Section 4: Liens and Encumbrances

Question 1

What is an Encumbrance:
* The term encumbrance is used to describe an impediment or a type of hindrance that ‘could’ LOWER the value of the property.
* An encumbrance is a right or interest in property held by someone other than the ______.

Answer 1

Legal Owner

Question 2

What is an Encumbrance:
Could be a NON-_____ type of encumbrance:
o Claim set forth by others, court issued claims, easements, government powers, or some other restrictions in the deed.

Answer 2

Monetary

Question 3

What is an Encumbrance:
Could be a _____ type of encumbrance:
o Mortgage, tax lien, IRS lien, judgements.

Answer 3

Monetary

Question 4

What is an Encumbrance:
An Encumbrance of any sort could affect the ‘_____’ of the tile.
* In some cases, encumbrances could negatively affect a properties value:
o EASEMENTS across your land
o Potential Zoning CHANGES
o UTILITY lines in your yard recorded

Answer 4

Transferability

Question 5

What is an Encumbrance:
In no case, can an encumbrance be used to prevent transfer of _____ it’s more of a hassle think of it as making it harder or less desirable of a property.
* Think of hurdles in a track race… You will finish, but by putting up hurdles, it just slows you down and makes it more difficult and less desirable to do!

Answer 5

Title

Question 6

Lien vs Encumbrance:
* A LIEN is ‘______’ claim placed against real property.
* The real property is the collateral
used to secure the lien.
o Mortgages & Home Equity Lines of Credit (HELOC) are examples of Liens.

Answer 6

Monetary

Question 7

Lien vs Encumbrance:
* An Encumbrance encompasses a much broader term, referring to any sort of claim against real property and could be either monetary or non-monetary.
o A recorded _____, a license granted to someone else to use the property, a deed restriction (that runs with the land) and of course Liens are examples of encumbrances.
All liens are an encumbrance, but not all encumbrances are liens

Answer 7

Easement

Question 8

Some more about Encumbrances:
* Non-Monetary Encumbrances:
o Non-monetary encumbrances affect the use and condition of the _____.

Answer 8

Property

Question 9

Some more about Encumbrances:
o Easements typically “run with the land” meaning they are passed on to new _____ when property conveys and all terms remain in effect.

Answer 9

Owners

Question 10

Some more about Encumbrances:
o _____ (a type of encumbrance) = A right to use or to cross over someone else’s property for a specified purpose, like ingress or egress.
 Usually for LANDLOCKED property

Answer 10

Easements

Question 11

Easements:
* _____:
o In Arizona, it is illegal to sell property that is LANDLOCKED, there must be a recorded easement for access.
o Issued by court order
 Right Of Way
* The right of way benefits the dominant tenant.

Answer 11

Easement by Necessity

Question 12

• ______: Any easement that benefits one piece of land or property but is a detriment to the other piece of land or property.

Answer 12

Easement Appurtenant

Question 13

Easement by Necessity:
______ = Next to / Attached to

Answer 13

Appurtenant

Question 14

Easement by Necessity:
o The property that benefits is known as the “______”.
o For the Dominant Estate, this is a “BENEFIT”.

Answer 14

Dominant Tenement

Question 15

Easement by Necessity:
o The detriment property is known as the “_____”.
o For the Servient Estate, this is an “encumbrance”.

Answer 15

Servient Tenement

Question 16

_____:
* An easement in gross benefits an individual or a legal entity
o Think of Utility companies, power lines, Gas lines, etc.
o Most properties have these easements on the front or back of their land and allow utility companies the rights to add or remove cables, lines, plumbing etc.

Answer 16

Easement in Gross

Question 17

_____: benefits a person or entity, rather than a parcel of land.
o Think of a homeowner cutting through the yard of someone else’s land to get to the Supermarket quicker.
o Used with a permission of the owner, could be a license to use.

Answer 17

Personal Easement In Gross

Question 18

Easement in Gross:
* When someone in Arizona uses another person’s land for a determined
amount of time = _____ Years in Arizona
o Must be Continuous Use.
o Must be “_____” = without the owners permission or any type of license.
o Must be Visible, Open and Notorious – the owner and public can see it, know of it.
o If separate users successively use this for periods of time, it’s known as “_____”.

Answer 18

10 Years

Adverse Use

Tacking On

Question 19

Easement in Gross:
* _____: Common items on a divided property line.
o Most often a Fence which is property of both owner who share responsibility.
o Could also be shared driveways / walkways (cluster homes).

Answer 19

Party Wall Easements

Question 20

Easement in Gross:
* _____: A land owner makes a promise to a state agency to preserve portions or all of the land for the good of the public.

Answer 20

Conservation Easement

Question 21

Easement in Gross:
* _____: A type of easement that would prohibit a neighbor from blocking your view, or, from removing trees/landscape that was part of the view.

Answer 21

View Easement

Question 22

Creating and Ending an Easement:
Easements can be created or in fact terminated:
* Creating:
o _____ – owner could create a voluntary easement by expressly offering it in a sales agreement of as part of a deed.

Answer 22

Voluntary

Question 23

Creating and Ending an Easement:
Easements can be created or in fact terminated:
* Creating:
o _____ – By court order to access landlocked property.

Answer 23

Necessity

Question 24

Creating and Ending an Easement:
Easements can be created or in fact terminated:
* Creating:
o _____ – Government could create an easement “for the good of the people”.

Answer 24

Eminent Domain

Question 25

Creating and Ending an Easement:
Easements can be created or in fact terminated:
* Creating:
o _____ – A court order could give someone the rights to access another’s property even if the owner objects to this.

Answer 25

Prescription

Question 26

Creating and Ending an Easement:
Easements can be created or in fact terminated:
* Terminating or Ending:
o ______ – an easement that is no longer used will terminate that easement.

Answer 26

Non-Use Easement

Question 27

Creating and Ending an Easement:
Easements can be created or in fact terminated:
o _____ – If a property is condemned, it’s not allowed to use that easement.

Answer 27

Eminent Domain

Question 28

Creating and Ending an Easement:
Easements can be created or in fact terminated:
o _____ – if the property is destroyed, there is no need for an easement.

Answer 28

Destruction

Question 29

Creating and Ending an Easement:
Easements can be created or in fact terminated:
o _____ – purposeful abandonment by the Dominant Estate.

Answer 29

Abandoned

Question 30

Creating and Ending an Easement:
Easements can be created or in fact terminated:
o _____ – if the owner takes back the license or denies use.

Answer 30

Release

Question 31

________ = restrictions on the use of the real estate in some way.

Answer 31

Deed Restrictions

Question 32

Deed Restrictions:
* They are listed in the deed.
* The seller may add a restriction to the title of the property.
* ________ usually place restrictions on each property in a community development in order to maintain a uniform look and appeal.
* Examples of deed restrictions are building heights, minimum square footage, property setbacks.

Answer 32

Developers

Question 33

CC&R’s:
* CC&R = _____

Answer 33

Covenants, Conditions and Restrictions

Question 34

CC&R’s:
* Written restrictions NORMALLY created by the original developer.
* Can be modified by the ______ or added to
* Similar in nature to deed restrictions, if a property owner fails to adhere to the CCR’s, the other homeowners can force legal action against the owner.

Answer 34

Homeowner’s Association

Question 35

CC&R’s:
HOA’s in the CC&R’s have reserved the right protect the community property for the benefit for the whole community and as such, establish rule, penalties, fines and liens.
* In AZ it is legal and possible for HOA’s to lien a property and actually foreclose in order to satisfy a lien for failure to pay ______.

Answer 35

Assessments

Question 36

CC&R’s:
* This is due to the HOA trying to protect the general community (if one owner fails to pay ______ or dues, this puts the whole community at risk).

Answer 36

Special Assessments

Question 37

CC&R’s:
o HOA’s can NOT _____ on a homeowner for failure to pay fines/interest as these are NOT protecting the community.

Answer 37

Foreclose

Question 38

CC&R’s:
o The minimum amount that must be in collection is $_____ before an HOA can begin the foreclosure process on a homeowner.

Answer 38

$1200

Question 39

_____ = The failure to assert your legal rights in an appropriate time.
* There is a statutory time frame whereby if you fail to enforce the rules, you have in essence allowed this and hence, are unable to enforce later.

Answer 39

Latches

Question 40

Latches:
* Latches= The failure to assert your legal rights in an appropriate time.
- EX. If a neighbor added a garage on their property and that is against the CC&R’s, the CC&Rs must be enforced in a timely fashion. If too much time goes by, the ccr’s become _____ due to the duration of time that passed.

Answer 40

Unenforceable

Question 41

______ = A type of nuisance, an intrusion on a person’s territory, property or individual rights.
* Nuisance – smells, barking dogs, flood lights shining into another yard.

Answer 41

Encroachments

Question 42

Encroachments:
* Encroachment = A type of nuisance, an intrusion on a person’s territory, property or individual rights.
* EX. If your neighbor’s dog is constantly barking, that is an encroachment on your _____ to live in a peaceful setting!

Answer 42

Rights

Question 43

______ =is an apparent encumbrance, discovered in the title search and history.
o It could impair the rights of the owner to transfer their rights free and clear.
o Examples could be previously recorded liens from a previous owner that were never released properly or could even be a recorded tax lien, mechanics lien, etc.

Answer 43

Cloud on a Title

Question 44

______ = Money that will affect title to the property involved.
* Liens! Remember; Liens always represent a monetary interest.
* All liens are an encumbrance, but not all encumbrances are liens.

Answer 44

Monetary Encumbrances

Question 45

Classifications of Liens (1-7):
#1 ______ = is a lien on all property, both real and personal of a debtor.
o If a person owes taxes to the IRS it is a general lien against all real and personal property of the tax payer, which could include their real property or their bank account which is ‘personal property’.

Answer 45

General Lien

Question 46

Classifications of Liens (1-7):
#2 ______ = are debts that are directly tied to the real property only.
o Specific liens would be HOA liens & property tax liens.
o Another lien of this type would be borrowing money to buy the house. The lender would want to lien the property being used as collateral.

Answer 46

Specific Liens

Question 47

Classifications of Liens (1-7):
#3 ______ = that one would allow and acknowledge, they elect to have that lien.
o Mortgages or HELOC.

Answer 47

Voluntary Liens

Question 48

Classifications of Liens (1-7):
#4 ______ = occurs by law, such as a tax or special assessment lien.
o IRS Tax Liens, HOA Dues, Judgements.

Answer 48

Involuntary Lien

Question 49

Classifications of Liens (1-7):
#5 ______ = is a written notice that a lawsuit has been filed.
o The notice is usually filed in the county land records office.
o Alerts a potential purchaser or lender that the property’s title is in jeopardy.

Answer 49

Equitable Lien [Lis Pendens]

Question 50

Classifications of Liens (1-7):
#6 ______ = is any lien that is placed on the property by “an act of law”.
o Any Special Assessments placed on a property.
o Real Estate Property Taxes.

Answer 50

Statutory Lien

Question 51

Classifications of Liens:
#7 ______ = Two parties have contracted to create a lien.
o Most common type of contractual lien would be a mortgage or a deed of trust.
o Another type of contractual lien could be using the equity in your home to secure a loan to build a pool.

Answer 51

Voluntary Liens [Contractual Lien]

Question 52

Liens WHO and WHEN:
______ = Creditor placing the lien (could be government, lender, individual or court).
o “GIVE-OR” or giver of the lien.

Answer 52

Lienor

Question 53

Liens WHO and WHEN:
______ = Debtor who owns the property (could be personal or real property).
o “RECEIV-EE” or receiver of the lien.

Answer 53

Lienee

Question 54

Liens WHO and WHEN:
Liens are ranked in the order of which they were ‘_____’.
o FIRST IN TIME, FIRST IN LINE.
o Except for mechanics and materialmen’s liens (more on this later).

Answer 54

Recorded

Question 55

Liens WHO and WHEN:
IMPORTANT: Real Estate ____ ALWAYS take PRIORITY.
o They will be paid if a sale takes place before any other liens, what money is left after that goes to pay the liens in the order they were recorded.

Answer 55

Taxes and Special Assessments

Question 56

Special Assessments
(City, County, Local):
States, counties, or even cities, using government powers can create specific and unique ______ that they can assess against real property for certain public projects.

Answer 56

Charges

Question 57

Special Assessments
(City, County, Local):
* A _______ may only be levied against parcels of real estate which have been identified as having received a direct and unique “benefit” from the public project.

Answer 57

Special Assessment

Question 58

Special Assessments (City, County, Local):
Failure to pay property special assessments can also lead to a _____ lien and foreclosure.

Answer 58

Tax

Question 59

Special Assessments (City, County, Local):
o Special assessments are charges that are levied against real property owners when new sewer lines, water lines, streets, or sidewalks are added.
o These special assessments are only levied against those who ______ from the specific use of whatever improvements are being made.

Answer 59

benefit

Question 60

Special Assessments (City, County, Local):
o Many new communities have special assessments added to the developer costs and are passed onto the end buyer.
o CFD’s = ______

Answer 60

Community Facility District

Question 61

Special Assessments (City, County, Local):
* Community Facility District’s are areas where the developer is passing onto the buyer, the ______ of the schools, roads, police, fire, etc.
* Beware if you are showing new homes, you would/should ask if there is a CFD added to the price of the home!!

Answer 61

Costs

Question 62

_______:
* These liens are ‘SUPERIOR’ to the rights of the HEIRS to the estate (govt, creditors get paid 1st) and can be attached to both the PROPERTY and PERSON.
IMPORTANT: * In these liens, remember, they take priority over other liens, no matter when the other liens were created or recorded.

Answer 62

Superior Liens

Question 63

Superior Liens:
_______:
(General + Involuntary + Statutory)
o These liens arise from court order or from a lawsuit.
o After a lien has been filed, a lien is placed on both personal and real property.
o If debtor fails to pay, a writ of attachment can be filed with the courts and the assets.
o (both personal and real) can be seized by the sheriff.

Answer 63

Judgement Liens

Question 64

Superior Liens:
_______:
(General + Involuntary + Statutory)
o Created by an act of law and are attached to personal and real property.
o Failure to pay taxes or penalties can result in an IRS lien.
o IRS liens are effective for a period of 10 years.
o Their priority is based again on the date of recording.

Answer 64

Income Tax Liens

Question 65

Superior Liens:
_______:
(General + Involuntary + Statutory)
o Creditors can place a lien against the estate of a deceased to recover debts owed by deceased.
o Federal and State can also lien the assets of the estate to ensure settlement of taxes.

Answer 65

Deceased Estate Liens

Question 66

Property Liens:
*_______:
(Specific + Voluntary)
o Mortgages are an example of a financing lien
o HELOC = Home Equity Line of Credit is a type of financing lien

Answer 66

Financing Liens

Question 67

Property Liens:
_______:
(Specific + Involuntary + Statutory)
o In Arizona, all property taxes are a “lien against the property” which isn’t recorded.
o Both property taxes and city/state/county special assessments take FIRST priority over all other property liens and are always first to be paid.

Answer 67

Property Tax Liens

Question 68

Property Liens:
Property Tax Liens:
o Remember, nobody steps in front of the government when it comes time to getting paid.
o Taxes pay for services provided by the government (Schools, Fire, Police, good for all).
o ______ are levied against a homeowner(s) who will benefit from the improvements (curbs, sidewalks, new street lights, etc).

Answer 68

Special Assessments

Question 69

Property Liens:
______:
(Specific + Involuntary + Equitable)
o Justification = Is filed for the non-payment of labor already performed on a property or for job site materials that were used during the construction of the property by a contractor or sub-contractor.

Answer 69

Mechanics Liens

Question 70

Property Liens:
Mechanics Liens:
(Specific + Involuntary + Equitable)
Who has the lien right? - In Arizona, it is legal for either a general contractor or a subcontractor to file a ______.

Answer 70

Mechanics Lien

Question 71

Property Liens:
Mechanics Liens:
(Specific + Involuntary + Equitable)
Pre-lien Notices - A ______-day notice must be given to the owner, general contractor, or lender, prior to the lien being filed (Actual Notice Given).

Answer 71

20-Day

Question 72

Property Liens:
Mechanics Liens:
(Specific + Involuntary + Equitable)
o What does a mechanic’s lien attach to – ______ where work was performed.

Answer 72

Real Property

Question 73

Property Liens:
Mechanics Liens
(Specific + Involuntary + Equitable)
o Priority of Mechanic’s Liens – priority is in the order of “_______”.

Answer 73

Which They Were Recorded

Question 74

Property Liens:
Mechanics Liens
(Specific + Involuntary + Equitable)
o Release of mechanic’s liens – A release must be recorded within ______ days of lien release.

Answer 74

20 Days

Question 75

Property Liens:
Mechanics Liens
(Specific + Involuntary + Equitable)
o Statutory rights/time periods - A 20-day notice must be given to the owner, general contractor, or lender, prior to the lien being filed (Actual Notice Given).
o Any mechanics lien to be filed by any contractor, must take place within 120 days of “job completion” (20 day notice + 100 days = ______ days total).

Answer 75

120 Days

Question 76

Like a mechanic’s lien, a Materialmen’s Lien acts to protect suppliers of material to a
home owner.
* Any type of material used in the construction, renovation, or reconstruction of a property that was delivered in good faith with the expectation of getting paid by the owner.
* Like a mechanics lien, a 20-day notice must be given to the owner of the property, giving them actual notice of a pending lien.
* $1,000 is the MINIMUM amount of a materialman lien.

Answer 76

20-Day

Question 77

Who Can Not File Mechanics Liens?
* A ______ supplying materials to another supplier.

Answer 77

Supplier

Question 78

Who Can Not File Mechanics Liens?
* A subcontractor to a ______

Answer 78

Subcontractor

Question 79

Who Can Not File Mechanics Liens?
* ______ contractors - if a license was required to do the work performed.

Answer 79

Unlicensed

Question 80

Who Can Not File Mechanics Liens?
* If unable to provide _____ of the required 20 day notice.

Answer 80

Proof

Question 81

Who Can Not File Mechanics Liens?
* If ______ written agreement or receipt of work can be furnished.

Answer 81

No

Question 82

Who Can Not File Mechanics Liens?
* NOTE: a licensed contractor is REQUIRED to be used in Arizona when the job scope is over $_____.

Answer 82

$1000

Question 83

How Liens Affect Primary Title Reports?
* During the initial phases of the purchase and transfer of ownership the escrow company will do a preliminary title search where they look for liens and other
encumbrances.
* If a lien or encumbrance is found, it is made ______ to all parties and the seller or
owner of the lien has the right to satisfy the lien/encumbrance.
* If the lien isn’t satisfied, the escrow company can NOT offer a title insurance policy for the buyer.

Answer 83

Evident

Question 84

All liens are an encumbrance, but not all encumbrances are ______

Answer 84

Liens

Question 85

A utility company has a (an) ______________ that runs through your property.

Answer 85

Easement

Question 86

Which of the following would NOT be a way to end an easement?

Agreed upon release

Non-Use

Additional parties using the easement

Destruction

Answer 86

Additional parties using the easement

Question 87

Which of these is NOT a type of easement?

Easement in Gross

Easement Appurtenant

Easement in Monetary

Easement by Necessity

Answer 87

Easement in Monetary

Question 88

What negative effects can an encumbrance have on a property’s value?

Answer 88

Encumbrance is something that could affect the transferability of the property but is not always a negative, but, like a lien or a HOA, some owners don’t want these types of encumbrances and so it is harder to sell or convey.

Question 89

Is a lien always an encumbrance? Is an encumbrance always a lien?

Answer 89

A lien is always an encumbrance, a financial encumbrance, but not all encumbrances are liens – think of an HOA CC&R’s.

Question 90

Give one example of how an easement can be created…

Answer 90

Voluntary, By Law, By Prescription, By Necessity or in some cases by continuous use

Question 91

Give one example of how an easement can be ended…

Answer 91

Abandonment, Law, Recission by Grantor are examples of how it can be terminated.

Question 92

An Easement is what type of encumbrance?

Voluntary

Involuntary

Voluntary or Involuntary

Beneficial to all

Answer 92

Voluntary or Involuntary

Question 93

A change in zoning directly across the street would be a potential :

Non-Monetary Encumbrance

Choice Monetary Encumbrance

Potential Encumbrance

Zoning Encumbrance

Answer 93

Potential Encumbrance

Question 94

Which of the following would most likely hinder the transfer of clear title to a property in a community?

HOA CCR’s

Utility Company Easement

Cities special assessments

A homeowners back tax lien

Answer 94

A homeowners back tax lien

Question 95

A non-court ordered easement by prescription must be __________, __________ and ___________ to be legally recognized?

Legal, allowed and recognized

Open, Official and Recognized

Visible, Open and Notorious

Visible, Recorded and Acknowledged

Answer 95

Visible, Open and Notorious

Question 96

Informational Point: If you own a house, land or property, you can look up the deed most likely in the county recorders office or online for free. In the deed, you will find any reservations or restrictions! Most often, homes in a community have a restriction that says oil, gas, minerals etc if found in the ground belong to the _____!! Fun to read, better to look like a super genius when you tell your clients this!

Answer 96

Developer

Question 97

True or False: An HOA can foreclose on a homeowner for failing to pay fines.

True

False

Answer 97

This is false. They can only foreclose on a homeowner if they don’t pay their DUES or assessments!!

Question 98

Clouds:
Additional clouds as we talked about earlier were gaps in the ownership, or a death within a marriage, where the remaining spouse sold and a _____ certificate was never found or recorded.
* This is a cloud as in Arizona, you need both spouses to sign the deed to sell! You will learn more about that later!

Answer 98

Death

Question 99

Monetary Encumbrances:
Remember: All liens are an ____, but not all encumbrances are liens.

Answer 99

Encumbrance

Question 100

Liens:
Liens always represent a monetary ______ that someone else has in your property.

Answer 100

Interest

Question 101

Give an example of a type of Deed Restriction?

Answer 101

Deed restrictions could be made by owner/developer/CCR etc. A building height, land use, ownership of minerals, property use types, type of construction material used, these are all types of Deed Restrictions.

Question 102

What is the difference between Deed Restrictions and CC&Rs?

Answer 102

A deed restriction is something written into the deed that restricts someone from doing something, like building a two story home or more common, accessing minerals, oil or gold below the ground (those mineral rights are restricted and retained by the previous owners). For the CC&R’s, these conditions, covenants and Restrictions effect every house or property in the entire community.

Question 103

A neighbor builds a new roof for their pool shed and it overhangs into your property. Why would it be considered wise to enforce your legal rights to have the shed roof modified in a timely fashion?

Answer 103

Failure to asserts one’s rights in a timely fashion lessons the ability to enforce rules in the future this is known as latches.

Question 104

The neighbor failed to pay their contractor for modifying the shed roof leading the contractor to file a mechanics lien against the property. Should the owner try and sell the house without first terminating that encumbrance, what will appear during a title search?

Answer 104

A lien would show up as an encumbrance and would need to be satisfied before the deed could transfer freely, or the title insurance company would not put insurance on the property.

Question 105

A title policy underwriter discovers a defect in the chain of title and they can’t seem to find where a previous owner ever signed the deed to the current owner. This defect would cause what potential action?

A cloud was found and can be easily cleared by the title company

A title policy most likely won’t be issued

The new buyers of the property would need to clear the defect

A title policy could be issued but would have a defect note

Answer 105

A title policy most likely won’t be issued

Question 106

HOA CC&R’s are considered an:

Entitlement

Encumbrance

Escheat

Easement

Answer 106

Encumbrance

Question 107

A buyer moves into their new home then are served by papers to pay a lien from a previous contractor that worked on the house 2 years ago. What should the owner do?

Pay the lien immediately

File a delay of action in court

Refer this to their title insurance policy

Arbitrate through the Board of Contractors in Arizona

Answer 107

Refer this to their title insurance policy

Question 108

Which of the following would most likely hinder the transfer of clear title to a property in a community?

HOA CCR’s

Utility Company Easement

Cities special assessments

A homeowners back tax lien

Answer 108

A homeowners back tax lien

Question 109

A neighbor’s trees are hanging over the fence line in the backyard. The offended homeowner has complained to the HOA but they can’t help as this is not an HOA issue. The HOA referred the owner to file a complaint against the neighbor due to what action?

Involuntary Alienation

Agreement Violation

CC&R Violation

Encroachment

Answer 109

Encroachment

Question 110

An HOA can foreclose for failure to pay dues or assessments but the minimum owed must be at least how much?

$1200

$900

$500

$280

Answer 110

$1200

Question 111

HOA’s may not be able to enforce the illegal paint color change on a property that was sold 2 years ago due to what?

Latches

Fault

Languish

Statute of Limitations

Answer 111

Latches

Question 112

CC&R violations discovered by an escrow company would be?

Encumbrance

Chattel

General Lien

Voluntary Cloud on Title

Answer 112

Encumbrance

Question 113

What would a potential lien be for someone who failed to pay their income taxes?

A.The failure to pay taxes would most likely result in a lien against both your home and personal assets like cars, bank accounts or even job wages.
B. This would be a case where the IRS could only garnish your wages in an attempt to collect on the debt.

Answer 113

The failure to pay taxes would most likely result in a lien against both your home and personal assets like cars, bank accounts or even job wages.

Question 114

A property owner fails to pay their real estate property taxes and a statutory lien is place on the property. What type of encumbrance is this?

Answer 114

This is a monetary, judicial, involuntary lien.

Question 115

Liens are paid first in time, first in line with two exceptions. What is one of these exceptions?

Answer 115

Property Taxes and Government Liens are always paid before anyone else.

Question 116

Who is the Lienee? Who is the Lienor?

Answer 116

The Lienor is the “giv-or” of the lien, or the person who is owed money while the Lienee is the “receiv-ee” of the lien and owes that money.

Question 117

When would an owner voluntarily agree to have a lien placed on their property?

Answer 117

When the owner needs a mortgage, deed of trust or otherwise wants to allow someone voluntarily to lien the property usually to borrow against.

Question 118

Governments can levy liens against a deceased person’s estate. These are:

Voluntary

Creditor Liens

Statutory

Recorded at time of death

Answer 118

Statutory

Question 119

Which of the following is a voluntary lien?

Mechanics Lien

Common Lien

Mortgage

Income Tax Lien

Answer 119

Mortgage

Question 120

The IRS has the power to lien both personal and real property. This is what type of encumbrance?

General, Involuntary, Statutory

General, specific, involuntary

Specific but involuntary

General but involuntary

Answer 120

General, Involuntary, Statutory

Question 121

The city and state have been provided the power to encumber your property by taxing the owner of each parcel of land. Even the smallest parcel of land is taxed. What type of encumbrance is this?

Specific and Voluntary

Specific and Involuntary

Specific, Voluntary and Statutory

General, Involuntary and Statutory

Answer 121

Specific and Involuntary

Question 122

A non-court ordered easement by prescription must be __________, __________ and ___________ to be legally recognized?

Legal, allowed and recognized

Open, Official and Recognized

Visible, Open and Notorious

Visible, Recorded and Acknowledged

Answer 122

Visible, Open and Notorious

Question 123

By agreeing to take out a Home Equity Line Of Credit (HELOC) on their home, the owners allowed the lender to place what on their title?

A recorded promissory note

A due on sale clause

A voluntary specific lien

A copy of the lien release due date

Answer 123

A voluntary specific lien

Question 124

Property Liens are specific to ONE property.

Question 125

Property Liens:
Mechanics Liens:
(Specific + Involuntary + Equitable)
These are the types of mechanics/contractors that can file a lien legally:
- direct contractors
- subcontractors
- material suppliers
- equipment _______
- laborers - in some cases

Answer 125

Lessors

Question 126

Which of these is NOT a superior lien…

Income Tax Lien

Non Judgement Lien

Financing Lien

Deceased Estate Lien

Answer 126

Non-Judgement Lien

Question 127

IMPORTANT! A lien is encumbering the title - this means that someone somewhere has a claim to the title - not the _____. You can still sell or convey the property, but the lien most likely will follow the deed to the new owner/buyer!

Answer 127

Deed

Question 128

Can a lien be applied for multiple reasons?

Answer 128

Yes, for example Judgement Liens, Income Tax Liens, and Deceased Estate Liens.

Question 129

Who can file a Mechanics Lien in Arizona?

Answer 129

In Arizona, it is legal for either a general contractor or a subcontractor to file a mechanics lien.

Question 130

Does a notice have to be given to the owner/entity that the mechanic’s lien is being placed on? If so, how much notice?

Answer 130

Yes, a 20-day notice must be given to the owner, general contractor, or lender, prior to the lien being filed (Actual Notice Given).

Question 131

If a preliminary title search reveals a Cloud on Title and the encumbrance is not satisfied by the seller, what will the title company NOT be able to provide? How will this effect a buyer’s ability to secure a loan?

Answer 131

If a lien or encumbrance is found, it is made evident to all parties and the seller or owner of the lien has the right to satisfy the lien/encumbrance. If the lien isn’t satisfied, the escrow company most likely won’t offer a title insurance policy for the buyer.

Question 132

Property taxes, mechanics lien, mortgage lien; which comes first?

None, IRS liens come first

Mechanics Lien

Mortgage LIen

Property Taxes

Answer 132

Property Taxes

Question 133

A lumber yard didn’t get paid from the framing contractor who was hired by the General Contractor. They have how long to file a lien on the property where the material was used?

They can’t file a lien as a supplier of materials used on a job

90 days from when the material was dropped on the site

90 days from the date the work started

90 days after the invoice was first sent

Answer 133

They can’t file a lien as a supplier of materials used on a job

Question 134

Landlocked property must be granted an easement and is known as the:

Dormant Tenement

Dominant Tenement

Divisive Tenement

Disputed Tenement

Answer 134

Dominant Tenement