Principles - Chapter 5 Encumbrances and Title Insurance Flashcards
Cloud on Title
any outstanding claim or encumbrance, vol or invol, which, if valid, affects or impairs owners title
Encumbrance
vol or invol claims on property which limit, restrict or otherwise affect owners right to use property
may be money=leins
Title Insurance
assurance against title defects or clouds on title that might result in a loss or diminution in value of a title
Lien
money encumbrance making property security for payment of debt or discharge of an obligation
Voluntary Lien
most common vol lien: deed of trust as security for loan
Mechanics Lien
most common involuntary lien
performed work or furnished materials for property
Must be founded upon valid contract with owner, general contractor or subcontractor
Notices
written prelim notice within 20 after work has begun. Can be done after 20 days, but claim rights may be subordinated to others
Filing a Lien
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.
If NO notice of completion is filed…what constitutes completion?
Occupancy or use by owner
Acceptance
Cessation of labor for continuous 60 days
or 30 days if owner filed Notice of Cessation
Priority of Lien
dates back to work start
taxes have priority over mechanics lien
mechanics lien has priority over mortgage and deeds of trust
Termination of Lien
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
Tenant Improvements-Notice of Non-responsibilty
Owner must post notice that they are not responsible for work within 10 days of being made aware of work
Attachment Liens
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
Judgement Liens
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
Lis Pendens
“suit pending” - notice that title or right to possession is in litigation
acts as cloud on title
Tax Liens/Assessments
Invol lien for property taxes
Tax liens are top of lien food chain
Homesteads
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
Homestead Exemption requirements
- statement showing names and status of person filing
- 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
Sale of Real Estate by Creditors
under homestead, home can be sold by judgment creditors if equity in property exceeds homestead exemption
Termination of Homestead Exemption
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
Easements
non-money encumbrance
in interest in land of another that entitles owner of the easement to use the land for a limited purpose
Appurtenant Easements
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)
Easements in Gross
do not have dominant tenement
ex: telephone companies - telephone box outside home
Easement Creation - Most common ways
Mutual agreement Necessity/Implication Dedication Prescription Condemnation
