Chapter 4: Encumbrances Flashcards
Encumbrances
An encumbrance is a nonpossessory interest in real property, held by someone other than the property owner.
It is either a financial burden or a nonfinancial burden on the property owner’s title.
Lien
A lien is a financial encumbrance. It is a security interest that gives the lienholder the power to foreclose, forcing the sale of the property so that the debt can be paid.
A lien is either voluntary or involuntary, and either specific or general.
What type of lien is a mortgage?
A mortgage is a voluntary, specific lien.
It is created by contract between the property owner and a lender when the property is offered as security for a loan.
What type of lien is a deed of trust?
Like a mortgage, a deed of trust is a voluntary, specific lien that makes the property security for a loan.
The key difference between a mortgage and a deed of trust concerns the method of foreclosure
What type of lien is a construction lien?
A construction lien is an involuntary, specific lien that can be claimed by someone who provides labor or materials for improvements on real property.
What type of lien is a judgment lien?
A judgment lien is an involuntary, general lien held by someone who was awarded a judgment in a lawsuit.
It attaches to all of the judgment debtor’s property in the county where the judgment was entered, or where an abstract of judgment is recorded.
What is an attachment lien?
In a lawsuit, the plaintiff may request an attachment lien against the defendant’s property.
The lien prevents the defendant from selling the property during the trial to avoid paying any judgment the plaintiff might win.
What type of liens are tax liens?
Taxation results in various types of involuntary liens. Property tax liens and special assessment liens are specific liens against the taxed property.
IRS liens are general liens against all of the delinquent taxpayer’s property.
Lien Priority
The rules of lien priority determine how the proceeds of a foreclosure sale will be applied if they are insufficient to pay off all the liens against the property.
The lien priority of mortgages and deeds of trust is generally established by recording date. “First in time is first in right.”
Homestead Exemption
A homestead is an owner-occupied dwelling.
In Washington, a portion of a homestead’s value is automatically protected against foreclosure of judgment liens. The homestead exemption amount varies from county to county.
Express Grant
A property owner can create an easement expressly; that is, by putting the grant into words. This must be done in writing. The grantee should have the deed or other document recorded.
Express Reservation
A property owner who is transferring part of his property to someone else may reserve an easement against the parcel he’s selling for the benefit of the property he’s keeping
Implication
An easement by implication arises when part of a larger property is sold and the seller fails to grant or reserve an express easement.
The easement by implication must be reasonably necessary, and there must have been apparent prior use at the time of sale.
Perscription
An easement by prescription is created through long-term use of property without the owner’s permission.
Release
If the dominant tenant signs a release of his easement rights and the servient tenant records the release, the easement is terminated.
It no longer encumbers the title to the servient property.
