marriage or by a registered domestic partner but gift, inheritance, or with the income or proceeds of separate property is:
separate property unless commingled (mixed up).
157
Community property:
property acquired by a spouse or registered domestic partner.
158
Concurrent ownership:
when two or more persons have ownership of real estate as:
1. Tenants in common
2. Joint Tenants with the right of survivorship
3. Tenants in partnership
159
Tenants in common:
share unity of possession. Each tenant has the right to use the entire property.
160
Joint tenants:
share the four unities of time, title, interest and possession.
161
A Partition action:
can be brought by a covenant who wants to have the entire property divided or sold.
162
A general partnership:
can own property as a tenancy in partnership. All general partners have the right to use partnership property for partnership purposes. All general partners are liable for partnership debts, and all share partnership income.
163
In a sole proprietorship:
the sole proprietor may take property in her own name or under the business's trade name.
164
A corporation may own property:
even if it is nonprofit.
165
A trust enables:
a trustee to hold property conveyed by a truster (property owner) for the beneficiary of the trust.
166
A testamentary trust:
is established by will.
167
A living trust (inter vivos / revocable trust):
can be used to convey property on death without the difficulty and expense of probate.
168
A real estate syndicate:
comprises of a group of investors, generally organized as a limited partnership.
The limited partners can benefit from the greater bargaining power of the syndicate while avoiding the liabilities of general partners.
169
A limited liability company:
offers the tax benefit of a partnership with the opportunity to take an active role in running the company.
170
An encumbrance:
Anything that has an effect on an owner's fee simple title to real estate or use of the property.
171
A marketable title to real estate:
is one that a prudent buyer would accept
172
Cloud on the title:
there is some reason why the owner's interest is less than perfect. Property may not be marketable or at a reduced price because of questionable title. A cloud can be cleared with "The quitclaim deed".
173
A lien:
an encumbrance that makes property security for the payment of a debt or discharge of an obligation.
174
A general lien:
applies to all property of the debtor. i.e., A judgement of a court
175
A specific lien:
applies only to identified property - i.e., parcel of real estate.
176
Examples of liens:
A judgement of a court (general)
A financing instrument, such as a treat deed (specific)
The mechanic's lien given to someone who helps improve property (specific)
177
Voluntary lien:
a lien agreed to by the property owner. i.e., mortgage or deed of trust that an owner of real estate gives to obtain financing.
178
Involuntary lien:
a lien that is imposed without the agreement of the property owner. Made possible by laws that prescribe ways in which unpaid debts can be used by creditors or government agencies to create the burden of a lien on the property.
I.e., tax lien, mechanic's lien, judgements, attachments.
179
Tax lien:
Involuntary lien that arises from a taxpayer's obligation to pay:
Real property taxes
State income and estate taxes, or,
Federal income, gift, and estate taxes.
180
Mechanics' Lien:
used to help secure payment for any labor, service, equipment, or materials used in the construction of improvements to real estate.
Can be claimed by a subcontractor.
181
One way to guard against possible claims is to require that the contractor obtain a
Payment Bond. Bonding company compensates the owner if the contractor defaults in the performance of contract obligations.
182
Lien release:
terminates the lien. Should be filed with the county recorder to prevent a cloud on the owner's title.
183
Mechanic's lien must be enforced within
90 days after the lien filing.
184
Enforcement of a mechanic's lien is by
foreclosure. This brings about a judicial sale of the property. Lienholder is paid out of the proceeds of the sale.
185
The Mechanic's Lien (Preliminary Notice):
Notice of the right to file a mechanic's lien should be made within 20 days of the time the work begins or materials are furnished. A direct contract with property owner serves this purpose. Otherwise a preliminary notice is hand delivered or sent by first class registered or certified mail to property owner, general contractor and construction lender.
186
The Mechanic's Lien (Starting Time):
Starting time is the date the construction project begins.
187
The Mechanic's Lien (Completion Time):
Project is completed when work stops, the owner accepts the work, work has been stopped for 60 continuous days, the owner has filed a notice of cessation after work has been stopped for 30 continuous days.
Notice of Completion may be filed by the owner with the county recorder within 10 days after the work is completed.
188
The Mechanic's Lien (Filing Time):
Mechanic's lien for unpaid work or materials is filed with the county recorder.
If there was no notice of completion/cessation filed by owner, all claimants have 90 days after completion of the work of improvement to file the mechanic's lien. If notice of completion was filed, a contractor must file the mechanic's lien within 60 days from the filing date of the notice. Everyone else has 30 days from the filing date.
189
Notice of nonresponsibility:
protection for the owner of real estate if unauthorized work is begun on the property.
Must be posed and recorded within 10 days of learning of the construction, repair, or other work.
190
Attachment:
Restricted primarily to cases involving a business, trade, or profession, Attachment is the process of the court ordering a title (ownership) to real or personal property of the defendant be "seized" and held by court as security for satisfaction of the potential award to the plaintiff.
Plaintiff - person who files a lawsuit against a defendant.
191
Judgement:
The judgement of a court is its determination of the rights of the parties to a legal action. The losing party has the right to appeal the decision to a higher court.
192
A final judgement:
becomes a lien on property of the judgement debtor when it is recorded by the party to whom it was awarded.
193
An abstract judgement:
Can be recorded in any or all of the state's 58 countries.
194
Writ of execution:
Any nonexempt property may be sold to pay a judgement debt. The lien holder requests a write of execution from the court, which directs the sheriff or other officer to sell the property.
195
Discharge of debt:
A judgement lien may be discharged before the end of its term by payment of the total damages owed. This results in "satisfaction of the debt.
Notice of satisfaction of a debt should be filed with the clerk of the court.
196
Bankruptcy:
A federal court proceeding.
Various forms:
Reorganization - the court approves a plan to repay creditors.
Liquidation - the court takes possession of the assets of the debtor and sells the assets to pay off creditors on a pro rata basis.
Debts of an individual who earns a regular income are reduced.
197
Trustee in Bankruptcy:
In a liquidation, a trustee in bankruptcy holds title to the debtors assets. The trustee is responsible for the sale of the assets, as necessary, and issues a trustee's deed to the b buyer of real property.
198
Easement appurtenant:
right of the owner of one parcel of land to travel to an adjoining parcel. Belongs to, or "runs with" the land.
199
Servient / dominant tenement:
Servient: the land over which the easement runs (burdened).
| Dominant : the land benefited by the easement.
200
Easement in gross:
a personal right to use land. The right belongs to an individual and is not appurtenant to any ownership in land. i.e., a railroad's right of way. pipeline and power lines
Since easement in gross is personal interest, it terminates on the owner's death.
201
Easement created by express grant or express reservation:
The owner of the land that will be the DOMINANT TENEMENT will RESERVE and easement right in the deed to the new owner of the land that will be the servient tenement.
The owner of the land that will be SERVIENT TENEMENT will GRANT an easement right to the new owner of the land that will be the dominant tenement.
202
Easement by implication of law:
If a subdivision plat map shows streets, an easement to use those streets is an easement by implication of law.
203
Easement by necessity:
A tract of land may be landlocked. Owner of a tract has an easement by necessity implied by law.
204
Easement by prescription:
Acquiring a specific use of or the right to travel over the land of another by statutory requirements similar to those for adverse possession.
205
Easement by condemnation:
Taking of an easement right by a public entity.
206
Termination of an easement:
1. Express agreement of the parties
2. Lawsuit
3. Abandonment of a prescriptive easement - unused after 5 years
4. Estoppel - if not used; if dominant tenement reasonably indicates that no further use is intended; the owner of the servient tenement makes use of the land in reasonable reliance on the representations of the owner of the dominant tenement.
5. Merger of the dominant and servient tenements
6. Destruction of the servient tenement
7. Adverse possession
8. Excessive use
```
ADAM E LEE
Abandonment
Destruction
Adverse possession
Merger
Express agreement
Lawsuit
Estoppel
Excessive use.
```
207
License to use land:
the permission given to another to come onto one's land. Non exclusive right. A license is personal property rather than real property and temporary rather than permanent.
May be terminated at any time without prior notice.
208
Restriction:
Limitation on the use of land.
209
Covenants, Conditions, and Restrictions (CC&Rs):
CC&Rs all serve to control land use. Commonly referred to as restrictions. Run with the land since they benefit the other property.
210
Covenants:
A promise to do something or to refrain from doing something.
211
Injunction:
If a covenant is breached. Court prohibiting or ordering the removal of the cause of breach.
212
Conditions:
Enforceable by the person imposing the condition. In a sale transactions - seller.
213
Condition subsequent:
will enable the seller to regain title to the land.
214
Restraint on alienation:
any condition that prohibits a property owner from transferring title to the property.
215
Deed restrictions:
prohibition against a property use that is imposed in the grantee's deed.
