Property Ownership, Transfer of Title & Land Use

Question 1

What are Encumbrances?

Answer 1

is a claim charge
or liability that attaches to Real Estate like private or public restrictions, easements, liens, and encroachments.
They affect the condition or use of the property.

Question 2

Lien

Answer 2

is a legal claim of one person upon the property of another person to secure the payment of a debt or the satisfaction of an obligation.
A lien attaches to real property when it is recorded.
With personal property, the lien does not attach until the property is seized

Question 3

How are Liens created?

Answer 3

Voluntary lien
is created with the owner’s consent.

Involuntary lien
is created without the owner’s consent and may be statutory (created by law) or equitable (created by court action).

Question 4

What are the two basic kinds of Liens?

Answer 4

General Liens 
affect all property, real and personal.
General liens include:
Judgments
Estate/Inheritance taxes
IRS taxes Because there are liens against person’s personal and real property.
Specific Liens 
only affect the property the lien is secured by
Specific liens include:
Real Estate taxes
Mortgage liens
Mechanic’s liens
Special Assessments Because they are specific to a specific piece of property.

Question 5

Junior liens

Answer 5

are not in the first position and can foreclose. However, they are always subject to the previously recorded liens which take priority.

Question 6

Transfer Tax Stamps

Answer 6

Property owners incur expenses when they sell. In many states, they are charged a transfer tax when they convey property. Some states refer to these asTransfer Tax Stampsand are usually payable when the deed is recorded. Typically, it is paid by the seller, although the buyer may pay, or it may be split; depending on local custom or law.
Some deeds are exempted from the tax, such as gifts, deeds that are not the result of a sale, conveyances to or between government bodies, charitable transfers to religious or educational institutions, and transfers between relatives or co-owners.
This tax is based on the sale price or value declared at the time of the transfer.

Question 7

As an encumbrance, liens “run with the land”.

Answer 7

They attach to the property, not the property owner.
They bind the owner and all successive owners until the lien is either paid or cleared
Generally, real estate taxes & special assessments take priority over all other liens

Question 8

Real Estate Tax Liens are general real estate or ad valorem: specific, involuntary, statutory liens; levied by taxing bodies as a government power for:

Answer 8

States and counties
Cities, towns, boroughs, and villages
Districts for public services (hospital, schools, etc.)

There are exemptions to ad valorem taxes like:
Properties used for tax-exempt purposes by cities and various municipal organizations
State and Federal Governments
Religious and charitable organizations
Hospitals and educational institutions

Question 9

Tax levy

Answer 9

is imposed on each parcel of real property. The tax rate for each taxing body is computed separately so there may be a:
City tax
County tax
State tax
A tax bill is then sent to each property owner.

Question 10

Equitable right of redemption

Answer 10

When taxes are delinquent, a property can be foreclosed on by the governing body. There is a period of the equitable right of redemption which means the taxes may be redeemed (paid in full) before the tax sale, in order to avoid foreclosure.

Question 11

Statutory right of redemption

Answer 11

Is when a defaulted owner may redeem by paying the amount collected at the tax sale plus interest and charges, including taxes levied since the sale.

There is a limited period of time allotted for this statutory right.

Question 12

Special Assessments for special improvement districts (SIDs)

Answer 12

Special Assessments for Special Improvement Districts (SIDs) are areas that have undergone (or are undergoing) development and the property owners and future property owners are sharing the expense of the improvements in the area.

The assessment is typically spread out over a number of years, with the property owner having the right to prepay at any time without penalty.

Question 13

Local improvement district (LID)

Answer 13

Local improvement district (LID) may also be created to fund large-scale improvement projects in the area and in managed in the same way.

Question 14

Estate and inheritance tax liens

Answer 14

which are involuntary, statutory, general liens and are usually paid during the probate court proceedings.

Question 15

Internal Revenue Service

Answer 15

(income)tax liens which areinvoluntary, statutory, generalliens that result from a person’s failure to pay any portion of their federal tax liability; such as income and withholding taxes

Question 16

Judgment liens

Answer 16

are involuntary, equitable, general Liens
A judgment is a decree issued by a court and its lien priority is assigned according to the laws of the state in which the property (real or personal) is located
Judgments are enforced through the issuance of a writ of execution and ultimately result in the sale of the property. When the property is sold,action of judgment should be filed.

Question 17

Lis Pendens

Answer 17

A Lis Pendens denotes that there is litigation pending regarding the title of the property. It is an encumbrance on and gives public notice of a possible future lien on the real estate.
The Lis Pendens attaches to the property and the real estate cannot be transferred until a decision is made by the court and the court retains custody of property until the conclusion of the lawsuit.

Question 18

Mortgage liens & deed of trust liens

Answer 18

are voluntary, specific liens used in real estate financing

Question 19

Mechanic’s liens

Answer 19

are involuntary, statutory, specific liens.
Mechanic’s liens give security to those who perform labor or furnish materials in the improvement of real property.
There must be an agreement; a contract (expressed or implied, but usually written) between the owner and the contractor for the work to be performed.

Question 20

Utility liens

Answer 20

are involuntary, equitable, specific liens granted to municipalities to assure collection of the funds due them for utility services they have provided to property owners.

Question 21

What is an Easement?

Answer 21

An easement is another form of encumbrance.

It is a right to use another’s land for a specific purpose.

Question 22

easement appurtenant

Answer 22

allows the use of a neighbor’s land and is either by necessity or by prescription.
An Easement Appurtenant attaches to the ownership of real estate and is part of the dominant tenement (the landowner who benefits from the easement) thus conveys with the title when the dominant tenement transfers their property.

Question 23

easement by necessity

Answer 23

means that there is a need for the easement and is created by court order.
Example: Ingress or Egress to property
To enter and exit a property because everyone has the right to access their property.
AnEasement Appurtenantattaches to the ownership of real estate and is part of thedominant tenement(the landowner who benefits from the easement) thus conveys with the title when the dominant tenement transfers their property.
The easement is considered an encumbrance on the property of theServient Tenements(the owner who is subject to the easement)

Question 24

Tacking

Answer 24

Tackingis combining successive periods of time together to fulfill the required timeframe.
If 7 years are required, one owner uses the property for 3 years , another for 4 years, together they have satisfied the 7 years provided it’s continuous.

Question 25

Easement by prescriptionAka prescriptive easement

Answer 25

Aneasement by prescriptionAKAprescriptive easement,is created over time where one uses the property of another openly and non-exclusively (meaning the owner of the property is still using their property) for a period of time.To obtain an easement by prescription the use must be open, notorious, visible and without the owners approval.
An Easement is terminated when it us no longer necessary or it is abandoned

Question 26

Gross easements

Answer 26

Gross easementsare very commonThey exist for utility companies to be able to access their equipment and lines on a property.

Question 27

What is a license?

Answer 27

Alicenseis a privilege. It the permission to use another’s land for specific purpose. It attaches to the person not to the property. It can be canceled by the giver at any time and if the property is conveyed, the license holder would have to get permission from the new owner.
The license is not transferable.
It only ends with the sale of the property.
It terminates upon the death of either party.

Question 28

Encroachment

Answer 28

Encroachmentit is an illegal intrusion into another’s property.

Question 29

In Land, what is the extent of the Government’s rights?

Answer 29

Locally, regionally and nationally the government has a scope of authority to set limitations on ownership for the general welfare of the community at large which supersedes the rights or interests of the individual owner; however, there is a due process afforded to property owners by law.

Question 30

Government powerPETE

Answer 30

P = Police Power
E = Eminent Domain
T = Taxation
E = Escheat

Question 31

Police Power

Answer 31

States and local governments can enact legislation to protect the public's health, safety and general welfare.
Examples of policepower:
Zoning ordinances
Building Codes
Environmental protection laws
Other regulations

Question 32

Eminent Domain

Answer 32

Eminent Domainis the right of the government to take privately owned real estate for public use and for public benefit. The process by which the privately owned real estate is”taken”is calledcondemnation
1.There is due process and there are legal protections for property owners faces with eminentdomain.
2.The rights of the owner must be protected under due process oflaw 5th amendment”nor shall private property be taken for public use without justcompensation.
3.Just compensation must be paid to the owner for both the property taken and the diminished value of what is still left.
The right extends to quasi-government bodies that can include renewal projects. The proposed use must be determined by courts to be for legitimate public use; however, condemnation for “public use” has been defined loosely by some government entities.

Question 33

Inverse Condemnation

Answer 33

Inverse Condemnationis when the government take private but fails to pay compensation.
In some states the term also includes the damaging of property as well as the taking of it.In order to receive compensation the owner must she the government

Question 34

Taxation

Answer 34

ATaxIs a charge on real estate to raise funds to meet the costs of government operations as discussed in module 8 under liens.

Question 35

Escheat

Answer 35

The process provides that the ownership of real estate (and personal property) will revert to state (or county) in which it is located when it’s firmer owner dies without a will (interstate) and has no heirs capable of being discovered by the state.
The spirit of this power is that no personal or real property will be abandoned becoming a hazard to the public.