Encumbrances Flashcards
Chapter 8
Encumbrances
claims, charges, or liabilities, that are binding on real estate. Something that stands in the way. May lessen the value or obstruct the use of property, but do not necessarily render title unmarketable. (Liens, Easements, Licenses, Encroachment, dedication, deed restrictions or covenants, leases, lis pendens
Lien
a charge against property that provides a security for a debt. It establishes a debtor - creditor relationship. Liens provide security for a debt or obligation of the property owner, which if not repaid, may result in a court orders sale to obtain proceeds to satisfy them.
General Liens
Affect all property of a debtor, both real and personal. Judgement, Estate & Inheritance Taxes, Debts of a Deceased Person, Internal Revenue Service and State Income Taxes, Corporation Franchise Taxes
Judgement Lien
involuntary lien issued by the court at the end of a lawsuit and filed with the county recorder.
Writ of Attachment
prevents an owner from transferring title to real estate while a court suit is being decided. The court would retain custody of the property until the suit was settled
Writ of Execution
Directs the sheriff to seize and sell as much property as necessary to pay the debt.
Satisfaction of judgement
obtained to clear the judgment lien after enough property is sold to cover the monetary amount
Specific Liens
A lien against one specific parcel for real property. Property Tax Liens, Mortgage lien, Mechanics Lien, Special Assessment Lien, Vendors Lien, Vendees Lien, Priority of liens
Estate and Inheritance Taxes & Debts of a Deceased Person
involuntary liens usually handled in probate court
Internal Revenue Service (IRS) and State Income Taxes
liens against the property of a person who is delinquent in the payment of Federal IRS or state income taxes
Corporation Franchise Taxes
State Governments levy taxes on corporations for allowing them to do business in the state
Property Tax Lien
(General Real Estate or Ad Valorem Tax) “at value” of the property being taxed. Comprised of taxes levied on real estate by various governmental agencies and municipalities.
Mortgage Liens
voluntary liens on real estate given to a lender by a borrower as collateral
Mechanics Lien
lien against property where work was done or supplies provided by contractors, subcontractors, architects, surveyors, laborers, etc. and payment not made. Both real and personal can be put up as collateral (involuntary). Person who filed the lien first would have priority over later liens. In SC, mechanics liens need to be recorded within 90 days of furnishing the last labor or materials.
Special Assessment Lien
placed against property for municipal improvements, (sidewalks, sewers, etc). Can be personal or public
Vendors Lien
The Sellers claim against the buyer if the full purchase price is not received. If the seller was providing the buyer with financing ( loan) and the buyer defaults, the seller would have the right to file a lien against the property. May results in the property being sold to satisfy the sellers lien
Vendee’s Lien
The buyers claim if the seller fails to deliver titles to the property that is purchased.
Priority of liens
real estate taxes and special assessments generally take priority over other liens and will be paid first if the court sells the property. Liens other than taxes and special assessment take priority according to the date of recording.
Easement
the right of one party to use the property of another for a particular purpose. IT is a non-possessory, incorporeal right, but it is not. an estate.
Types of Easements
Easement Appurtenant, Easement in Gross,
Easement Appurtenant
burdens one parcel of land for the benefit of another parcel of lan. There should be two adjacent tracts owned by different parties. The tract over which the easement runs is the servant estate, the tract that benefits from the easement is the dominant estate. It “runs with the land”. When the dominant estate is transferred, the easement is automatically transferred with it
Easement in Gross
a mere personal interest in, or the right to use another land and is not appurtenant. They can be personal or commercial
Personal Easement in Gross
not assignable and ends with the death of the owner
Commercial Easement in Gross
may be assigned, conveyed, or inherited. Typically these easements in gross involve utilities (railroad, right of ways, gas lines, sewer lines)
Ways to Obtain an Easement
by Necessity, by Prescription, Express Grant, Reservation, Agreement, Implication, Party wall easement, condemnation,
Easement by Necessity
arises when a property has no access to a street or public way (ingress and egress). It is implied
Easement by Prescription
arises when a claimant has used another land for a prescribed period of time - 10 years in SC. Proving continuous use to gain this easement would allow a person to use the land of another for a specified purpose. In order to successfully and legally achieve adverse possession the use must be open, notorious, visible and legally hostile.
Express Grant
is an agreement to an easement in writing and initiated by the owner and conveyed by a deed of conveyance
Reservation
an owner may sell al of the rights of ownership and a parcel of land but reserve an easement for him or herself in the deed.
Agreement
parties get together and agree on the easement. Not initiated by the owner and conveyed by a deed of conveyance
Implication
actions of the parties imply (indicate) that they need an easement
Party wall easement
an exterior wall of a building that straddles the boundary line between two lots or it can be a common wall separating two connected properties. Each lot owners owns the half of the wall on his/her lot and has an appurtenant easement in the other half of the wall.
Condemnation
acquired for public purpose through the power of eminent domain. The servant tenement must be compensated for any loss in property value
Ways to Terminate an Easement
Agreement, Merger, Abandonment or Non-Use, Release, End of Purpose
Agreement (easement)
quit claim deed from dominant estate owner extinguishes the easement
Merger
when the owner of one becomes the owner of both
Abandonment
no use of prescriptive easements by its owner can be in writing or by intent
Release
an easement may be. terminated by written release (quitclaim deed) from the dominant estate owner to the servant estate owner
End of Purpose
Easement ended once that purpose no longer exists
License
is a privilege to enter another land for a specific purpose. Unlike an easement, it may be terminated or canceled by the licensor. It is usually created orally and is temporary in nature. (permission to park in a neighbors driveway) A license ceases upon the death of either party
Encroachment
arises when there is an intrusion on the property of another by a building, a driveway, a fence, etc. Usually discovered by a survey rather than title evidence
Dedication
involves the granting of private property for public use. (dedicating land for a school or park can be oral or written)
Deed Restrictions
restrictions placed on the use of property by the owner, developer, or sub divider. They are listed and filed in public record. If violated, the owner can obtain a court injunction and the judge will issue a cease and desists order. “Run with the land” but have time restrictions.
Covenant
a written agreement between two or more parties in which a party (or parties) pledge to perform or not perform specified acts in regard to property. Found in deeds, mortgages, leases and contracts for deeds
Lease
A lease can obstruct the use of property for a period of time. The sale of property does not terminate a lease and therefore would prevent a new owner from gaining occupancy
Lis Pendens
(litigation pending) a recorded legal document giving constructive notice that na action (lawsuit) affecting a particular property has been filed in state for federal court. It is a notice of a possible future lien.
Public Encumbrances
Police Powers, License Laws, Zoning Laws, Zoning Appeals, Building Codes, Subdivision Regulations, Health and Sanitation Laws
License Laws
all states (including the District of Columbia and Canada) have enacted these laws to provide the state with the authority to license and regulate the activities of real estate brokers an salespeople
Zoning Laws
provides for the uniformity of property users. Usually divides the land into residential, commercial or industrial classifications. Regulate and affect the use of land, lot size, types of structure permitted, sq footage requirements etc. Zoning ordinance cannot dictate market value.
Zoning Appeals
An owner who wants to do something to the property that is not permitted by the zoning law can appeal to the local zoning appeals board.
Types of Zoning Appeals
Non-Conforming Use, Zoning Variance, Spot Zoning, Down Zoning, Buffer Zone
Non-Conforming Use
where a building does not conform to zoning because it was erected prior to the enactment of the zoning law and is exempt from the new zoning ordinances. If the building is destroyed, abandoned, or transferred the non conforming use would terminate.
Zoning Variance
where a zoning ordinance creates a hardship for a landowner, he/she can appeal for a zoning variance. (varying a setback by letting the owner build closer to the road because the back of the lot slopes steeply away from the road)
Spot Zoning
certain areas or spots are zoned differently from areas around it (chemical factory in a residential neighborhood)
Down Zoning
occurs when zoning is changed from higher-density uses to lower density uses. It regulates the number of units a building on the property may include the number of buildings that may be built on the tract of land. Often used to prevent the overloading of public services and infrastructure in that area.
Buffer Zone
A strip of land that separates one land use classification from another. Typically consists of landscaped parks and playground to screen or separate residential zones from adjacent non residential zones.
Building Codes
ordinances that specific minimum standards of construction for buildings in order to protect the public. 1. quality and strength of materials 2. sanitary equipment 3. electrical wiring 4. spacing of beams, girders, etc
Subdivision Regulations
adopted by many communities as part of a master plan and regulate such things as the width of streets, sewer and water mains, minimum lot and block dimensions, setback lines, areas reserved for public use and easements and rights way.
Health & Sanitation Laws
attempt to guarantee the health of the community by protecting water supplies and providing proper sewage or industrial waste into bodies of water.
Environmental Protection Laws
Laws that attempt to improve and preserve Americas Natural Resources. Agents are NOT required to understand complicated environmental legislations.
Environmental Protection Agency (EPA)
Federal laws enacted for the protection of the environment and substantial civil and criminal penalties. They establish environmental standard and complete impact studies.
The Clean Air Act (1967, amended 1990)
Requires the EPA to establish and enforce air quality standards to protect human health and safety, as well as the environment
The Clean Water Act (1972)
purpose is to restore and maintain the quality of the country’s water and protect the nations wetlands. They regulate the discharge of pollutants into US waters. A permit must be obtains for liquid waste discharge.
The Comprehensive Environmental Response, Compensation and Liability Act of 1980 *(CERCLA)
“Superfund”, Superfund Amendment and Reauthorization Act of 1986 (SARA) and Resource Conservation and Recover Act (RCRA) and Clean Water Act, The Safe Drinking Water Act, The Clean Air Act and the Toxic Substance Control Act are the most important laws
Asbestos
a fibrous material that has been used as construction material because it is a good fire retardant and efficient insulator. However, when inhaled it can cause fibrotic scarring in the lung, lung cancer, and mesothelioma. Use has been prohibited since 1978. Experts should remove asbestos.
Formaldehyde
A colorless gaseous chemical compound that was used for home insulation until the early 80s. Most common was used as adhesive in pressed wood building materials. Found to cause cancer in animals, and breathing difficulties, rashes and other symptoms in humans
Radon
a naturally occurring, orderless, tasteless radioactive gas. It is the second largest cause of lung cancer after cigarette smoking and is a group A carcinogen.
Indoor Air Quality
A broader issue of indoor air quality in commercial and industrial buildings. Clients should be advised to consider hiring experts to perform indoor air quality surveys.
Lead
can be found in drinking water or paint and is very dangerous especially to children. It can cause brain damage, convulsion and paralysis. It can become contaminated because it passes through lead pipes. Usually in sinks or kitchens. It was prohibited in 1978. December 1996 - congress passed legislation requiring real estate agents to disclose to the buyer the possibility of lead in pre-1978 housing.
Underground Storage Tanks
Tanks 20 years or older are likely to leak because of corrosion, stresses, faulty construction and installation. EPA estimates about 40% are leaking or discharging gas, petroleum or other hazardous liquid.
Polychlorinated Bi-phenols (PCBs)
used in electrical equipment and is considered a toxic waste. they may cause reproductive effects ,developmental toxicity, and tumor development in humans. They are used in electrical transformers, capacitors, heat and transfer and hydraulic systems.
Electromagnetic Fields
generated by the movement of electric currents. Major concern involves high tension power lines. Presently, there is no scientific proof to support the allegations of harm by electromagnetic field exposure
Mold
grows on almost any surface if there is sufficient moisture and temperature. Can cause destruction of the structure and can also produce toxins that can pose a serious health risk to humans. Most can be eliminated by a 10% bleach solution.
Carbon Monoxide
an oderless, colorless gas occurring when fuels are burned. Furnaces, Fireplaces, space heaters and automobile exhaust all produce CO which can accumulate with improper ventilation and lead to dizziness, nausea and even death
Common Requirements
ESA - environmental site assessments (often requested by a developer, buyer or lender, performed in phases.) Environmental Impact Statement - required if a developer before approval of the development is given to ensure that the proposed land projects do not adversely affect the environment
