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Real Estate Principles - JM > Principles - Chapter 5 Encumbrances and Title Insurance > Flashcards

Principles - Chapter 5 Encumbrances and Title Insurance Flashcards

1
Q

Cloud on Title

A

any outstanding claim or encumbrance, vol or invol, which, if valid, affects or impairs owners title

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2
Q

Encumbrance

A

vol or invol claims on property which limit, restrict or otherwise affect owners right to use property
may be money=leins

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3
Q

Title Insurance

A

assurance against title defects or clouds on title that might result in a loss or diminution in value of a title

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4
Q

Lien

A

money encumbrance making property security for payment of debt or discharge of an obligation

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5
Q

Voluntary Lien

A

most common vol lien: deed of trust as security for loan

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6
Q

Mechanics Lien

A

most common involuntary lien
performed work or furnished materials for property
Must be founded upon valid contract with owner, general contractor or subcontractor

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7
Q

Notices

A

written prelim notice within 20 after work has begun. Can be done after 20 days, but claim rights may be subordinated to others

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8
Q

Filing a Lien

A

lien claimants have 90 days after completion to file or shorter if owner files notice of completion
If notice of completion is filed, lien can be filed 60 days for gen contractor and 30 days for other claimants.

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9
Q

If NO notice of completion is filed…what constitutes completion?

A

Occupancy or use by owner
Acceptance
Cessation of labor for continuous 60 days
or 30 days if owner filed Notice of Cessation

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10
Q

Priority of Lien

A

dates back to work start
taxes have priority over mechanics lien
mechanics lien has priority over mortgage and deeds of trust

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11
Q

Termination of Lien

A

Payment and issuance of Release of Mechanics Lien or
Mechanics lien will not bind property after 90 days after filing or 90 days after expiration of a credit, unless foreclosure procedures commence within that time

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12
Q

Tenant Improvements-Notice of Non-responsibilty

A

Owner must post notice that they are not responsible for work within 10 days of being made aware of work

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13
Q

Attachment Liens

A

court process - property seized and held as security for future judgement
valid for 3 years after day of levy of writ
does not terminate upon death
property can not be sold while under writ of attachment and is custody of court pending outcome of lawsuit

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14
Q

Judgement Liens

A

final court ruling from court proceeding
lien created from judgement on real property owned or acquired by debtor in the county where judgement is recorded
remains for 10 years and can be renewed for another 10 if not satisfied

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15
Q

Lis Pendens

A

“suit pending” - notice that title or right to possession is in litigation
acts as cloud on title

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16
Q

Tax Liens/Assessments

A

Invol lien for property taxes

Tax liens are top of lien food chain

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17
Q

Homesteads

A

protection against forced sale property to satisfy debts, within limits
claimant must reside in homestead
homestead does not defeat tax lien, mechanic liens or deed of trust mortgage liens

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18
Q

Homestead Exemption requirements

A
  1. statement showing names and status of person filing
  2. statement that claimant resides on premise
    3.description of premise
    Protection is:
    150k for 65 or older (55 for mentally/phy disabled
    75k for married or head of household
    50k for all other single persons
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19
Q

Sale of Real Estate by Creditors

A

under homestead, home can be sold by judgment creditors if equity in property exceeds homestead exemption

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20
Q

Termination of Homestead Exemption

A

when filing a new exemption on another property
or Notice of Abandonment of Homestead.
Sale of property terminates a homestead and proceeds exempt for 6 months
divorce or death will NOT terminate if one souse remains in possession of title

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21
Q

Easements

A

non-money encumbrance

in interest in land of another that entitles owner of the easement to use the land for a limited purpose

22
Q

Appurtenant Easements

A

attached to parcel of land for the benefit of that land
dominant tenement: user
servient tenement: burdened by
ex: common driveway front house owner is serviant (burdened by) and back house in domiant (user)

23
Q

Easements in Gross

A

do not have dominant tenement

ex: telephone companies - telephone box outside home

24
Q

Easement Creation - Most common ways

A 
Mutual agreement
Necessity/Implication
Dedication
Prescription
Condemnation
25
Q

Mutual Agreement

A

both parties agree
must comply with necessary essentials of a deed
must be in writing
must be signed by owner - serviant tenemant

26
Q

Necessity/Implication

A

ingress/egress
ex:
landlocked necessity
water rights implicatiopn

27
Q

Dedication

A

dedicate for public use

28
Q

Prescription

A

open, hostile, exclusive and notorious use of another’s property over a period of time
failure for owner to defend, give rise to easement

29
Q

Condemnation

A

due process of law and just compensation is required

30
Q

Termination of Easements

A

Merger of tenements - one owner
voluntary relinquishment-quit claim by servient or filing of abandonment by dominant
non-use for 5 years (prescriptive only)
destruction of servient tenement

31
Q

Encroachments

A

unauthorized use of another’s property
ex: fence built over property line
3 year time frame for action for removal if below ground

32
Q

Licenses

A

permission of short term use of real property

33
Q

Restrictions

A

limitations on use of real property

private: CC&Rs(covenants, conditions and restrictions)
public: zoning, building codes, health codes

34
Q

Covenants

A

agree to do or not to do

dollar damages/fines

35
Q

Conditions

A

limitation on buyers ownership

may demand forfieture

36
Q

Declaration of Restrictions

A

private deed restrictions

37
Q

Termination of restrictions

A

designated termination date

terminate by agreement or merging of owners

38
Q

Public Restrictions

A

police powers to protect health, safety, morals and general welfare of public through enforcement of law

39
Q

Zoning Restrictions

A

subordinate to general plan
encompassing land, housing and open spaces
Zoning must be inline with adopted plan
Directive zoning: land use
Protective zoning: size, placement, density and space

40
Q

Zoning Relief

A

Variance-Approved deviation from general plan
Conditional: desired for public convenience
C=commercial
R=Residential
I=Industrial

41
Q

Building Codes

A

set by state and local govt for rules and regulation for construcution of improvements
permits

42
Q

Health Codes

A

water supply, sewage, drainage

43
Q

Title Insurance

A

research and certify title against unmarketable title

finds liens, encumbrances, cc&r etc

44
Q

Abstracts of Title

A

Chain of title

45
Q

Preliminary Title Reports

A

search through public records then title examination which creates a chain of title
Does not commit insurance company to insure

46
Q

Chain of Title

A

history of all transfers

47
Q

Categories of Title Insurance

A

Owner/Lenders policies
CLTA - standard coverage
ALTA - extended coverage

48
Q

Owners policy

A

insures owner title to land

49
Q

Lenders policy

A

insures priority and validity of deed of trust or mortgage

50
Q

CLTA

A 
California Land Title Association - standard policy
protects against risk of records
off record hazards (forgery)
lack of capacity
intent to convey title
loss from lien of federal estate taxed
expense in defending title
51
Q

ALTA

A

American Land Title Association

additional protection of unrecorded liens, off-record easements

52
Q

Cost of Title Insurance

A

Owner policy: issued for purchase price - double cost for ALTA
Lender policy: issued for loan amount - 25% higher for ALTA

Real Estate Principles - JM (11 decks)

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