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Encumbrance
1) Liens (Money Encumbrance)
2) Non-Money Encumbrance
a claim, lien, charge, or liability attached to property. A burden on the title.
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Lien
a charge upon specific property, secured by payment of a debt.
- A) Specific & General Liens
- B) Voluntary & Involuntary
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Specific Lien
a charge against a particular parcel or one subdivision (One on One)
E.X.; Trust deed, mortgage, property taxes, mechanic's lien, attachment)
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General Lien
One which applies to all property of an owner (One vs. many)
Ex.; Judgment, estate, taxes, decedent's debts, corporation franchise tax, federal income taxes
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Voluntary Lien
Those which owner can prevent
I.E.; mortgage
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Involuntary Lien
Those which he does not wish to accept
IE. Property taxes
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Mechanic's Lien
lien on property to secure the payment of the unpaid claim by owner's agent
-Has priority over any other lien except taxes and assessment
- Could impair trust deed, recorded after work commence
-Notice of Completion, Notice of Cessation, and Notice of Non-Responsibilities
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Preliminary notice (Mechanic's Lien)
20 days notice of first furnishing labor...
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Filing Period (Mechanic's Lien)
Original Contractor: 60 days
Others: 30 days
If notice of completion is not recorded, all persons have 90 days.
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Injuction
court order to stop
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Attachment
Court process by which property may be seized and held as security for possible future judgment
- -Valid for 3 years
- -Writ of Attachment
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Judgment
A final determination of the rights of the parties in a court proceeding
- 1) Abstract of Judgment
- 2) Writ of Execution/ Execution Sale
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Abstract of Judgment
creates general lien on all real property of debtor
-last up to 10 years
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Writ of Execution/Execution Sale (Sheriff's Sale & Sheriff's Deed)
court order to sell (satisfy judgment)
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Lis Pendens (In Lawsuit...)
Pending litigation, affect title to real property
-effective until final judgment is rendered
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Non-Money Encumbrance
1) Easement
2) Private and Public Restrictions
3) Encroachment
Those which affect the physical condition or use of property.
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Easement
right to enter and use another's land within definite limits
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Dominant tenement
Land that is benefited
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Servient Tenement
Land that is subject or burdened with the easement
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Appurtenant Easement
buyer has the same right( run with the land)
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Easement in Gross
easement for utilities
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Prescription easement
created by exclusive use of land (continuous and uninterrupted for 5 years)
-can be stopped
-non-use for 21 years is still valid
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Termination of easements
quitclaim deed by owner of dominant tenement
-non use for 5 years for prescription easement
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Private restrictions (H.O.A.)
if zoning law conflicts with deed (private) restrictions, the more restrictive of the two controls can be created by deed.
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C.C. & R's
Condition, Covenant, and Restrictions
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Public Restrictions (Zoning Laws);
to promote public health, safety, morals and general welfare.
-Zoning changes can be initiated by: owner, government and subdivider/developer
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Downzoning
change in zoning law which restricts new development to a more restrictive use
I.E. rezoning commercial property to residential use.
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Zoning
an exercise of "Police Power"
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Encroachment
sue neighbor or transferor
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Homestead
California law that gives limited protection to homeowner's equity from forced sale.
-Does not protect against foreclosure or recorded liens.
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Title Insurance
protects owner or lender against most undisclosed existing liens and encumbrance
-companies are controlled by Insurance Commissioner
-insurance rates are set by each company
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Abstract of Title
summary of all document
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Chain of Title
history of all recorded conveyances and encumbrances.
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Preliminary title report
remove mechanic's lien before close of escrow
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Standard Policy of Title Insurance (C.L.T.A)
- -for most home buyer (paid by seller)
- -protects against forgery, improper delivery & lack of legal capacity
-protects heirs & successors of owner
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Extended coverage policy:
- on site inspection, survey
- -covers improvement on adjoining land (encroachment)
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A.L.T.A (American Land Title Association)
- includes survey
- -benefit(Protect) lender
- -paid by buyer in escrow
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Search Title through...
- 1) County Clerk Office
- 2) County recorder's office
- 3) Federal land office
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Fire Insurance
The insured should neither gain nor lose.
"Short rated"
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Escrow
trust arrangement, such as Agent
-Instruction executed by: seller, buyer, or third party with power of attorney
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Escrow Law
govern by Financial Code
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Closing Statement (Escrow)
purchase price debit the buyer
prepaid taxes, fire insurance credit the seller
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Proration
calculate amount of money involved (I.E. rent money)
- -use 30 days as one month
- -use 360 days as one year
Except: delinquent principal/interest on unsecured home improvement loan
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Impounds
1) Reserves (P.I.T.I, principal, interest, tax, insurance)
2) a recurring cost
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Two termite report in Escrow
- Section 1 paid by seller
- Section 2 paid by buyer
Reports to...Anyone entitles to...
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Escrow closed
reports to IRS
-is not responsible for call for funding of Loan
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TDS-11 (Transfer Disclosure Statement)
- 1) Given by transferor (Seller)
- 2) Reveal all material facts
- 3) Easton VS. Strassburger (1984)
- 4) Buyer may sue seller 2 years from C.O.E
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