You can find 2 basic classifications of encumbrances:
(1) the ones that have an effect on the title, for example judgments, mechanics' liens, tax liens, and mortgages, to protect a debt or responsibility and (2) the ones have an effect on the physical condition of the property, including restrictions, easements, and encroachments. Note that all liens are encumbrances but that not all encumbrances are liens.
For instance, an easment is an encumbrance but not a lien. In contrast, delinquent properly taxes are considered encumbrances as well as liens.
General liens are those that attach to both a debtor's real and personal property. Cases include judgments, estate and inheritance taxes, a state's corporate franchise tax, and IRS liens. Judgments are decrees issued by court order. Court-ordered amounts owed by a debtor are known as money judgments. Judgments are involuntary, general liens because they attached to both a debtor's real and personal property. Enforcing a judgment requires a of execution, which a creditor gains from a sheriff's office directing the sheriff to seize and sell as much of the debtor's property as is required to pay off the judgment. Following the sale the debtor obtains a satisfaction of judgment.
Often there's a delay between the time a lawsuit is filed and a judgment. If the lawsuit affects the debtor's real estate a special notice is recorded known as a lis pendens. A lis pendens is not an actual lien but selves constructive notice of a probable future judgment and also establishing its priority in lien structure. To prevent a debtor from conveying title to a properly involved in a lawsuit a creditor may seek a writ of attachment. By this writ, the courts retain custody of the property's title until the lawsuit is settled. This sort of encumbrance is known as an involuntary, specific lien. Specific liens are the ones that attach to identified real estate property. Cases include mortgage liens, mechanics' liens, propertytax liens, vendor liens, and special assessment liens. Priority of liens establishes the order in which claims are collected. Commonly, the 1st to record has the 1st right of recovery. However, real estate taxes and special assessments have precedence over all other liens, regardless of when there're recorded. For reference, note that a subordination agreement between lien holders may be used to change the priority order.
Easements are the most typical form of encumbrance affecting the physical condition or use of property-a right to use the land of another for a specific purpose. The 2 classes of easements are easements appurtenant and easements In gross.
• Easements appurtenant are said to "run with the land, " meaning there're immediately transferred to a buyer even though this isn't stated in the deed. There are 2 tracts of land: one receives the benefit of the easement (the dominant tenement or dominant estate), the other the burden (the servient tenement or servient estate).
• Easements are best created by express grant in a deed of easement, but they usually are created also by implied grant or reservation, prescription, condemnation, necessity, or dedication.
• Easements are permanent and irrevocable, whereas a license is a personal, revocable, and nonassignable authorization to utilize the land of another. What may look like legal access to a properly may turn out to be a mere license, revocable at the will of the neighbor-checkfor recorded easement rights for ingress and egress.
• Other kinds of nonmonetary encumbrances are private restrictions (sometimes found in CC&Rs, that is, covenants, conditions, and restrictions, a recorded document that runs with the land and binds future owners), encroachments, lateral support, and party walls. Public restrictions affecting the use of real properly are zoning, building codes, and variances.
• If a zoning ordinance and a deed restriction are in conflict, the more strict often controls.
• Private restrictions are available in restrictive covenants in a deed, a mortgage, or CC&Rs. These restrictions can be terminated, but only if all affected patties sign a quitclaim deed.
The following key terms can provide you information of the next issues:
• Various types of easements, including easements appurtenant, in gross, and prescriptive
• The creation and termination of easements
• Easements and license distinguished
• Restrictive covenants in deeds and leases
• Encumbrances affecting the title to real properly (tax and mortgage liens)
KEY TERMS
Ad valorem tax: In Latin, according to valve, and explains the tax levied against a property.
Adverse possession: The continuous, open, hostile, and adverse use of another's property with no authorization. The statutory possession period varies from state to state and is factored into this involuntary transfer oftitle. Adverse possession claims may be depending on either a claim of right or color of title. A claim of right may occur when a father gifts a son the family farm and then, several years later, dies with no having transferred the title by deed. The son's actual entry and possession (for the statutory time) ripened into title by adverse possession. Color of title takes place when a title seems to be good but is not. A good example is the conveyance oftitle by a forged deed. By occupying the promises for a statutory period of time the possessor can certainly obtain legal title by claiming "color of title. " In most cases, adverse possessors using a "color of title defense must have acted in good faith.
Covenants and conditions: Covenants are promises contained in contracts, the breach of which would entitle an individual to damages. Conditions, on the other hand, are contingencies, qualifications, or occurrences on which an estate or property right could be gained or lost.
Declaration of restrictions: A statement of all the covenants, conditions, and restrictions (CC&Rs) that affect a parcel of land.
Easement: A property interest that one person has in land owned by another that entitles the holder of the interest to limited use or enjoyment of the others land.
Easement in gross: The limited right of one person to use another's land (servient estate), which right is not created for the benefit of any land owned by the owner of the easement; that is, there is no dominant estate, as the easement attaches personally to the owner, not to the land.
Encroachment: An unauthorized invasion or intrusion of a fixture or other real property wholly or partly on another's property, thus decreasing the size and value of the invaded property.
Encumbrance: Any claim, lien, charge, or liability attached to and binding on real property that may lessen the value of the property but will not necessarily prevent transfer of title.
License: Revocable authorization for the use of someone's property. For example, allowing a designated dayfor a friend to fish or hunt on someone's land. A license is considered a privilege, not a right.
Mechanic's lien: A statutory, specific lien created in favor of laborers, contractors, and suppliers who have performed work or furnished material in the building, renovation, or repair of a building.
Party wall: A wall that is located on or at a boundary line between two adjoining parcels and is used or is intended to be used by the owners of both properties in the construction or maintenance of Improvements on their respective lots.
Prescription: The acquiring of a right in properly, usually in the form of an intangible property right, such as an easement or right-of-way, by means of adverse use of properly that is continuous and uninterrupted for the prescriptive period.
Restrictions: Limitations on the use of property. Private restrictions are created by means of restrictive covenants written into real property instruments such as deeds and leases.
Restrictive covenant: A private agreement, usually contained in a deed, that restricts the use and occupancy of real property.
Running witlithe land: Rights or covenants that bind or benefit successive owners of a property, such as restrictive building covenants in a recorded deed that would affect all future owners of the property, are said to run with the land.
Special assessment: A tax statutory levied against a property's owner for proposed improvements like street or sewer assessments. In a condominium development, assessing the co-owners cost for re-shingling a roof or re-surfacing a parking lot is also considered a special assessment.
WRONG IDENTITY
The next words tend to be confused with another. Note the distinction in meaning of these mistaken identity words and phrases.
Lienor/Lienee: The creditor (lienor) has a lien on the property of the debtor (hence) to satisfy a claim or debt.
Encroachment Encumbrance: An encroachment is an unauthorized intrusion of one property onto another properly; it is anencumbrance on both properties until court action or agreement resolves the issue.
Easement appurtenant/Easement in gross: Aneasement appurtenant benefits and runs with the land, whereas an easement in gross does not benefit any land. It is personal to the owner (e. g., utility company); there is no dominant estate (see below).
Dominant estate/Servient estate: The dominant estate is the property benefited by the easement; the servient estate is the properly burdened or subject to the easement.
Easement/license: An easement is a permanent right in properly, whereas a license, which is not an interest in real property, is a temporary right to use that may be revoked at anytime
