Unit 2.3 - Liens & Encumbrances (LTP Flashcards)
What is an encumbrance?
A burden or hinderance that may diminish property value.
Easements
Encroachments
Liens
CC&Rs (covenants, conditions, and restrictions = restrictive covenants)
What’s an easement?
Right or privilege to use the property of another. Does not create ownership.
Pur Autre Vie.
What is an appurtenant easement?
Adjoined lots, where dominant and servient estate is created.
Dominant = benefit. Servient = burden.
What is a personal easement?
Typically used for hunting, fishing or crossing someone else’s property. Cannot be transferred (willed or sold). Terminates upon death of either party. Easement terminated if/when grantor dies or sells.
What is a commercial easement in gross?
Utilities, billboards, cell towers, etc.
May be willed, sold and transferred.
Remains an encumbrance even if grantee declares bankruptcy.
What is a license?
A revocable right to use someone else’s property.
Can be terminated, therefore, not an encumbrance.
Automatically terminates upon death.
What is an encroachment?
An improvement which crosses property boundaries (illegally) that can be discovered w/surveys.
What is lis pendens?
Notice of pending litigation. When property is sold lis pendens, the new owner risks losing the property.
What is a sheriff sale?
Writ of Attachment – court freezes assets to prevent sales
Writ of Execution – court orders sale of assets to cover judgment
What are restrictive and protective covenants?
Private use restrictions. Limiting paint color, house color, minimum square footage, mailbox type, etc.
Enforced by HOA.
May be referred to as CC&Rs – covenants, conditions and restrictions
What is a lien?
The right to force the sale of a property to recover money lent.
What is a general lien?
Against ALL property of debtor.
What is a specific lien?
Lien against one specific property.
What is lien priority? Who gets paid in what order?
- cost of foreclosure sale (if it’s a foreclosure)
- real property taxes and special assessments
- mortgages in the order of filing (if multiple)
- mechanic’s lien (in order that work started if more than one)
What are real property taxes?
Machinery Act – permits city and county to charge property tax. Charged on ad valorem (assessed value) basis.
Highest priority lien (if not foreclosure costs)
