Unit 3 - Encumbrances on Real Property

Question 1

Any charge, claim, lien, or liability held by someone other than the owner of property that may diminish the value or use and enjoyment of a property. May not prevent the transfer of title.

Answer 1

encumbrance

Question 2

A right given by law to certain creditors to have their debts pad out of the property of a defaulting debtor, usually be means of a court sale. An encumbrance on real property that can be general or specific.

Answer 2

lien

Question 3

A statutory lien against real property for nonpayment of taxes.

Answer 3

tax lien

Question 4

Lien Priority

Answer 4

1. Real property tax lien
2. Personal property tax lien
3. Assessments
4. All other liens (determined by the chronological order in which the lien documents were recorded)

Question 5

A lien affecting or attaching only to a specific parcel of land or piece of real property - i.e. mortgage lien, real property tax and assessment liens

Answer 5

Specific Lien

Question 6

The right of a creditor to have all of a debtor’s current and future property for the next 10 years - both real and personal - sold to satisfy a debt; i.e. judgment lien, personal property tax liens

Answer 6

General Lien

Question 7

A specific, involuntary lien secured by interest in real property to give security to contractors, laborers, and materialmen who have performed work or furnished materials in the erection or repair of a building.

Answer 7

mechanic’s lien

Question 8

A title insurance entity that is designated under the North Carolina Mechanic’s Lien Law by a real property owner to receive notifications of possible mechanics’ liens from construction project vendors.

Answer 8

lien agent

Question 9

The formal decision of a court upon the respective rights and claims of the parties to an action or a suit. After being entered and recorded, it becomes a general involuntary lien on the current and future real and personal property of the debtor in the county where recorded for the next 10 years.

Answer 9

judgment

Question 10

Clause placed in a deed by the owner to control the future uses of the property (restrictive covenants)

Answer 10

deed restriction

Question 11

A recorded legal document giving constructive notice that an action potentially affecting title to a particular property has been filed in either a state or federal court; title is effectively unmarketable during the litigation.

Answer 11

lis pendens

Question 12

A court order directing the county sheriff to sell a defendant’s property as required by judgment or court decree.

Answer 12

writ of execution

Question 13

At the request of a creditor, the the court retains custody of the unsecured property during the lawsuit to ensure that the property remains available to satisfy a judgment ordered as resolution of the suit by the court. If recorded, it is an encumbrance on the property.

Answer 13

writ of attachment

Question 14

The first lien to be recorded is the first lien to be paid

Answer 14

pure race system

Question 15

A right to limited use and enjoyment of the land of another for a specific purpose without ownership; a nonpossessory interest in real estate.

Answer 15

easement

Question 16

Types of easements

Answer 16

1. Easement appurtenant
2. Easement in gross
3. Easement by necessity
4. Easement by prescription

Question 17

An easement that runs with the land; the easement is part of both the dominant and the servient tracts and conveys with the title to either tenement,

Answer 17

easement appurtenant

Question 18

Land on which an easement exists in favor of an adjacent property (the dominant tenement). Easement runs with the land. The tract over which the easement runs.

Answer 18

servient tenement AKA
servient estate AKA
tract

Question 19

A property that includes in its ownership the appurtenant right to use an easement over another person’s adjacent property (the servient tenement) for a specific purpose; ownership of the easement runs with the land. The tract that benefits from the easement.

Answer 19

dominant tenement

Question 20

An easement that is not created for the benefit of any land owned by the owner of the easement but that attaches personally to the easement owner. There is no dominant tract; the easement attaches to the servient tract. Personal is not assignable; commercial is assignable.

Answer 20

easement in gross

Question 21

An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; i.e., to allow a landlocked owner a right of ingress and egress over a grantor’s land.

Answer 21

easement by necessity

Question 22

An easement acquired through adverse use of another’s property for a period of 20 or more years in North Carolina.

Answer 22

easement by prescription

Question 23

(1) A privilege or right granted to a person by a state to operate as a real estate broker (2) The personal revocable nontransferable right to temporary use of another’s land - a personal right that cannot be sold.

Answer 23

license

Question 24

An unauthorized intrusion of an improvement, or any part of an improvement, on the real property of another party; can make title to both parcels unmarketable. Best discovered by survey.

Answer 24

encroachment

Question 25

A tax levied according to value, generally used to refer to real estate tax.

Answer 25

ad valorem tax

Question 26

The North Carolina General Statutes that govern the ad valorem taxation of property.

Answer 26

Machinery Act

Question 27

(1) The imposition of a tax, charge, or levy, usually according to established rates. (2) Official valuation of property for the purpose of establishing assessed value for tax purposes.

Answer 27

assessment

Question 28

One-tenth of one cent ($0.001). Some states use to compute real estate taxes.

Answer 28

mill

Question 29

In North Carolina, the statutory reappraisal of all real property in every county every eight years for tax purposes

Answer 29

octennial reappraisal

Question 30

A valuation technique sometimes used for tax assessment purposes that applies a standard
percentage increase or decrease to all property in a given location

Answer 30

mass appraisal AKA

horizontal adjustments

Question 31

A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement like a street or sewer

Answer 31

special assessment