Encumbrances And Transfer Of Ownership

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What is an Encumbrance

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is a non-possessory interest in real property that is held by someone who is not the owner. Anything that burdens or affects the title or the use of the property is an encumbrance.

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An encumbrance that affects the title is known as

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Financial encumbrance - trust deeds and mortgages, mechanics liens, tax, attachments...

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An encumbrance that affects the use of the property is known as

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Non-financial encumbrance - easements, building restrictions, zoning requirements and encroachments

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What is a lien?

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is an obligation to pay a financial encumbrance that may be voluntary or involuntary

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Voluntary lien?

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an owner may choose to borrow money, using the property as security for the loan

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Involuntary Lien

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not paying taxes or the debt owed creates an involuntary lien against the property

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What is a mechanics lien?

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is when anyone who supplies labor, services, or materials used for improvements on real property and who did not receive payments then a lien is placed against a property. will be paid before any other liens on the house except government liens and sometimes over trust deed if the work took place before the deed was completed

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Lis Pendens

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AKA - Pendency of action. Recorded notice that indicates pending litigation affecting the title on a property

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Attachment Lien

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process by which the government holds the real or personal property of a defendant as security for a possible judgment pending the outcome of a lawsuit - valid three years.

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Easement by necessity

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is created when a parcel is completely land-locked and has no access. it is automatically terminated when another way to enter and leave the property becomes available

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Easement by prescription

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created by continuous and uninterrupted use, by a single party, for a period of five years. must have reasonable claim to use the property.

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adverse possession

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requires the payment of taxes for five continuous years to acquire land

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An easement may be terminated by non-use and the property owner has reason to believe that no further use is intended is called

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Estoppel

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Eight ways to terminate an easement

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1. abandonment

2. destruction of servant tenement - government

3. adverse possession - prevention of use

4. merger - same person owns both

5. express release - quitclaim deed

6. legal proceedings - action to quiet title

7. Estoppel - no more use

8. Excessive use

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What is an example of a government restriction?

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zoning

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What is a covenant?

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is a promise to do or not do certain things

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Private restrictions

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created in the deed at the time of sale

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Downsizing

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when zoning is changed from a high density use to a lower density use such as commercial or light manufacturing to residential or from residential to conservation

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What is an encroachment?

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placing a permanent improvement such as a fence, wall, driveway or roof, so that it extends over the lot line into adjacent property owned by another. an owner has three years in which to sue the neighbor

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Homestead protection

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a lien that protects a certain amount of equity in a person's home by limiting the amount of liability for certain debts against which a home can be used to satisfy judgment. does not protect an owner against foreclosure on a trust deed, mechanics lien, or lien before filing for homestead.