section 5 encumbrances and liens

Question 1

Easements and encroachments are types of
a. lien.
b. deed restriction.
c. encumbrance.
d. appurtenance.

Answer 1

c. encumbrance.

Question 2

An affirmative easement gives the benefited party
a. the right to possess a defined portion of another’s real property.
b. the right to prevent the owner of a real property from using it in a defined way.
c. the right to a defined use of a portion of another’s real property.
d. the right to receive a portion of any income generated by another’s real property.

Answer 2

c. the right to a defined use of a portion of another’s real property.

Question 3

There are two adjoining properties. An easement allows property A to use the access road that belongs to property B. In this situation, property A is said to be which of the following in relation to property B?
a. Subservient estate
b. Servient estate
c. Senior tenant
d. Dominant tenement

Answer 3

d. Dominant tenement

Question 4

Which of the following describes a situation in which an easement might be created against the wishes of the property owner?
a. The property has been continuously used as an easement with the knowledge but without the permission of the owner for a period of time.
b. The owner of an adjoining property asks the property owner for an easement, is refused, and then uses the property anyway without the knowledge of the owner.
c. The owner of an adjoining property decides he needs to widen his driveway by sharing his neighbor’s driveway and sues in court to create an easement by necessity.
d. The owner of an adjoining property grants an easement to a third party that includes an easement on the first property.

Answer 4

a. The property has been continuously used as an easement with the knowledge but without the permission of the owner for a period of time.

Question 5

What is the primary danger of allowing an encroachment?
a. An encroachment automatically grants the benefiting party an easement.
b. The encroached party may be liable for additional real estate taxes to cover the area being encroached upon by the neighboring property.
c. Over time, the encroachment may become an easement by prescription that damages the property’s market value.
d. An encroachment creates a lien.

Answer 5

c. Over time, the encroachment may become an easement by prescription that damages the property’s market value.

Question 6

A property owner who is selling her land wants to control how it is used in the future. She might accomplish her aim by means of
a. an injunction.
b. a deed restriction.
c. an easement.
d. a land trust.

Answer 6

b. a deed restriction.

Question 7

What distinguishes a lien from other types of encumbrance?
a. It involves a monetary claim against the value of a property.
b. It lowers the value of a property.
c. It is created voluntarily by the property owner.
d. It attaches to the property rather than to the owner of the property.

Answer 7

a. It involves a monetary claim against the value of a property.

Question 8

A certain property has the following liens recorded against it: a mortgage lien dating from three years ago; a mechanic’s lien dating from two years ago; a real estate tax lien for the current year; and a second mortgage lien dating from the current year. In case of a foreclosure, which of these liens will be paid first?
a. First mortgage lien
b. Mechanic’s lien
c. Real estate tax lien
d. Second mortgage lien

Answer 8

c. Real estate tax lien

Question 9

The lien priority of junior liens can be changed by a lienor’s agreement to
a. forgive portions of the debt.
b. assign the note.
c. foreclose on the note.
d. subordinate.

Answer 9

d. subordinate.

Question 10

Among junior liens, the order of priority is generally established according to
a. the date of recordation.
b. the amount.
c. the order of disbursement.
d. special agreement among lienees.

Answer 10

a. the date of recordation.

Question 11

what is meant by a “lien-theory” state?
a. A state in which liens are given priority over other encumbrances
b. A state in which a mortgagor retains title to the property when a mortgage lien is created
c. A state in which the holder of a mortgage lien receives title to the mortgaged property until the debt is satisfied
d. A state in which liens exist in theory but not in practice

Answer 11

b. A state in which a mortgagor retains title to the property when a mortgage lien is created

Question 12

A homeowner has hired a contractor to build a room addition. The work has been completed and the contractor has been paid for all work and materials but fails to pay the lumber yard for a load of lumber. What potential problem may the home owner experience?
a. The contractor may place a mechanic’s lien for
the amount of the lumber against the homeowner’s real property.
b. The lumber yard may place a vendor’s lien against the contractor and the homeowner for the amount of the lumber.
c. The lumber yard may place a mechanic’s lien for the amount of the lumber against the homeowner’s real property.
d. The homeowner has no liability because the contractor was paid for the lumber.

Answer 12

c. The lumber yard may place a mechanic’s lien for the amount of the lumber against the homeowner’s real property.

Question 13

The process of enforcing a lien by forcing sale of the lienee’s property is called
a. execution.
b. attachment.
c. foreclosure.
d. subordination.

Answer 13

c. foreclosure

Question 14

An important difference between a judicial foreclosure and a non-judicial foreclosure is
a. there is no right to redeem the property in a non-judicial foreclosure.
b. a judicial foreclosure forces a sale of the property.
c. a non-judicial foreclosure ensures that all liens are paid in order of priority.
d. the lienor receives title directly in a non-judicial foreclosure.

Answer 14

a. there is no right to redeem the property in a non-judicial foreclosure.

Question 15

A defaulting borrower may avoid foreclosure by giving the mortgagee
a. a promissory note.
b. a deed in lieu of foreclosure.
c. a redemption notice.
d. a lis pendens.

Answer 15

b. a deed in lieu of foreclosure.

Question 16

a property survey reveals that a new driveway extends one foot onto a neighbor’s property. This is an example of
a. a easement appurtenant.
b. an encroachment.
c. an easement by prescription.
d. a party wall easement.

Answer 16

b. an encroachment.

Question 17

A property owner has an easement appurtenant on her property. When the property is sold to another party, the easement
a. terminates.
b. transfers with the property.
c. transfers with the owner to a new property.
d. becomes a lien on the property.

Answer 17

b. transfers with the property.

Question 18

A brick fence straddles the property line of two neighbors. The neighbors agree not to damage it in any way. This is an example of
a. a party wall.
b. an encroachment.
c. a trade fixture.
d. a deed restriction.

Answer 18

a. a party wall.

Question 19

A property owner allows Betty Luanne to cross his property as a shortcut to her kindergarten school bus. One day the property owner dies. What right was Betty given, and what happens to it in the future?
a. A personal easement in gross, which continues after the owner’s death
b. An easement by prescription, which continues after the owner’s death
c. A license, which continues after the owner’s death
d. A license, which terminates at the owner’s death

Answer 19

d. A license, which terminates at the owner’s death

Question 20

A court renders a judgment which authorizes a lien to be placed against the defendant’s house, car, and personal belongings. This is an example of a
a. specific judgment lien.
b. general judgment lien.
c. voluntary judgment lien.
d. superior judgment lien.

Answer 20

b. general judgment lien.

Question 21

An interest, right or intrusion that limits the freehold interest of an owner of real property or otherwise adversely effects the marketability of title

Answer 21

encumbrance

Question 22

An easement appurtenant gives a property owner a right of usage to portions of an adjoining property owned by another party.

Answer 22

Easement Appurtenant:

Question 23

The property that benefits from the existence of an easement appurtenant. The holder of the easement is the dominant tenant.

Answer 23

Dominant Tenement:

Question 24

An easement appurtenant gives a property owner a right of usage to portions of an adjoining property owned by another party. The property enjoying the usage right is
called the dominant tenement, or dominant estate.

Answer 24

Dominant Estate:

Question 25

A property containing an easement that must “serve” the easement use belonging to a dominant tenement.

Answer 25

Servient Tenement:

Question 26

An easement by necessity is an easement appurtenant granted by a court of law to a property owner because of a circumstance of necessity, most commonly the need for access to a property. Since property cannot be legally landlocked, or without legal access to a public thoroughfare, a court will grant an owner of a landlocked property an easement by necessity over an adjoining property that has access to a thoroughfare. The landlocked party becomes the dominant tenement, and the property containing the easement is the servient tenement.

Answer 26

Easement by Necessity:

Question 27

An easement in gross is a personal right that one party grants to another to use the grantor’s real property. The right does not attach to the grantor’s estate. It involves only one property, and, consequently, does not benefit any property owned by the easement owner. There are no dominant or servient estates in an easement in gross. An easement in gross may be personal or commercial.

Answer 27

Easement in Gross:

Question 28

If someone uses another’s property as an easement without permission for a statutory period of time and under certain conditions, a court order may give the user the easement right by prescription, regardless of the owner’s desires.

Answer 28

Easement by Prescription:

Question 29

A power of a government entity to force the sale of private property for subsequent public use

Answer 29

Eminent Domain:

Question 30

An unauthorized physical intrusion of one’s real property into the real property of another.

Answer 30

Encroachment:

Question 31

An individual’s personal right to use the property of another for a specific purpose. Revocable at any time at the owner’s discretion. Does not attach to the property and terminates upon the death of either party.

Answer 31

License:

Question 32

A provision in a deed that limits or places rules on how the deeded property may be used or improved.

Answer 32

Deed Restriction:

Question 33

Deed restrictions are either covenants or conditions. A condition can only be created within a transfer of ownership. If a condition is later violated, a suit can force the owner to forfeit ownership to the previous owner.

Answer 33

Condition:

Question 34

Deed restrictions are either covenants or conditions. A covenant can be created by mutual agreement. If a covenant is breached, an injunction can force compliance or payment of compensatory damages.

Answer 34

Covenant:

Question 35

A creditor’s claim against real or personal property as security for a property owners debt. A lien enables a creditor to force the sale of the property and collect proceeds as payment toward the debt.

Answer 35

lien

Question 36

The creditor who places a lien on a property is called the lienor.

Answer 36

lienor

Question 37

The debtor who owns the property is the lienee.

Answer 37

lienee

Question 38

The order in which liens against a property are satisfied; the highest priority lien receives

sale proceeds from a foreclosure before any other lien.

Answer 38

lien priority

Question 39

A voluntary or involuntary placing of a lien’s priority below that of another. A mortgage lien, for example automatically subordinates to a real estate tax lien.

Answer 39

Subordination:

Question 40

A procedure for forcing sale of a secured property to satisfy a lienholder’s claim.

Answer 40

Foreclosure:

Question 41

A right granted through a loan clause enabling the lender to call all sums immediately due and payable on a loan should the borrower violate certain provisions of the loan agreement.

Answer 41

Acceleration:

Question 42

A public notice in a foreclosure proceeding that the mortgaged property may soon have a judgment issued against it. Enables other investors to join in the proceeding it they wish to collect their debts.

Answer 42

Lis Pendens: