Encumbrances

Course Objectives

Answer explanation

Objectives Upon completion of this lesson, the student should be able to: -Define the term "encumbrance" and give examples. -Define the terms "lien," "restrictions," "encroachments," easements," and "licenses" and give examples of each. -Describe the creation and the termination of easements by necessity, prescription and condemnation. -Define the following forms of liens: voluntary, involuntary, statutory, equitable, general and specific. -Explain the effects of a lien as an encumbrance on title to real property. -Describe the priority of liens on title. -Explain attachments and judgments. -Describe the purpose of the homestead exemption. -Describe the effect of a mechanic's lien. -State the differences between general taxes and special assessments.

ENCUMBRANCE

Answer explanation

An encumbrance is any interest or right to land held by third persons which affects the title and possibly the value of the property. Two types: 1. Some encumbrances affect the physical condition of the property or affect the use of the property. These include deed restrictions (private limitations on the use of land), easements, and encroachments. 2. Other encumbrances are financial; they involve money. Such encumbrances are called liens. A lien is a charge against property, making that property security for payment of a debt.

Deed restriction

Answer explanation

Condition or convenant

Condition

Answer explanation

A condition is a restriction that provides for ownership of the property to revert to the former owner if the condition is violated. It creates a defeasible fee estate.

Covenant

Answer explanation

A covenant is a promise to do or to not do something: - Subdivisions have covenants that establish set back lines, limit types of structures that may be built, etc. - Persons adversely affected by a violation of a covenant, those (benefiting) from the restriction, may sue for damages or seek an injunction to force correction of the violation.

EASEMENT

Answer explanation

An easement is an irrevocable right to use all or a portion of another's land for a specific purpose. It is a nonpossessory right, as it gives the holder the right to limited use, but not to possession, of another's real property. For Example - The owner of property A was given a permanent right to cross over property B. While his legal rights include the right of use and enjoyment of the land for passage, they fall short of ownership of, or an estate in, the land belonging to owner B. Because an easement is a right to use and not to possess, it is usually nonexclusive. The landowner has the right to use the portion of the land on which the easement lies in any manner that does not interfere with the rights of the easement holder. For Example - The electric company and telephone company have easements to run their lines across the back of Smith's lot. Smith still has the right to use that portion of his land as long as he does not disturb those lines or interfere with the right of the companies to maintain and repair those lines.

Easement vs. Lien

Answer explanation

An easement is an encumbrance, but it is not a lien, as it does not involve money. Because the easement belongs to someone other than the owner of the land on which it lies, the easement is an encumbrance on the title to that land. As a result, that property would be subject to the easement. Land that is subject to, and therefore encumbered by, the easement is called a servient estate or servient tenement. Because the easement is irrevocable, the owner of servient tenement cannot terminate the easement, even if the easement causes him great inconvenience. Furthermore, sale of the servient tenement has no effect on the easement. The purchaser of a servient tenement would receive title encumbered by the easement, even if it is not mentioned in the deed. Depending on who has the easement right, an easement may be an easement in gross or an easement appurtenant.

Servient Estate or Servient Tenement

Answer explanation

Land that is subject to, and therefore encumbered by, the easement is called a servient estate or servient tenement.

Easement in gross or Easement in Appurtenance

Answer explanation

An easement that is the right of an individual or company, held for the benefit of that person or company, is called an easement in gross. An easement in gross is personal property of the easement holder. It attaches to him personally and not to his land. The easement could be noncommercial or commercial. For Example - Fred sold land bordering a park and reserved an irrevocable right to have access to the park through the land he sold. He has a noncommercial easement in gross. His easement is nonassignable and will terminate with his death, unless it is specified otherwise. The same would hold true if a person sold a property that bordered a beach and reserved the right to cross the property to access the beach. A commercial easement in gross is usually used by a utility company to install its lines under or over a privately owned property. Since almost all property has such lines, the easements in gross are the most common forms of easement. A commercial easement in gross would also be created if a person had a right to maintain a billboard on another's property. A commercial easement in gross can be sold, assigned and mortgaged. With an easement in gross there is only one parcel of real estate involved: the servient estate. When a person has a right to enter the property and remove soil or other resources, such as sand, gravel or timber, his right may be called a profit a prendre, or simply, a profit. With an easement appurtenant there are at least two parcels of land under separate ownership. This easement is a burden on one property (the servient estate) and a benefit or appurtenance to another property (the dominant estate or dominant tenement). For Example - Ward has an easement appurtenant for ingress (a way to get in) and egress (a way to get out) over Taylor's acre, to enable him to reach the public road. Taylor's land is the servient tenement. Ward's land is the dominant tenement. This right runs with the land, so it will pass with the title from Ward to the next owner and successive owners whenever the title is transferred. Because an easement appurtenant is a property right, and not a personal right of the holder, it is considered a real property interest rather than a personal property interest. Because it is appurtenant to the dominant estate, it runs with the land and will pass with the dominant estate when the title to that property is conveyed. A dominant tenement need not adjoin the servient tenement at any borders. For Example - A right of way over four parcels has been granted to a fifth parcel. That fifth parcel, the dominant estate, borders one of the servient estates, but not the other four. George's property has an easement for passage of light, air and heat over a hilly parcel that is not adjoining his property.

easement in gross

Answer explanation

One parcel of RE involved: Servient estate