©2011 Cengage Learning

©2011 Cengage Learning

Chapter 3
1. Define encumbrance, lien, easement, and encroachment
2. Explain the difference between private deed restrictions and public restrictions
3. Describe the key characteristics of mechanic’s liens, tax liens, and judgment liens
4. Discuss the details of the California homestead law
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Encumbrance = BURDEN ON TITLE
 PHYSICAL = Non-money encumbrances
 LIENS = Money encumbrances
 Monetary and various liens
 Voluntary
 Involuntary
 Specific
 General
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
EASEMENT
The limited right to enter and use all or a portion of the land of another
not a trespasser
- no rent paid for the use
1.
2.
Two classes of easements:
Easement APPURTENANT

Dominant tenement

Servient tenement
Easement IN GROSS

Utility company
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©2011 Cengage Learning
EASEMENT

Creating an Easement
-
-
5.
1.
2.
3.
4.
Deed : May Grant or Reserve
Necessity / Implication
Dedication - Recorded Plat Map
Condemnation
Prescription
Estoppel
Encroachment
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Terminating an Easement a.
b.
c.
d.
e.
f.
Express release by deed
Abandonment
Destruction of servient tenement
Expiration
Merger
Lack of use for 5 years (Prescriptive easement only)
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1. Actual, open and notorious use
2. Continuous use ( 5 years, uninterrupted)
3. Hostile (without permission of owner)
4. Claim of right or color of title
5. No need to pay property taxes
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
Encroachment
The wrongful extension (trespass) of a structure or any improvement (partially or wholly) onto the property of another.
A B
Encroachment
B’s garage or shed
*Not covered by standard CLTA title insurance policy.
**May become prescriptive easement or adverse possession
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 Non Money Encumbrances
Encroachment
Pool
Property line
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No statute of limitation

RESTRICTIONS
1.
Private C ovenants: (C C & R’s)
C ovenant = A PROMISE
C ondition: A limitation on ownership
R estriction: Discrimination is unenforceable
2. Public Restrictions
Zoning Ordinances
Building codes
Safety codes
Health codes
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$ LIEN $
1.
Deed of Trust - Trust Deed
2.
Mechanic’s Lien
3.
Tax Lien
4.


Assessment


Water District Bond
Sidewalks
Street Lights
Curbs & Gutters
5.
Judgment Lien
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Filing a Mechanic’s Lien
Priority determined by date of work commencement
Preliminary Notice:
States workers right to file a lien
20 Days after work starts
1.
2.
3.
Work considered complete:
Owner occupies the property
Owner accepts the work as completed Work stops
Work stops for continuous 60 days
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Statutory Time Periods: a) Notice of Completion filed
Original Contractor: 60 Days after filing
All Others: 30 Days after filing b) NO Notice of Completion filed:
Everyone: 90 Days after Completion c) Once Mechanic’s Lien is filed
Must execute in 90 Days after filing
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MECHANIC’S LIEN
Days (in number order)
DAYS
10 Notice of Non Responsibility (Tenant orders work)
20 Preliminary notice
30 Subcontractors and others
60 General contractor
90 All
90 Statute of Limitations
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JUDGMENT LIEN
Created by a Court of Law
 The judgment process:
 Writ of Attachment o Court ordered to seize the property
 Judgment o
Court’s decision
 File an Abstract of Judgment o Lien created for 10 years o Recording establishes a General Lien
 Writ of Execution o Sale of the property ordered
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Major Types of Tax Liens
Unpaid Real Property Taxes
Unpaid Federal Income Taxes
Unpaid State Inheritance Taxes
Unpaid Gift Taxes
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Declaration of Homestead
 Recorded Document
 Designed to protect homeowner’s equity
 Filed showing “Head of Household”
 Declare claimant is residing on property
(Home, boat, motor home, mobile home on a lot)
 Description of property
 Owner-Occupied residence
 Only ONE homestead at a time
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HOMESTEAD PROTECTION
Single person $75,000
Head of Household $100,000
Senior (age 65 + ) $175,000
Elder (age 55) with low income $175,000
As of January 2010
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Proceeds from forced sale go to :
1. Discharge prior liens
2. Exemption to homestead claimant
3. Satisfaction of the judgment
4. Balance to claimant
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Termination of a homestead
 Sell the home
 File a Notice of Abandonment
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Review Quiz Chapter 3
1. A property tax bill is an example of: a. A voluntary lien b. A general lien c. An involuntary lien d. Two of the above are correct
2. An easement with only a servient tenement: a. Easement in gross b. Easement appurtenant c. Easement egress d. Easement for encumbrances
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Review Quiz Chapter 3
3. If an owner files a proper Notice of Completion in the
County Recorder’s office, unpaid subcontractors have how many days to file a lien?
a. 30 days b. 60 days c. 90 days d. 180 days
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Review Quiz Chapter 3
4. All of the following are true, except: a. A violation of a condition in a deed may cause loss of title b. A suit for removal of an encroaching fence must be brought within 10 years from the date of the encroachment c. Easements can be eliminated when the dominant tenement deeds to the servient tenement d. To be valid, a Notice of Completion must be recorded within 10 days after the completion of construction
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Review Quiz Chapter 3
5. For a single person, under 65 years and not of low income, the homestead exemption is: a. $25,000 b. $75,000 c. $100,000 d. $175,000
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Review Quiz Chapter 3
6. Once a valid homestead is recorded, which of the following terminates the homestead?
a. Renting the property b. Death of one spouse c. Selling the home d. Two of the above will terminate the homestead
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Review Quiz Chapter 3
7.
An easement 15 feet wide and 160 feet long is approximately what percent of an acre?
a. 20% b. 15% c.
10% d. 5%
8. Which of the following two terms do not go together?
a. Covenant – condition b. Encroachment – lien c. Grantor – grantee d. Abstract of judgment – writ of execution
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Review Quiz Chapter 3
9. Which of the following best describes the requirement to acquire title by adverse possession?
a. Hostile, continuous use, pay mortgage, open and notorious b. Color of title, continuous use, pay property taxes, hostile c. Permission, color of title, pay property taxes, open and notorious d. Claim of right, hostile, secret use, pay mortgage and property tax
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Review Quiz Chapter 3
10. A judgment is considered to be what type of lien?
a. Constructive b. Voluntary c. General d. specific
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Answers to Chapter 3 Review
Quiz
1.
C 6. C
2.
A
3.
A
4.
B
7. D
8. B
9. B
5.
B 10. C
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