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Types of Encumbrances
This flashcard deck covers various types of encumbrances, including liens, easements, and other property-related claims that affect ownership rights and property value.
any claim or lien on the property held by another person or entity that limits the owner’s use or rights or decreases the value of the property
encumbrance
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Key Terms
Term
Definition
any claim or lien on the property held by another person or entity that limits the owner’s use or rights or decreases the value of the property
encumbrance
A lien due to a court decree resulting from a lawsuit
Judgment Lien
A legal notice that a lawsuit is pending that affects the title of a property. This serves as warning to prospective buyers that a pending lawsuit could impact title.
Lis Pendens
The IRS will file this against all property belonging to that person for various taxes owed and unpaid.
Income Tax Liens
Created by the property owner or with the property owner’s consent
Voluntary Lien
When a property owner doesn’t pay for work that was performed the worker can file this lien to collect the money owed to them.
Mechanic’s Lien
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| Term | Definition |
|---|---|
any claim or lien on the property held by another person or entity that limits the owner’s use or rights or decreases the value of the property | encumbrance |
A lien due to a court decree resulting from a lawsuit | Judgment Lien |
A legal notice that a lawsuit is pending that affects the title of a property. This serves as warning to prospective buyers that a pending lawsuit could impact title. | Lis Pendens |
The IRS will file this against all property belonging to that person for various taxes owed and unpaid. | Income Tax Liens |
Created by the property owner or with the property owner’s consent | Voluntary Lien |
When a property owner doesn’t pay for work that was performed the worker can file this lien to collect the money owed to them. | Mechanic’s Lien |
A lien created without the property owner’s consent (e.g., property tax lien or mechanic’s lien) | Involuntary Lien |
Claims against a person and all of that person’s property. This type of lien occurs as a judgment against that person. | General Lien |
Claims against a specific property, identifiable property (the most common type of this lien is a mortgage) | Specific (or special) lien |
A lien created on the property used as collateral for a loan to purchase a home | Mortgage Lien |
When an owner does not pay property taxes a lien is levied against that property | Property Tax Lien |
When liens are given priority based on when they’re filed | First in time, first in right |
Which lien takes top priority | assessments and tax liens |
certain kinds of liens automatically go to the head of the line regardless of when they were filed. i.e.: HOA related liens | Super lien states |
A lien holder will agree to modify the order of priority. | subordination agreement |
If there’s not enough to pay off all lien holders, the owner will lose the property and owe the lien holders. | deficiency judgment |
a type of encumbrance that can affect the usage of a property | Easements |
The permanent right to use another’s land for the benefit of a neighbor. | Easement appurtenant |
A right to use the land (does not necessarily involve an adjoining property). Examples would be utility lines. | Easement in gross |
What are the two main categories of easements? | Easement appurtenant and Easement in gross |
What are the two main types of easements: | Easement by necessity and Easement by prescription: |
This is an easement acquired through years of use-one person acquires the permanent right to use another’s property by doing so for a period of time. Use must be hostile, open, exclusive, and notorious. | Easement by prescription |
Usually this involves access to a road; without such an easement, the owner requiring the right of passage would be landlocked. | Easement by necessity |
right to cross neighbor’s property to access the road. | dominant tenement |
The owner who gives the right to cross to neighbor | servient tenement |
This type of easement is terminated when the reason for the easement no longer exists, such as when a new road is built that reaches a previously landlocked parcel. | Easement by necessity |
Shared between two buildings and constructed on the boundary line between two owner's lots | Party Wall |
Rights to occupy the property | Possessory |
When a building, shrub, fence, etc., illegally crosses over into another's property. Can lead to a claim of adverse possession or an easement by prescription. | Encroachment |
Not classified as an encumbrance, this is a temporary right to enter the land or use property belonging to another for a specific purpose. | License |
Easements fall into this category | Non-Possessory |
Ways an easement can be terminated | The easement owner may release the easement if it is no longer needed
A dominant and servient land could be merged into one parcel
The easement owner could abandon the easement
The necessity of an easement by necessity could be terminated (e.g., by building a new access road for the dominant tenement)
An easement with a deadline could expire |
permission to do something on another's land without actually possessing any interest or ownership in the land. | license |
To enter | Ingress |
To exit | Egress |