Chapters 3 - Encumbrances

Question 1

Define lien

Answer 1

A lien is a document that uses a property to secure the payment of a debt or the discharge of an obligation. They include trust deeds or mortgages, tax liens, special assessments, mechanic’s lien, judgements and attachments.

Question 2

Example of specific lien

Answer 2

property taxes on real property (given January 1st)

Question 3

Example of general lien

Answer 3

State or federal income taxes and judgment liens can all become a general lien on your real property.

Question 4

If a contractor files a mechanic’s lien, it ties priority over all other liens except ______, _____ ___________, and ____ ______ filed prior to the “star tot the work.”

Answer 4

Taxes, special assessments, and trust deeds filed.

Question 5

When does a mechanic’s lien start?

Answer 5

It takes back to when the work started.

Question 6

Define completion bond.

Answer 6

May be required by a lender to ensure than an insurance company will complete the job if the contractor cannot.

Question 7

What is the filing time for people?

Answer 7

30 days (subcontractor)
60 days (general contractor)
and 90 days (all parties, if no notice of completion is given)

Question 8

What is the difference between property taxes and special assessments?

Answer 8

Special assessments are levied for the cost of specific local improvements while property tax revenue goes into the general fund.

Question 9

“Mello-Roos Bonds (Lien)”

Answer 9

Developers finance roads, schools, and other off-site improvements with “Mello-Roos Bonds,” which become a special tax levied against home owners. Sellers must disclose if their property is subject to a Mello-Roos lien.

Question 10

Attachment (Lien), lasts 3 years, doesn’t terminate upon death of property owner.

Answer 10

Is a process of the law that creates a lien. it gives custody of real or personal property to the court to assure payment of a pending lawsuit in that county.

Question 11

Lis Pendens (lawsuit pending)

Answer 11

Lis pendens is notice of a pending lawsuit that may affect (cloud) title to real property based on the lawsuit outcome. it remains on the public record (is effective) until the lis pendens is removed, the action is dismissed, or final judgment has been rendered.

Question 12

Define Writ of Execution (sale).

Answer 12

Is a court order requiring the sale of certain property to satisfy judgment. It extends the lien by 1 year.

Question 13

Define sheriff’s sale.

Answer 13

Sheriff’s sale is the forced sale of a debtor’s property to satisfy a judgment under a writ of execution.

Question 14

Physical Use Encumbrances (Non-Money)

Answer 14

Easements, Building Restrictions/Zoning, and Encroachments. There are also “leases” because they effect the physical use.

Question 15

Easement Appurtenant (runs with the land)

Answer 15

created for and beneficial to the owner of adjoining or attached lands.

Question 16

Dominant Tenement

Answer 16

The dominant tenement is the land that obtains the benefits of an easement. The owner of the servient tenement cannot terminate the easement; it must “serve” the dominant tenement. pg. 58 example

Question 17

Servient tenement

Answer 17

Is the land that gives the easement (use of the land) for the benefit of another.

Question 18

Easement in gross

Answer 18

Is not attached to any particular land or dominant tenement. But even if you own the land, you might be the servient tenement. Such as with a telephone or natural gas company, you still have to allow them onto your property.

Question 19

A “______” is permission to use another’s property for a certain purpose and period of time. Unlike an easement in gross, it can be revoked at any time.

Answer 19

“license”

Question 20

How to create an easement?

Answer 20

• Express Grant (in writing)
• Implication of Law (implied easement)
• Long Use (prescription; 5 years; non-use termination)

Question 21

Convenant

Answer 21

A promise to do or not to do a certain thing. Only SOME covenants “run with the land,” but ALL conditions “run with the land.”

Question 22

Zoning

Answer 22

Is the restriction on the use of private property by the local government agency.

Question 23

Encroachment…

Answer 23

Is the wrongful, unauthorized placement of improvements or permanent figures on property by a non owner of that property. You must pursue the right to have an encroachment removed within three years or lose your right.

Question 24

Homestead

Answer 24

A special provision of the California law that allows homeowners to protect their homes from forced sale to satisfy their debts, within certain limits.
- Head of the Household
and Federal Homestead Act of 1862

Question 25

A homestead is terminated by:

Answer 25

1. Declaration of Abandonment

2. the sale of the homesteaded property