Types of Encumbrances Flashcards
any claim or lien on the property held by another person or entity that limits the owner’s use or
rights or decreases the value of the property
encumbrance
A lien due to a court decree resulting from a lawsuit
Judgment Lien
A legal notice that a lawsuit is pending that affects the title of a property. This serves as warning to prospective buyers that a pending lawsuit could impact title.
Lis Pendens
The IRS will file this against all property belonging to that person for various taxes owed and unpaid.
Income Tax Liens
Created by the property owner or with the property owner’s consent
Voluntary Lien
When a property owner doesn’t pay for work that was performed the worker can file this lien to collect the money owed to them.
Mechanic’s Lien
A lien created without the property owner’s consent (e.g., property tax lien or mechanic’s lien)
Involuntary Lien
Claims against a person and all of that person’s property. This type of lien occurs as a judgment against that person.
General Lien
Claims against a specific property, identifiable property (the most common type of this lien is a mortgage)
Specific (or special) lien
A lien created on the property used as collateral for a loan to purchase a home
Mortgage Lien
When an owner does not pay property taxes a lien is levied against that property
Property Tax Lien
When liens are given priority based on when they’re filed
First in time, first in right
Which lien takes top priority
assessments and tax liens
certain kinds of liens automatically go to the head of the line regardless of when they were filed. i.e.: HOA related liens
Super lien states
A lien holder will agree to modify the order of priority.
subordination agreement
If there’s not enough to pay off all lien holders, the owner will lose the property and owe the lien holders.
deficiency judgment
a type of encumbrance that can affect the usage of a property
Easements
The permanent right to use another’s land for the benefit of a neighbor.
Easement appurtenant
A right to use the land (does not necessarily involve an adjoining property). Examples would be
utility lines.
Easement in gross
What are the two main categories of easements?
Easement appurtenant and Easement in gross
What are the two main types of easements:
Easement by necessity and Easement by prescription:
This is an easement acquired through years of use-one person acquires the permanent right
to use another’s property by doing so for a period of time. Use must be hostile, open, exclusive, and notorious.
Easement by prescription
Usually this involves access to a road; without such an easement, the owner requiring the right
of passage would be landlocked.
Easement by necessity
right to cross neighbor’s property to access the road.
dominant tenement
The owner who gives the right to cross to neighbor
servient tenement
This type of easement is terminated when the reason for the easement no longer exists, such as when a new road is built that reaches a previously landlocked parcel.
Easement by necessity
Shared between two buildings and constructed on the boundary line between two owner’s lots
Party Wall
Rights to occupy the property
Possessory
When a building, shrub, fence, etc., illegally crosses over into another’s property. Can lead to a claim of adverse possession or an easement by prescription.
Encroachment
Not classified as an encumbrance, this is a temporary right to enter the land or use property belonging to another for a specific purpose.
License
Easements fall into this category
Non-Possessory
Ways an easement can be terminated
The easement owner may release the easement if it is no longer needed
A dominant and servient land could be merged into one parcel
The easement owner could abandon the easement
The necessity of an easement by necessity could be terminated (e.g., by building a new access road for the dominant
tenement)
An easement with a deadline could expire
permission to do something on another’s land without actually possessing any interest or ownership in the land.
license
To enter
Ingress
To exit
Egress
