Encumbrances Flashcards
DEED RESTRICTIONS AND EASEMENTS
ENCUMBRANCE
Any interest or right to land held by third persons which affects the title and possibly the value of the property.
2 types of encumbrances
- Some encumbrances affect physical condition of the property or affect the use of the property. These include deed restrictions ( private limitations on the use of land) , easements, and encroachments.
- Other encumbrances are financial: they involve money. Such encumbrances are called liens. A lien is a charge against property, making that property security for payment of a debt.
Nonmonetary Encumbrances
Nonmonetory encumbrances include deed restrictions and several types of easements.
DEED RESTRICTIONS
may be conditions or covenants:
A condition is a restriction that provides for ownership of a property to revert to the former owner, if the condition is violated.
It creates a defeasible fee estate.
A covenant is a promise to do or to not do something.
Subdivisions have covenant that establish set back lines, limit type of structures that may be built..
Persons adversely affected by a violation of a covenant , those (benefiting) from the restriction, may sue for damages or seek an injunction to force correction of the violation.
Nonmonetrary encumbrances
EASEMENTS
An easement is an irrevocable right to use all or a portion of another’s land for a specific purpose.
It is a non possessory right as it gives the holder the right to limited use, but not to possession of another’s real property.
Because an easement is a right to use and not to possess. It is usually non exclusive.
SERVIENT TENEMENT
LAND THAT IS SUBJECT TO AND THEREFORE ENCUMBERED BY THE EASEMENT IS CALLED A SERVIENT TENEMENT OR SERVIENT ESTATE.
An easement is an encumbrance but not a lien, as it does not involve money.
Because the easement belongs to some one else, the easement is an encumbrance to the title to that land.
Furthermore the sale of the SERVIENT tenement has no effect on the easement. The purchaser would receive title encumbered by the easement, even if it is not mentioned in the deed.
EASEMENT IN GROSS OR EASEMENT APPURTENANT
An ease that is the right of an individual or a company, held in benefit for the person or company is called “an easement of GROSS”. It is personal property of the easement holder and not to the land. The easement can be non commercial or commercial.
The easement in gross is the most common form of easement.
Usually commercial easements has to do with utility, or billboards on another’s property.
A commercial easement in gross can be sold, assigned and mortgaged.
W/ an easement in gross, there is only one parcel of real estate involved: the SERVIENT estate.
EASEMENT APPURTENANT
There are at least 2 parcels of land under separate ownership.
The easement is a burden on one property (the SERVIENT estate) and a benefit or appurtenances to another property (“the dominant estate or dominant tenement”)
Because an easement APPURTENANT is a property right and not a personal right, it is considered a real property interest rather than a personal property interest.
AFFIRMATIVE AND NEGATIVE EASEMENTS
An ease APPURTENANT my be an affirmative or a negative easement.
An affirmative easement is a right to physically use the SERVIENT tenement.
It could be a party wall connecting adjoining townhouses.
It could be a right of way providing ingress and egress over an adjoining parcel
It could be an easement to run sewer line across neighboring properties
A NEGATIVE EASEMENTis a right held by the dominant estate, which restricts the use of the SERVIENT estate.
This would include:
A view easement prohibiting the owner of the SERVIENT estate from constructing or growing anything which would block the view from the dominant estate.
A solar easement prohibiting blockage of the sun’s rays from reaching a portion of the dominant estate
An aviation easement prohibiting the owner of the SERVIENT tenement near an airport from doing anything to interfere with flight patterns.
CREATING AN EASEMENT
An easement may be created in the following ways.
1. Express Grant. The holder of the SERVIENT estate grants the easement in writing
, either in deed or written agreement between the parties. This could be considered an easement created by “ mutual agreement.”
- Express Reservation. The grantor of property reserves an easement in the property being conveyed.
- Eminent Domain. (Condemnation)
- Dedication. A sub divider must dedicate streets and other ares in a subdivision to gov. And easements to utility companies in order to receive subdivision approval.
- Implication. The results when an easement is not specified but is obviously necessary for a person to exercise rights received by grant or revision.
- Necessity. An easement by necessity is a type of implied easement, created when justice or necessity make it necessity make it necessary that an easement be provided for access to and from property.
- Prescriptions. This is unauthorized, non exclusive, open, notorious and visible, hostile, continuous and uninterrupted use of another’s property for a period set by state statute. It may result in the user obtaining irrevocable right to continue the use. Called a prescriptive easement or easement by prescription.
TERMINATING AN EASMENT
An easement may be terminated in the following ways:
- Written Release signed by easement holder. It can be in form of quitclaim deed or agreement between easement holder and owner of SERVIENT estate.
- Clear and Intentional Abandonment. By easement holder.
- Merger: of the SERVIENT tenement and dominant tenement under one owner
- Expiration: of a specified time period for which the easement was created.
- The purpose of the easement for which it was created, no longer exists,
Terminating an easement
- Prescription (adverse use) by the SERVIENT estate holder for a specific # of yrs.
- Eminent Domain w/ gov. Taking property with payment of fair compensation
- Destruction of the SERVIENT tenement I.e. utility lines that go through a building that would terminate if building is destroyed.
- No use of a prescriptive easement for a specified number of years
An easement is not terminated:
At the will of , or revoked by,, the possessor of the SERVIENT estate.
By the sale of either the dominant estate or the SERVIENT estate, even if it is not mentioned in the deed transferring the title to the dominant estate.
Merely because it created an inconvenience to the SERVIENT tenement impinging the quiet enjoyment of the property.
LICENSE
A license is a personal, revocable, non assignable right to use the property of another.
Because it is personal, it could be terminated by death of either party or by sale of the property.
It gives a person permission to use land for some limited purpose, but gives no other rights in the land.
It is like a non commercial easement in gross, except that it is revocable and need not be in writing.
ENCROACHMENT
An unauthorized intrusion. Of a building or other improvement onto one’s land.
Since the use of the land encroached upon is adversely affected by the existence of those improvements; the encroachment is an encumbrance, clouding the title.
The property owner could sue for ejectment to have the encroachment removed.
Usually an incroachment is discovered as a result of a survey.
MONETARY ENCUMBRANCES
LIENS
The lien is a security interest of the creditor in the property of another. It is a charge against property, making that property security for payment of a debt. In most cases the priority of a lien on real property is established by the date it is recorded.
Some liens are voluntary; others are specific.
Liens may be specific or general.
GENERAL LIEN
Is an involuntary lien that applies against a person and all of his property except property exempted by statute.
Judgement liens, debts of decedents, in come tax liens and estate tax liens.
SPECIFIC LIEN
An encumbrance against one or more specified parcels of real estate.
A mechanic’s lien, a property tax lien, a special assessment, or a mortgage applying to 3 parcels would be a lien.specific
VOLUNTARY LIEN
Created by a voluntary contract such as a mortgage or deed of trust, entered into by the debtor and creditor.
A mortgage would create an encumbrancwin the form of a voluntary lien pledging the property to secure the debt.
INVOLUNTARY LIENS
Are imposed by operation of law, without the owner’s consent.
Real Property tax lien, a mechanic’s lien a special assessment for public improvement
Benefiting property, an income tax lien, an estate tax lien, or a money judgement of a court resulting lawsuit.
Involuntary Liens may be statutory liens or equitable.
Statutory liens are those authorized by state statute such as a mechanic’s liens and property tax liens.
Equitable liens are those imposed by courts of equity, often as a result of breach of contract.
GENERAL LIENS
UPON DEATH OF A PERSON general liens for debts of the decedent are created when creditors file claims against the decedent’s estate.
Federal and state governments may impose estate or inheritance taxes on the estate.
Taxes may result in liens against the estate in order to ensure payment before estate proceeds are distributed to heirs, devisees or legatees. They are paid first from personal property then paid from the rest of the personal property. If any debts remain
Outstanding, the real property is sold.
INCOME TAX LIEN is general lien created when gov. Files a tax warrant. Once recorded , the lien applies to all of taxpayer’s property.
JUDGEMENT LIEN is a general involuntary lien resulting from a judgement “ in personal” (in person).
Because the lien is against a person, it is a lien against all of that person’s personal and real property
Debtor can clear the lien by paying off and would receive from the creditor a “satisfaction of judgement”.
Creditor can enforce lien by a process called “execution”. The creditor would ask court for a “writ of execution”, ordering sheriff to sell the debtor’s property to satisfy the judgement.
Items exempt by law. Ie clothes, household goods, or cars below a certain values.
HOMESTEAD EXEMPTION
In many states there is a provision for a homestead exemption.
In the event of a foreclosure, the debtor must be able to receive a certain amt. of equity from the sale.
The exemption does not defeat foreclosure of secured liens such as mortgages or deeds of trust or homeowners or condominium association liens.
SPECIFIC LIENS, only affect specified properties.
ATTACHMENT is a specific lien placed vs. property of a defendant in a lawsuit for money damages.
The attachment arises in those situations,at the start of or during the progress of a legal action, when it may be necessary to protect the creditor vs. the removal of the defendant’s property from reach of the court before judgement is rendered.
In the attachment process, a writ is issued by the court ordering seizure of certain property of the defendant in the action as security for the satisfaction of any judgement the plaintiff may recover.
The WRIT OF ATTACHMENT is used primarily vs. the property of absconding or fraudulent debtors.
The attachment is not dependent upon a judgement being rendered.
LIS PENDENS
The lis pendens may be recorded at or after the time of filing a lawsuit.
The recording gives constructive notice to any future purchaser of the property that he will be bound by all proceedings after the filing of notice , as if he were a party to the action.
The result is that any future judgement resulting from the lawsuit would date back to the date of recording the lis pendens and would have priority over claims of persons who had constructive notice of the possible judgement.
