Encumbrances

Question 1

Encumbrance

Answer 1

Physical restriction or financial lien placed against a specific property. Places a burden on the title to that property. Money encumbrances and non money encumbrances.

Question 2

Voluntary Liens

Answer 2

use the property as collateral for repayment of debt. Mortgages and Installment Sales Contracts are the two types.

Question 3

Mortgage

Answer 3

Mortgage is given by the borrower. Lender records this loan at the registry of deeds.

Question 4

Note

Answer 4

Document given to the lender from the borrower. It is a promise to repay. This is the primary instrument in a mortgage transaction.

Question 5

Equitable title

Answer 5

acquired by the buyer when the buyer and seller enter into a Purchase and Sale. The P+S encumbers the sellers bundle of rights to the property

Question 6

Legal Title

Answer 6

Acquired by the buyer when the deed is delivered to the buyer.

Question 7

Installment Sales Contract

Answer 7

AKA Land contract/Contract for deed/Conditional sales contract. When the seller conveys their interest in a property to a new buyer.

Question 8

Legal Title

Answer 8

The vendor(seller) maintains legal title to the property until the financial obligation of the buyer is met.

Question 9

Equitable Title

Answer 9

The vendee(buyer) has equitable title to the property, the right of possession and use. They acquire legal title to the property when the loan is paid off.

Question 10

Default

Answer 10

If the buyer defaults on the loan, they lose their equitable title to the property and the equity that they paid to date.

Question 11

Hierarchy of Involuntary Liens

Answer 11

1. Property Taxes/Municipal Betterment Charges
2. Mortgage
3. Junior Mortgages
4. Mechanic Liens

Question 12

Assessed Value(Ad Valorem)

Answer 12

Property is assessed annually by a city or town according to value. Assessed value is not the actual value of the property.

Question 13

Determining the Tax Rate

Answer 13

Town Budget
______________
Value of total taxable property in the town =Tax Rate

Question 14

Tax Due Dates

Answer 14

Taxes are due annually but may be semi-annually or paid quarterly. Semi Annually = November 1st and May 1st

Question 15

Betterment Assessments

Answer 15

Charges due to a city or town by the owner of property who is selling their property. The charge will be found on the Municipal Lien Certificate ordered by the closing agent.

Question 16

Mechanics Liens(Specific Lien)

Answer 16

Lien placed on property by a contractor, sub-contractor, or materials person who did not receive payment from a property owner for work performed or materials supplied on a specific property.

Question 17

General Lien

Answer 17

Lien that includes more than one parcel of property. State or federal government could issue one of these. An IRS lien is a general lien. Lien is based on its filing date. Does not supercede prior recordings

Question 18

Attachments

Answer 18

A freezing of assets ordered by court action.Prevents owner from selling property.

Question 19

Easement

Answer 19

Non money encumbrance. Right someone has to use land that belongs to another owner. Automatically transfers to new owner when the property is sold.

Question 20

Ingress

Answer 20

access in

Question 21

Egress

Answer 21

access out

Question 22

Creation of easements appurtenant

Answer 22

created by deed, necessity, or prescription

Question 23

Easements by Prescription

Answer 23

Court needs to see that land was used

1. Openly
2. Continuously
3. Notoriously
4. Without Permission

for 20 years.

Question 24

C, C&R’s

Answer 24

Covenants, Conditions,Restrictions

Question 25

Encroachment

Answer 25

unauthorized intrusion and must be addressed when identified.

Question 26

HOA

Answer 26

Home Owner’s Association

Question 27

Covenants

Answer 27

Recorded restrictions placed on lots of land or on houses built in a subdivision.

Question 28

Zoning Ordinances

Answer 28

Implemented by cities or towns regulating use of land, building size, minimum lot size, height requirements and distance from property lines.

Question 29

4 categories of zoning

Answer 29

Residential
Commercial
Industrial
Agricultural

Question 30

Variance

Answer 30

When the owner of a property seeks to use the property in a manner inconsistent with the current zoning.

Question 31

Escheat

Answer 31

If someone died without a will(intestate) and did not have any heirs to leave the property to, their property escheats to the state.