Encumbrances

Question 1

Encumbrance

Answer 1

interest in real property that is held by someone who is not the owner. Anything that burdens or affects the title or the use of the property is an encumbrance. A property is encumbered when it is burdened with legal obligations against the title. Most buyers purchase encumbered property.

Question 2

Common liens

Answer 2

trust deeds and mortgages, mechanic’s liens, tax liens, and special assessments, attachments, and recorded abstracts of judgment

Question 3

encumbrances that affect the physical use of property

Answer 3

easements, building restrictions, and zoning requirements and encroachments.

Question 4

Lis Pendens

Answer 4

recorded notice that indicates pending litigation affecting the title on a property. It clouds the title, preventing the sale or transfer of the property until the lis pendens is removed, the action is dismissed, or final judgment is rendered. A pendency of action gives the least protection against a mechanic’s lien.

Question 5

Creating an Easement

Answer 5

Easements are created in various ways—commonly by express grant or reservation in a grant deed or by a written agreement between owners of adjoining land. An easement always should be recorded to assure its continued existence. It is recorded by the party benefiting from the easement as the dominant tenement. Express Grant The servient tenement, or the giver of the easement, grants the easement by deed or express agreement. Express Reservation The seller of a parcel who owns adjoining land reserves an easement or right-of-way over the former property. It is created at the time of the sale with a deed or express agreement. Implied Grant or Reservation The existence of an easement is obvious and necessary at the time a property is conveyed, even though no mention is made of it in the deed.

Question 6

easement by necessity

Answer 6

created when a parcel is completely land locked and has no access. It is automatically terminated when another way to enter and leave the property becomes available.

Question 7

Prescription

Answer 7

the process of acquiring an interest, not ownership, in a certain property. An easement by prescription may be created by continuous and uninterrupted use, by a single party, for a period of five years. The use must be against the owner’s wishes and be open and notorious. No confrontation with the owner is required and property taxes do not have to be paid. The party wishing to obtain the prescriptive easement must have some reasonable claim to the use of the property. The method used for acquiring property rights through prescription is similar to adverse possession, which is discussed later in the Unit. The main difference is the payment of taxes. Adverse possession requires the payment of taxes for five continuous years, while prescription does not. Also, remember one acquires title to property through adverse possession, but only a specified interest in property through prescription.

Question 8

Terminating an Easement

Answer 8

The owner of the property with the servient tenement cannot revoke or terminate the easement. Easements may be terminated or extinguished in eight ways: Abandonment: Abandonment is the obvious and intentional surrender of the easement. Non-use: If a prescriptive easement is not used for a period of five years, the easement is terminated. Destruction of the servient tenement: If the government takes the servient tenement for its use, as in eminent domain, the easement is terminated. Adverse possession: The owner of the servient tenement may, by his or her own use, prevent the dominant tenement from using the easement for a period of five years, thus terminating the easement. Merger: If the same person owns both the dominant and servient tenements, the easement is terminated. Express release: The owner of the dominant tenement is the only one who can release an easement. A usual way would be to sign a quitclaim deed. Legal proceedings: In order to terminate an easement, the owner of the servient tenement would bring an action to quiet title against the owner of the dominant tenement. A lawsuit to establish or settle title to real property is called a quiet title action or an action to quiet title. Estoppel: Unless created by express grant, an easement may be terminated by non-use and the property owner has reason to believe that no further use is intended. Excessive use: Depending on the terms of the easement, excessive use can terminate the easement.

Question 9

Declaration of Homestead

Answer 9

the recorded document that protects a homeowner from foreclosure by certain judgment creditors. The first $75,000 of a home’s value may not be used to satisfy a judgment against the head of a household. A mentally or physically disabled person, or someone over the age of 65, is entitled to protection up to $175,000. All others have a homestead exemption of $100,000. A homestead does not protect an owner against foreclosure on a trust deed, mechanic’s lien, or lien recorded prior to the filing of the homestead. Requirements for a Valid Homestead Certain requirements must be met before a homestead is valid. The claimant must be living on the property at the time of filing, must state his or her status as head of household or other, must describe the property, and give an estimate of value. Only one homestead can be valid at any one time. Termination of a Homestead An owner must file an Abandonment of Homestead form in order to obtain a homestead on a new property. Sale of the property automatically causes the homestead to terminate. However, if the owner moves from the homesteaded property and does not wish to file a new one, the original homestead remains valid. Destruction of the property does not terminate the homestead.