Deed restrictions. Lis Pendens. Easements. Encroachments

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1 Chapter 3: Encumbrances on Real Property

2 Encumbrances Liens Deed restrictions Lis Pendens Easements Encroachments

3 Liens Specific Mortgage and deed of trust Real property tax Special assessment Mechanics

4 Liens Mechanics Liens Must be filed within 120 days from last furnishing of labor or materials Takes effect from first date of furnishing of labor or materials Must bring action to enforce within 180 days of furnishing of labor or materials

5 Liens General Judgments Personal property tax State and federal tax

6 Effect of Liens on Title Appurtenant (run with the land) Do NOT attach to the owner

7 Priority of Liens Real property tax/special assessments Mortgages, in order of recordation Liens and judgments, in order of recordation Mechanic s liens effective first day labor began or materials delivered

8 Deed Restrictions Private agreements enforced by private parties Usually imposed by developer or original owner Purpose is to maintain standards and value

9 Lis Pendens Legal notice of pending litigation that could adversely affect title Buyer takes title subject to subsequent ruling

10 Writ of Attachment Encumbrance for a debt other than a mortgage Writ of execution authorizes sheriff to sell property to satisfy debt

11 Easements Grants non-possessory right to use land of another No ownership is granted Two types Easement Appurtenant Easement In Gross

12 Easements Easement Appurtenant 2 adjacent lots with different owners Easement runs over servient tenement Tract that benefits is the dominant tenement Is appurtenant to title of both tracts

13 Easements Easement in Gross Right of use belongs to an individual (personal easement) Is not appurtenant to the land Usually not assignable Terminates with death of easement owner Utility easements are common example

14 Creating an Easement Express grant Express reservation Necessity Prescription Condemnation

15 Terminating an Easement Purpose no longer exists Merger Release of right to servient owner Abandonment of easement Nonuse of prescriptive easement Adverse possession by servient owner Destruction of servient tenement Nonrecordation Lawsuit Excessive use

16 Licenses Personal right to enter property for a specific purpose Can be terminated or revoked Not considered an encumbrance Terminates with death of party or sale of land

17 Encroachments An improvement that extends past the property line Disclosed by personal inspection and location survey Can make both titles unmarketable

18 Property Taxation in North Carolina General Ad valorem tax Machinery Act governs taxation General ad valorem value = market value Taxing bodies (county, city, town) levy taxes All real property subject to tax unless exempted Mandatory octennial reappraisal Possible horizontal reappraisal in fourth year

19 Property Taxation in North Carolina Taxation Timetable Jan. 1: lien attaches to property Jan. 31: all property listed July 1: new tax rate established Sept. 1: tax due and payable Jan. 6 next year: tax delinquent

20 Property Taxation in North Carolina Special Assessments Levied by taxing body for public improvements made to property Superior lien to all other liens except ad valorem tax liens