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Real estate > Chapter 4- Encumbrances > Flashcards

Chapter 4- Encumbrances Flashcards

1
Q

Encumbrances

A

Anything that affects or limits the fee simple title to property. A right or interest in a property held by one who is not the legal owner of the property.

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2
Q

Types of encumbrances

A

1) Easements
2) Deed Restrictions (Private control)
3) Encroachments
4) Liens

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3
Q

More names for deed restrictions

A

1) Declaration of restrictions
2) Restrictive Covenants
3) CC&R’s

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4
Q

Easement

A

Nonpossessory property interest right one person has in land owned by someone else.

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5
Q

Encroachment

A

Are buildings, fences or other structures that reach beyond the owners property line.

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6
Q

Types of encroachments

A

1) A trespass-Could be walking on property, tree growing over fence.
2) nuisance- smell or barking dog.

abatement action- lesson the effect- cut back tree or muzzle dog.

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7
Q

Lien

A

Claim or charge of security for a debt or obligation.

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8
Q

Classification of liens

A

1) Specific- Mortgage, car loan

2) General- Applies to everything- IRS

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9
Q

Voluntary Liens

A
  • **All specific
    1) Mortgages
    2) Trust Deed- Deed of trust
    3) Carrybacks- Seller becomes lender.
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10
Q

Involuntary liens

A

1) Property taxes
2) Assessments
3) Attachments
4 Judgments
5) Mechanics liens
6) IRS
7) Decedent Debts

By Property tax first, then IRS, then date of record

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11
Q

Assessments

A

Governmental taxes

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12
Q

Attachments

A

Based on a judgement or seizure.

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13
Q

Judgments (lien)

A

A general lien that becomes specific with attachments.

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14
Q

Mechanics Lien

A

Hired contractor that did not get paid

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15
Q

IRS

A

General

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16
Q

Decedent debts

A

Deceased person is applicable to estate. (General

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17
Q

Types of judgements

A

Domestic-AZ court

Foreign- Outside AZ

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18
Q

How to record a judgement

A

File in public record- with constructive notice- recording date takes priority.

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19
Q

Writ of execution with judgement

A

Have to go back to court to go after.

1) Sheriff
2) Personalty then realty.

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20
Q

Garnishment

A

Get writ of execution to take out of paycheck

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21
Q

Statute of limitations on judgment

A

Judgement good for 5 years

Last 90 days can go and renew to get another 5 years.

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22
Q

Laches with judgement

A

If you did not renew in 5 years the judgement dies.

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23
Q

Priority of judgement

A

Based on recordation date.

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24
Q

Interest rate with judgement

A 
accrues interest (agreed rate or legal rate)
Legal rate: lesser of:  1% or 1% above prime.
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25
Attachment (lien)
Judgement
26
Types of attachments ( judgements )
1) Writ of Attachment 2) Garnishment 3) LIS PENDENS- Not a Lien
27
LIS PENDENS
Not a lien | Law suit pending
28
Order for LIS PENDENS
1) Judgement 2) Writ of attachment 3) Writ of execution
29
Mechanics lien
1) Written contract with owner 2) beginning of work 3) 20 day preliminary notice 4) record lien- licensed contractor only 5) 120 days to file 6) Priority goes back to the day work began 7) File a lawsuit- Judgement good for 5 years 8) Contractors can sign interest over to someone to take care of
30
level payments
An amortized mortgage repaid in equal, periodic payments that include principal, and interest.
31
Installments
Based on principal balance. Payment changes as it is paid off.
32
Interest only
Term, straight, const. bridge, Interim all mean same thing Principal payment due as a balloon at the end.
33
writ of execution
A court order direction the sheriff to seize and sell as much as the defendants property as necessary to satisfy the debt and expenses of the sale.
34
Budget
1/12 interest
35
Graduated payments
"GPM" Every year it goes up. Has a lower payment in beginning Negative amortization
36
Variable interest rates
"ARM" Adjustable Rate Mortgage Has a year cap and a lifetime cap
37
Equity participation
percentage "SAM" Shared Appreciation Mortgage Get part of the appreciation
38
Reverse Mortgage
Give you 50% of equity of home Do lump sum or monthly instalments Has to be first loan or lots of equity
39
Construction
(Interim, Bridge, Swing or Gap) - more names Interest only a) Draws- Take money in chunks as needed. Interest starts from draw. Interest only until project complete. Payback immediately. Then do a take out loan.
40
Types of Repayment Plans
1) Level Payments 2) Installment (not level) 3) Interest only 4) Budget 5) Flexible Payments 6) Variable interest (VRM) 7) Equity participation 8) Open end mortgage 9) Construction Loan
41
Types of Mortgages and Deeds of Trusts
1) Conventional 2) FHA insured 3) VA guaranteed 4) Chattel Mortgage 5) Package 6) Purchase Money 7) Blanket 8) Open End 9Junior or subordinate
42
Open End
Revolving line of credit
43
Conventional- Non-governmental insured
Banks, Savings and loan, Not FHA | 20% down
44
FHA insured
Government insured loan
45
VA guaranteed
Guaranteed by government. No insurance. Based on benefits.
46
Chattel
Personal Property is security
47
Package
Collateral real and personal property.
48
Purchase money
carrybacks
49
Blanket
Loan for builder or developer. Multiple parcels of collateral. Give partial release of lots.
50
Junior
Comes after- go from senior lien to junior lien.
51
Personal Property Liens
UCC=Uniform Commercial Code-personal lien-5years UCC-1 Filed with Secretary of State (government level) UCC-3 filed to release/terminate- File with secretary of state to release.
52
Title Theory
Mortgage transfers title to a property to the mortgagee, who holds it until the mortgage has been paid off. The title then passes to the mortgagor. Bank holds deed until paid off.
53
Lien Theory
Buyer has legal title.
54
Hypothecate
Pledge property but get to keep.
55
Promissory Note
Debt Document ....Promissory IOU
56
Characteristics of Promissory Note
1) Evidence of debt 2) Borrower liability 3) Not recorded 4) Negotiable document
57
Collateral
Security for a note
58
Lien Document "Claim"
1) Recorded 2) Signed by the borrower "Maker" 3) Notarization- Not under duress and verify the person 4) Legal description of the property.
59
Types of lien documents
1) Mortgage | 2) Trust Deed
60
Mortgagor
Borrower
61
Mortgagee
Lender
62
Mortgage
Legal title and all rights of ownership with mortgagor and owner holds the deed
63
Deed of Trust
Don't have to go to court- Non judicial perspective | Trustor- borrower (All rights of ownership)
64
Who is beneficiary with Deed of Trust
lender
65
Who holds title with Deed of Trust
Trustee holds bare legal title (No rights of ownership) Example: Escrow company, Attorney, lender, Broker, Insurance agent
66
Who holds the deed with Deed of Trust?
Trustor
67
Duties of trustee
Non judicial foreclosure, release and reconvey
68
Duties of borrower
1) Pay debt as agreed 2) Pay real estate taxes and assessments. 3) Keep the property insured. 4) Abide by all covenants in the note and collateral.

Real estate (14 decks)

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