Physical Encumbrances

Transcription

1 Physical Encumbrances Types of physical encumbrances include (1) deed restrictions, (2) easements, and (3) encroachments. D eed restrictions A major package of private deed restriction are covenants, conditions and restrictions (CC&R s). C,C &R s may be imposed by an owner of real estate, a master plan community, a Homeowner s Association, or a developer or subdivider who wants to maintain specific standards. They are listed in the original development plans for the subdivision, should be included in the owner s deed, and are filed in the public record. These deed restrictions are fee simple defeasible estate rules. E asements An easement is a right of access by non-owners onto the owner's property for a particular purpose. Commonly used types of easements include: 1. Shared wall easement, 2. Easement by necessity, 3. Easement by prescription, and 4. Easement in gross. An easement may be created formally or informally. It may be created: by written agreement between the parties, by the grantor in a deed, by longtime usage, by necessity, or by implication. Shared wall easement A shared wall easement is very common in Nevada. It is a shared partition wall between two neighboring properties. Usually the wall sits on the property border, half on one side and half on the other side. Often times the expenses to build and maintain the wall have been shared by the neighbors. ABC Real Estate School 3 st ed National Workbook August 2010 Page 133

2 Easement by Necessity Parcels without access to a public way may have an easement of access over adjacent land if crossing that land is absolutely necessary to reach the landlocked parcel and there has been some original intent to provide the lot with access and but the grant was never completed or recorded but thought to exist. A court order is necessary and the judge will weigh the relative impact of enforcing an easement on the lot otherwise unencumbered against the damage to the lot now found to be without a valid easement and thus landlocked. Because this easement requires imposing an easement upon another party for the benefit of the landlocked owner, the court shall look to the original circumstances in weighing the relative apportionment of benefit and burden to both lots in making its equitable determination whether such easement shall be created by the court. This easement, being an active creation by a court of an otherwise non-existent right, will be automatically extinguished upon termination of the necessity (for example, if a new public road is built adjacent to the landlocked tenement or another easement is acquired without regard to comparison of ease or practicality between the imposed easement and any valid substitute). 28 This type of easements runs with the land. It transfers with the deed of the dominant tenement forever unless the holder on the dominant tenement releases the right. To continue, both adjacent parcels must be owned by two different parties. If one of the parties purchases the other property, the easement would no longer be needed and would automatically terminate. If the property owne r in need of access acquires other legal access, that would also terminate the easement. The land burdened with the easement is the servient tenement and the land using the easement is referred to as the dominant tenement. Dominant Tenement or Estate Servient Tenement or Estate 28 Accessed July 8, ABC Real Estate School 3 st ed National Workbook August 2010 Page 134

3 Easement by Prescription Easements by prescription, also called prescriptive easements, are implied easements granted after the dominant estate has used the property in a hostile, continuous and open manner for a statutorily prescribed number of years. For example, if a home-owner has maintained and used a chunk of the neighbors land for a state-prescribed period of time, he may have a legal claim to that chunk. Once they become legally binding, easements by prescription hold the same legal weight as written or implied easements. But, before they become binding, they hold no legal weight and are broken if the true property owner acts to defend his ownership rights. Easement by prescription is typically found in legal systems based on common law, although other legal systems may also allow easement by prescription. The period of continuous use for a prescriptive easement to become binding is generally between 5 and 30 years depending upon local laws (usually based on the statute of limitations on trespass). Generally, if the true property owner acts to defend his property rights at any time during the required time period the hostile use will end, claims on adverse possession rights are voided, and the continuous use time period resets to zero. I n some jurisdictions, if the use is not hostile but given actual or implied consent by the legal property owner, the prescriptive easement may become a regular or implied easement rather than a prescriptive easement and immediately becomes binding. In other jurisdictions, such permission immediately converts the easement into a terminable license, or restarts the time for obtaining a prescriptive easement. Prescription may also be used to end an existing legal easement. For example, if a servient tenement holder were to erect a fence blocking a legally deeded right-ofway easement, the dominant tenement holder would have to act to defend his easement rights during the statutory period or the easement might cease to have legal force, even though it would remain a deeded document Accessed July 8, ABC Real Estate School 3 st ed National Workbook August 2010 Page 135

4 Easement in Gross or License A license is an informal, personal privilege to enter the land of another for a specific purpose. Unlike an easement, it can be terminated or canceled by the licensor. It may be given orally or informally. It terminates upon the death of either party or the sale of the land by the licensor. An easement in gross is often confused with a license. It is an individual interest in or right to use someone s land. Personal easements in gross are usually not assignable and usually terminate upon the death of the easement owner. How are Easements Terminated? If the purpose which created the easement no longer exists, it may automatically terminate or legal steps may be required. The easement may terminate: if the owner of either the dominant or servient tenement becomes the owner of both properties if the properties are merged under one legal description by release of the right of easement to the owner of the servient tenement by abandonment or nonuse of a prescriptive easement by adverse possession by the owner of the servient tenement by destruction of the servient tenement by lawsuit to quiet title by excessive use Encroachment The last type of physical encumbrance is an encroachment. Property Line It occurs when all or part of a structure illegally extends beyond the land of its owner or beyond the legal building lines. It is usually disclosed by either a physical inspection of the property or a spot survey. The impacted neighbor may be able to ABC Real Estate School 3 st ed National Workbook August 2010 Page 136

5 recover damages or make the neighbor remove the portion of the building that encroaches. If the affected parcel does nothing, after a state prescribed period of time, it may turn into an easement by prescription and the encroaching party may be able to pursue legal ownership of the impacted land. Adverse Possession 30 Adverse possession is a common law concept by which property can change ownership. By adverse possession, title to another's real property can be acquired without compensation, by holding the property in a manner that conflicts with the true owner's rights for a specified period. This means that the law may be used to reward a person who possesses the land of another for a state-prescribed period of time. Failure of a landowner to exercise and defend his property rights for a certain period may result in the permanent loss of the landowner's interest in the property. An e xample of this would be if a landowner saw that his neighbor built a garage on his l and, due to an error in determining the property border. If the landowner knows an d says nothing, the encroaching land owner may be able to claim ownership after a period of time. The minimum conditions are: Act ual possession of the property Open and notorious use of the property Exclusive use of the property Hostile or adverse use of the property Continuous use of the property Ownership is not automatic. The squatter needs to pursue legal ownership in the c ourts accord ing to state law. Nuisance A nuisance is not legally an encroachment but it can be confused with an encroachment. An example is a neighbor s tree limb hanging over onto the neighbor s property. Since the tree is not actually planted on the neighbors property, it is a nuisance rather than an encroachment Accessed August 12, ABC Real Estate School 3 st ed National Workbook August 2010 Page 137

6 Encumbrance Terminology Attachment: a process of the law that creates a lien. It gives custody of real or personal property to the court to assure payment of a pending lawsuit in that county Blanket Encumbrance: a voluntary lien placed over more than one parcel Easement: an interest in land owned by another person consisting of the right to use or control the land, or an area above or below it, for a specific, limited purpose. Can be appurtenant or in gross Easement Appurtenant: an easement "created for and beneficial to" the owner of adjoining or attached lands (goes with the land) Easement in Gross: not attached to any particular land dominant tenement. An easement created for the benefit of others who do not own adjoining or attached lands Egress: leaving a property (out) Encumbrance: a right or interest in real property other than an ownership or tenancy interest. A burden that limits property's use and may lessen value General Lien: liens on all properties of an owner, not just one Ingress: Entering a property (in). Injunction: a court order which can restrict a party from doing an act such as violating private deed restrictions Involuntary Liens: money obligations that create a burden on a property by government taxes or legal action because of unpaid bills Judgment: a court decision determining the rights of the parties involved and the amount of compensation Lien: a documents that uses a property to secure the payment of a debt or the discharge of an obligation. It is money owed for one reason or another on a property Lis Pendens: the recording of a notice with the county recorder's office warning all persons that a certain type of lawsuit is pending concerning a particular property Mecha nic's Lien: liens that may be filed against a property by person who was not paid after furnishing labor or materials for construction work on that property Mortgage: a lien that secures real property for the payment of a promissory note Notice of Non-Responsibility: A notice that is posted on the property stating that the owner is not responsible for the work being done ABC Real Estate School 3 st ed National Workbook August 2010 Page 138

7 Preliminary Notice: a written notice that must be given before filing a mechanic's lien and within 20 days of supplying labor or services Sheriff's Sale: the forced sale of a debtor's property to satisfy a judgment under a writ of execution Special Assessments: fees paid by property owners in a given district that are used for local improvements Specific Lien: liens against just one property Tax Lien: if any government tax is not paid, it may become a lien. If lien is not settled, the property can be sold to pay back-taxes Trust Deed: a written instrument that makes real property collateral for a loan Two main types of encumbrances: 1) liens and 2) items that affect the physical condition or use of the property Types of Liens: 1) trust deeds and mortgages, 2) mechanic's liens, 3) judgments and attachments, 4) tax liens and special assessments Types of Non-money encumbrances: 1) easements, 2) building restrictions and zoning, 3) encroachments Voluntary Liens: money debts that an owner agrees to pay Writ of Execution: a court order requiring the sale of a certain property to 31 satisfy a judgment Types Water Rights 1) Riparian Rights 2) Littoral rights 3) Doctrine of Prior Appropriation Riparian Rights Riparian rights are common-law rights granted to owners of land along the course of a river, stream or similar body of water. The owner of land that borders the nonnavigable waterway (unsuitable for a commercial boat) owns the land under the water to the exact center of the boat waterway. Generally the rights include the unrestricted right to use the water with these limitations: they cannot interrupt or alter the flow of water cannot contaminate the water 31 Accessed July 8, ABC Real Estate School 3 st ed National Workbook August 2010 Page 139

8 Littoral Rights Littoral rights are considered public highways. These are owners of land that borders commercially navigable lakes, seas and oceans. The state holds title to the submerged land, and the public has an easement or right to travel on the water. Bordering home-owners own the land adjacent to the water only up to the mean (average) high-water mark. Do ctrine of Prior Appropriation Nevada follows the Doctrine of Prior Appropriation. Under prior appropriation, all water rights are controlled by the state. Limited domestic usage allowed for adjacent landowners. In o rder to secure water rights, one must apply for a water use permit and show a beneficial use for the water requested Priority is given on a first come, first serve basis. Water rights usually may be sold once they are obtained. Other Water Rights Terminology: Erosion Gradual wearing of land by the action of water and wind. Accretion Gradual accumulation of soil The deposited soil is called alluvion or alluvium Downstream soil may be added to the shore, due to current and wind activity. Avulsion Violent tearing away of land by hurricane, flood, high winds, tornado, etc. Faster and more intense than erosion. Accession Change in a boundary's course, such as a river changing course. Reliction A change in boundary's level - the water level increasing. land is added - water evaporates ABC Real Estate School 3 st ed National Workbook August 2010 Page 140

9 What is a Homestead Exemption? EQUITY = VALUE MORTGAGES A creditor may file suit and can record a judgment lien against any real property. Recording a Declaration of Homestead protects a homeowner s principal residence up to the statutory maximum. When a Nevada homeowner records a Declaration of Homestead, Nevada law protects the equity in his/her home up to $550,000 from general creditor claims (unpaid medical bills, bankruptcy, charge card debts, business/personal loans, accidents) but would not preclude a seizure or forced sale of the residence from general creditors if the equity exceeds the $550,000. For example, if the value of the home is $645,000 and there is a first mortgage of $485,000 and a second mortgage of $10,000, the equity is $150,000. WHAT IS NOT PROTECTED? The Homestead Law does not protect the homeowner against debts secured by a mortgage or deed of trust, payment of taxes, IRS lien, mechanic's lien, child support or alimony payments. ABC Real Estate School 3 st ed National Workbook August 2010 Page 141