Unit 10 Flashcards
Identify the limitations on ownership rights that are imposed by government action.
Government actions, such as police power, eminent domain, taxation, and escheat, limit ownership rights to ensure public welfare and development. These limitations can reduce or terminate private ownership rights for societal benefit.
- Describe the various estates in land, including homesteads, and the rights and limitations they convey.
Estates in land range from freehold estates to leasehold estates, each offering specific rights to possess, use, or transfer property. Homestead laws provide additional protections for primary residences in Texas.
List the nine lien rights that are foreclosable against Texas homesteads.
Foreclosable liens in Texas include property tax liens, purchase money liens, mechanic’s liens, and others. These liens can threaten homesteads under certain conditions, emphasizing the importance of knowing how they apply.
Explain concepts related to encumbrances, including the creation and termination of easements.
Encumbrances such as easements and liens affect property value and use. Easements can be created through agreements, necessity, or prescription, and they terminate when the need no longer exists or parties agree to release them.
Distinguish among surface and groundwater rights in Texas.
Surface water rights in Texas are governed by riparian rights and prior appropriation, while groundwater rights follow the rule of capture, allowing landowners to extract water beneath their property but with legal restrictions on waste.
Distinguish between specific and general liens, voluntary and involuntary liens, statutory and equitable liens, and give examples of each.
Liens are categorized by their scope and nature, with specific liens affecting only one property and general liens affecting all property of the debtor. Voluntary liens, like mortgages, are agreed upon, while involuntary liens, like tax liens, arise by law.
Identify the process through which real estate taxes become delinquent and/or become a lien, the enforcement options, and the equitable and statutory rights of redemption.
Real estate taxes become a lien on January 1, and if delinquent, penalties and enforcement actions, including foreclosure, may follow. Property owners retain equitable and statutory redemption rights to recover their property after a tax sale.
Describe a tax lien and the key components in each of the four phases of the annual tax levy process, as well as the steps for levying special assessments.
Tax liens secure payments for ad valorem taxes, following a process that includes property valuation, protest, rate adoption, and collection. Special assessments fund public improvements that benefit specific properties.
Explain the various types of liens other than taxes and how they are prioritized to satisfy unpaid debts.
Non-tax liens, such as mechanic’s liens, judgment liens, and IRS liens, may attach to properties. Lien priority is often determined by the date of recording, with tax liens generally holding the highest priority.
Ad valorem tax
A tax based on the assessed value of real property, imposed by local governments for public services.
Appraisal review board
A group of citizens that hears disputes between property owners and appraisal districts over property tax appraisals.
Assessment roll
A public record listing all taxable properties and their assessed values for property tax purposes.
Allodial system
The system of land ownership in the United States under which individuals can own land outright, free from obligations to a monarch or government.
Defeasible fee estate
An estate that can be taken away if a specific condition is not met, resulting in a reversion to the grantor or a designated party.
Attachment
A legal process by which a court orders the seizure of property to ensure payment of a judgment or debt.
Determinable fee estate
A type of defeasible fee estate that automatically ends when a specific condition occurs.
Easement
A right to use another person’s land for a specific purpose, such as access or utility lines.
Easement appurtenant
An easement that benefits a specific parcel of land and transfers with the land when it is sold.
Easement by implication
An easement created when circumstances imply its necessity, such as access to a landlocked property.
Easement by necessity
An easement created by law to provide access to landlocked property.
Easement by prescription
An easement obtained through continuous, open, and adverse use of another’s property for a statutory period.
Equitable right of redemption
The right of a property owner to redeem their property by paying off debts before a foreclosure is finalized.
Easement in gross
An easement granted to benefit a person or entity, not tied to any specific parcel of land, such as utility company access.
Eminent domain
The government’s power to take private property for public use with compensation to the owner.
Equitable lien
A lien imposed by the court based on fairness, usually to secure payment for services or improvements made to a property.
Encroachment
An unauthorized intrusion of a structure or object onto another person’s property.
Encumbrance
A claim or liability on real property, such as a lien or easement, which can affect its value or use.
Escheat
The process by which property reverts to the state when the owner dies without legal heirs or a valid will.
Estate in land
The degree, nature, and extent of a person’s interest in real property.
Fee simple subject to a condition subsequent
An estate in which the grantor retains the right to reclaim the property if a specified condition is violated.
Federal judgment lien
A lien placed on a property as a result of an unpaid federal court judgment.
Estate taxes
Taxes levied on the estate of a deceased person before assets are distributed to heirs.
General lien
A lien that attaches to all of a debtor’s property, not just specific real estate.
Fee simple
The highest form of property ownership, providing full rights to use, sell, and transfer the property.
Feudal system
A system of land ownership where land is held in exchange for service to a monarch or governing authority.
Freehold estate
An interest in real property that includes the right to own and possess the property indefinitely, such as a fee simple or life estate.
General contractor
The individual or company responsible for managing a construction project and hiring subcontractors.
Financing statement
A legal document filed to secure a creditor’s interest in a debtor’s personal property, used in UCC filings.
Grantee
The person receiving title to real property through a deed.
Grantor
The person transferring title to real property through a deed.
Homestead
A legal status that protects a primary residence from certain creditors, with exemptions from forced sale under Texas law.
Groundwater rights
The right of landowners to extract and use groundwater from beneath their property, subject to state laws.
Inheritance taxes
Taxes imposed on property and assets inherited from a deceased person.
Involuntary lien
A lien placed on property without the owner’s consent, such as a tax lien or judgment lien.
IRS tax lien
A lien imposed by the Internal Revenue Service for unpaid federal taxes.
Judgment
A court ruling that creates a legal obligation to pay a debt, which can result in a lien against property.
License
A revocable right to temporarily use another person’s land for a specific purpose.
Lien
A legal claim against property used to secure the payment of a debt or obligation.
Life estate
An interest in real property that lasts for the lifetime of a designated individual, terminating upon their death.
Littoral rights
The rights of landowners to use water from lakes, seas, or oceans adjacent to their property.
Mechanic’s lien
A lien placed on property by a contractor or supplier for unpaid labor or materials used in the property’s improvement.
Mortgage (deed of trust or purchase money) lien
A voluntary lien on real property used to secure repayment of a loan, often used in the purchase of real estate.
Police power
The authority of the government to regulate property to protect public health, safety, and welfare.
Prior appropriation
A water rights doctrine that grants water rights to the first person to use water from a specific source for beneficial purposes.
Priority
The order in which liens or other claims on a property will be settled, typically determined by the date of recording.
Remainder interest
The interest that remains after the termination of a life estate or another temporary estate, typically passing to a remainderman.
Restriction
A limitation placed on the use of property, often found in zoning laws or deed restrictions.
Reversionary interest
An interest in property that returns to the original owner or their heirs after the termination of a temporary estate.
Right-of-way
A type of easement that allows one person to travel across another’s land.
Security agreement
A legal document used to secure a loan by placing a lien on personal property, often filed under the Uniform Commercial Code (UCC).
Riparian rights
The rights of landowners whose property borders a river or stream to use the water.
Specific lien
A lien that applies to a specific piece of property, such as a mortgage or mechanic’s lien.
Special assessment
A tax levied on specific properties to fund public improvements that benefit those properties, such as street repairs.
Statutory lien
A lien created by law, such as a tax lien or a mechanic’s lien.
Statutory right of redemption
The right of a property owner to redeem their property after a foreclosure sale, within a statutory period, by paying the owed amount.
Subcontractor
A contractor hired by the general contractor to perform specific tasks on a construction project.
Surety bail bond lien
A lien placed on a property to secure the payment of a bail bond, ensuring the defendant’s appearance in court.
Subordination agreement
An agreement that changes the priority of liens, allowing a later lienholder to take precedence over an earlier lienholder.
Tax lien
A lien placed on real property for unpaid property taxes.
Tax sale
The sale of property by a government entity to recover unpaid property taxes.
Uniform Commercial Code
A comprehensive set of business laws that regulate commercial transactions, including secured transactions involving personal property.
Taxation
The process by which government levies taxes on property to fund public services.
Vendee’s lien
A lien placed by a buyer to secure the return of money paid if the seller defaults on the contract.
Vendor’s lien
A lien placed by a seller to secure payment for the purchase price when a buyer defaults.
Voluntary lien
A lien placed on property with the owner’s consent, such as a mortgage.
Wage lien
A lien placed on property to secure payment for unpaid wages owed to employees.
Which of the following is an example of a government limitation on the rights of real property ownership?
A. Deed restriction
B. Police power
C. Mortgage lien
D. Easement
Answer: B. Police power
Explanation: Police power is the authority of government entities to regulate land use and enforce laws that protect public health, safety, and welfare. It includes zoning laws and building codes, making it a limitation on property rights.
An estate in land that includes the right to possess and use the property but not to own it is called
A. Fee simple estate
B. Leasehold estate
C. Life estate
D. Easement
Answer: B. Leasehold estate
Explanation: A leasehold estate grants the tenant the right to possess and use the property for a specified period, but ownership remains with the landlord.
A form of ownership that can be defeated if a certain condition is not met is called
A. Fee simple absolute
B. Fee simple defeasible
C. Life estate
D. Leasehold estate
Answer: B. Fee simple defeasible
Explanation: A fee simple defeasible estate allows ownership to revert back to the original owner or another party if a specified condition is violated or not met.
The right of a government body to take ownership of real estate for public use is called
A. Eminent domain
B. Police power
C. Escheat
D. Taxation
Answer: A. Eminent domain
Explanation: Eminent domain is the power of the government to take private property for public use, with just compensation to the owner, typically for infrastructure or development projects.
Which of the following is a lien on real estate?
A. Easement
B. Encroachment
C. Mortgage
D. License
Answer: C. Mortgage
Explanation: A mortgage is a voluntary lien that secures a loan using the property as collateral. The lender has a financial interest in the property until the loan is paid off.
A landowner sells one acre of land to a buyer. The buyer gains access to the land by walking across the landowner’s remaining 40 acres. The buyer has
A. An easement in gross
B. A license
C. An easement by prescription
D. An easement appurtenant
Answer: D. Easement appurtenant
Explanation: An easement appurtenant benefits a particular parcel of land and allows access across another parcel (the servient estate). It “runs with the land,” transferring with the property.
A license is an example of
A. An encumbrance that runs with the land
B. A personal privilege
C. A right of ownership
D. A governmental limitation
Answer: B. A personal privilege
Explanation: A license is a revocable, temporary permission granted to someone to use another person’s property. It does not transfer with the land and can be revoked at any time.
Which of the following is NOT a government power?
A. Escheat
B. Eminent domain
C. Deed restriction
D. Police power
Answer: C. Deed restriction
Explanation: Deed restrictions are private limitations placed on a property by the owner or developer, not by the government. They are used to control land use within subdivisions or developments.
Which of the following is an encumbrance on real estate?
A. Easement
B. Fixture
C. Estate
D. Fixture lien
Answer: C. Estate
Explanation: An encumbrance is any claim, right, lien, or liability attached to real property that may affect its use or value. Estates can have encumbrances like easements or liens.
Which of the following liens usually would be given the highest priority in disbursing funds from a foreclosure sale?
A. Mortgage dated last year
B. Real estate taxes due
C. Judgments issued by the court
D. Mechanic’s lien for work started before the mortgage was made
Answer: B. Real estate taxes due
Explanation: Property tax liens take priority over most other liens because they ensure that local governments can collect taxes to fund public services, even before other financial obligations like mortgages.
The term “estate” refers to
A. The amount of land that is owned
B. The nature and extent of ownership rights
C. A claim against property by a creditor
D. A legally recognized relationship between the government and a private landowner
Answer: B. The nature and extent of ownership rights
Explanation: An estate refers to the legal interest a person holds in real property, determining their rights to possess, use, and transfer the property.
In a land trust, the beneficiary is usually also the
A. Trustee
B. Fiduciary
C. Attorney-in-fact
D. Trustor
Answer: C. Attorney-in-fact
Explanation: In land trusts, the beneficiary retains control over the property and often appoints an attorney-in-fact to act on their behalf, while the trustee holds legal title.
The reversion of property to the state or county when a person dies intestate and without heirs is called
A. Eminent domain
B. Escheat
C. Taxation
D. Reverter
Answer: B. Escheat
Explanation: Escheat is the legal process by which property reverts to the state when a property owner dies without a will and without legal heirs to inherit the property.
Which of the following easements is created by continuous, open, and notorious use of the property without the owner’s permission?
A. Easement by necessity
B. Easement in gross
C. Easement by prescription
D. Easement appurtenant
Answer: C. Easement by prescription
Explanation: An easement by prescription is acquired through continuous, open, and adverse use of another’s property for a statutory period, usually 10 years in Texas, without the owner’s permission.
A person who has the legal right to enter and use the land of another but does not own the land has
A. An easement
B. An estate
C. A lease
D. An encumbrance
Answer: A. An easement
Explanation: An easement grants the holder the right to use another person’s land for a specific purpose, such as access, without transferring ownership.
An encumbrance is
A. A claim or charge on a property
B. An estate in real property
C. A right of government to acquire property
D. An easement granted to a utility company
Answer: A. A claim or charge on a property
Explanation: An encumbrance is a claim or liability on the property, such as a lien, easement, or restriction, that can limit the owner’s use or transfer of the property.
Property taxes are
A. The highest priority lien
B. A general lien
C. A voluntary lien
D. A judgment lien
Answer: A. The highest priority lien
Explanation: Property taxes have priority over all other liens because they are necessary to fund essential services like schools and roads. They are always paid first in a foreclosure sale.
A right acquired by one party to use the land of another is called
A. Encroachment
B. Escheat
C. Easement
D. Estoppel
Answer: C. Easement
Explanation: An easement is the legal right to use another’s land for a specific purpose, such as accessing a driveway or installing utility lines.
An easement is a type of
A. License
B. Encumbrance
C. Lien
D. Attachment
Answer: B. Encumbrance
Explanation: An easement is considered an encumbrance because it limits the owner’s full use of the property by granting certain rights to others.
Which of the following is NOT a characteristic of a fee simple estate?
A. The estate terminates upon death
B. It is of indefinite duration
C. The estate can be inherited
D. The estate cannot be defeated
Answer: A. The estate terminates upon death
Explanation: A fee simple estate is of indefinite duration and can be inherited. It does not terminate upon the owner’s death, unlike a life estate.
All of the following are examples of specific liens EXCEPT
A. Mechanic’s liens
B. Real estate tax liens
C. Judgment liens
D. Mortgage liens
Answer: C. Judgment liens
Explanation: Judgment liens are general liens that apply to all of a debtor’s property, whereas mechanic’s liens, real estate tax liens, and mortgage liens are specific liens that apply only to a particular property.
A property tax lien is classified as
A. A general lien
B. A specific lien
C. A judgment lien
D. An involuntary lien
Answer: B. A specific lien
Explanation: A property tax lien is a specific lien because it attaches only to the property on which the taxes are owed, rather than to the property owner’s other assets.
Which of the following is a specific lien?
A. Judgment lien
B. Mortgage lien
C. Mechanic’s lien
D. Real estate tax lien
Answer: D. Real estate tax lien
Explanation: A real estate tax lien is a specific lien because it applies to a specific piece of real estate for unpaid taxes, unlike general liens like judgment liens that apply to all property owned by a debtor.
Which of the following types of liens does NOT need to be recorded to be valid?
A. Judgment lien
B. Mechanic’s lien
C. Real estate tax lien
D. Mortgage lien
Answer: C. Real estate tax lien
Explanation: Real estate tax liens automatically attach to the property when taxes are unpaid. They do not need to be recorded to be valid because they are imposed by law.
The right of escheat allows the state to acquire property
A. When it is needed for public use
B. Through condemnation
C. When the owner dies without a will or heirs
D. By eminent domain
Answer: C. When the owner dies without a will or heirs
Explanation: Escheat allows the government to acquire property from an owner who dies without a will and without legal heirs, ensuring the property does not remain ownerless.
Which of the following is classified as a general lien?
A. Mechanic’s lien
B. Mortgage lien
C. Judgment lien
D. Real estate tax lien
Answer: C. Judgment lien
Explanation: A judgment lien is a general lien because it applies to all of a debtor’s real and personal property, not just a specific piece of real estate.
An easement by prescription may be claimed by a person who uses another’s land for the statutory period, which in Texas is
A. One year
B. Five years
C. Ten years
D. Twenty years
Answer: C. Ten years
Explanation: In Texas, an easement by prescription can be claimed after 10 years of continuous, open, and adverse use of another’s property without permission.
Which of the following is a specific lien?
A. Judgment lien
B. Mortgage lien
C. Mechanic’s lien
D. Real estate tax lien
Answer: D. Real estate tax lien
Explanation: Real estate tax liens are specific liens because they attach only to the particular property on which the taxes are owed.
If the dominant estate merges with the servient estate, what happens to the easement?
A. It runs with the dominant estate
B. It runs with the servient estate
C. It terminates
D. It must be renegotiated
Answer: C. It terminates
Explanation: When the dominant and servient estates merge under the same ownership, the easement is no longer necessary and terminates automatically.
Which of the following is a general lien?
A. Real estate tax lien
B. Judgment lien
C. Mechanic’s lien
D. Mortgage lien
Answer: B. Judgment lien
Explanation: Judgment liens apply to all of a debtor’s real and personal property, unlike specific liens such as tax liens or mortgage liens that apply to a particular piece of property.
A property owner who has the legal right to enter and use the land of another but does not own the land has
A. A license
B. An estate
C. An easement
D. An encroachment
Answer: C. An easement
Explanation: An easement grants the holder a legal right to use someone else’s land for a specific purpose, such as accessing a driveway, without transferring ownership.
What type of estate terminates upon the death of the life tenant?
A. Fee simple defeasible
B. Life estate
C. Leasehold estate
D. Easement
Answer: B. Life estate
Explanation: A life estate grants ownership rights to a person for their lifetime. Upon the life tenant’s death, the property reverts to the original owner or a remainderman.
All of the following are examples of specific liens EXCEPT
A. Mortgage liens
B. Real estate tax liens
C. Mechanic’s liens
D. Judgment liens
Answer: D. Judgment liens
Explanation: Judgment liens are general liens, applying to all of a debtor’s property, while mortgage liens, tax liens, and mechanic’s liens apply to specific properties.
A tax lien takes priority over other liens except
A. First mortgages
B. Income tax liens
C. Judgment liens
D. No exceptions
Answer: B. Income tax liens
Explanation: Income tax liens imposed by the federal government often take precedence over other liens, including property tax liens, depending on their filing status.
The government’s power to take private property for public use is called
A. Police power
B. Condemnation
C. Escheat
D. Eminent domain
Answer: D. Eminent domain
Explanation: Eminent domain allows the government to take private property for public use, such as for infrastructure projects, with just compensation provided to the owner.
A lien that covers all of a debtor’s property is called
A. A general lien
B. A specific lien
C. An equitable lien
D. A statutory lien
Answer: A. A general lien
Explanation: A general lien applies to all of a debtor’s real and personal property, unlike specific liens which apply only to a specific asset, such as a mortgage or tax lien.
A life estate based on the life of someone other than the life tenant is called
A. Life estate pur autre vie
B. Reversionary life estate
C. Estate in remainder
D. Life estate in gross
Answer: A. Life estate pur autre vie
Explanation: A life estate pur autre vie is based on the lifetime of a person other than the life tenant. The estate ends when that third party dies, not the life tenant.
Which of the following is NOT a characteristic of a fee simple estate?
A. It terminates upon death
B. It is of indefinite duration
C. It can be inherited
D. It cannot be defeated
Answer: A. It terminates upon death
Explanation: A fee simple estate is the highest form of ownership and does not terminate upon death. It is inheritable and lasts indefinitely unless a condition is violated (if defeasible).
If a property owner dies intestate and has no heirs, the property will revert to the state by
A. Eminent domain
B. Escheat
C. Police power
D. Condemnation
Answer: B. Escheat
Explanation: If someone dies without a will and has no heirs, their property reverts to the state through escheat to prevent it from being ownerless.
