Chapter 3

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  1. Encumbrance

    1) Liens (Money Encumbrance)
    2) Non-Money Encumbrance
    a claim, lien, charge, or liability attached to property. A burden on the title.
  2. Lien
    a charge  upon specific property, secured by payment of a debt.

    • A) Specific & General Liens
    • B) Voluntary & Involuntary
  3. 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)
  4. 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
  5. Voluntary Lien
    Those which owner can prevent

    I.E.; mortgage
  6. Involuntary Lien
    Those which he does not wish to accept

    IE. Property taxes
  7. 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
  8. Preliminary notice (Mechanic's Lien)
    20 days notice of first furnishing labor...
  9. Filing Period (Mechanic's Lien)
    Original Contractor: 60 days

    Others: 30 days

    If notice of completion is not recorded, all persons have 90 days.
  10. Injuction
    court order to stop
  11. Attachment
    Court process by which property may be seized and held as security for possible future judgment

    • -Valid for 3 years
    • -Writ of Attachment
  12. Judgment
    A final determination of the rights of the parties in a court proceeding 

    • 1) Abstract of Judgment
    • 2) Writ of Execution/ Execution Sale
  13. Abstract of Judgment
    creates general lien on all real property of debtor

    -last up to 10 years
  14. Writ of Execution/Execution Sale (Sheriff's Sale & Sheriff's Deed)
    court order to sell (satisfy judgment)
  15. Lis Pendens (In Lawsuit...)
    Pending litigation, affect title to real property

    -effective until final judgment is rendered
  16. Non-Money Encumbrance

    1) Easement
    2) Private and Public Restrictions
    3) Encroachment
    Those which affect the physical condition or use of property.
  17. Easement
    right to enter and use another's land within definite limits
  18. Dominant tenement
    Land that is benefited
  19. Servient Tenement
    Land that is subject or burdened with the easement
  20. Appurtenant Easement
    buyer has the same right( run with the land)
  21. Easement in Gross
    easement for utilities
  22. 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
  23. Termination of easements
    quitclaim deed by owner of dominant tenement 

    -non use for 5 years for prescription easement
  24. 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.
  25. C.C. & R's
    Condition, Covenant, and Restrictions
  26. Public Restrictions (Zoning Laws);
    to promote public health, safety, morals and general welfare. 

    -Zoning changes can be initiated by: owner, government and subdivider/developer
  27. Downzoning
    change in zoning law which restricts new development to a more restrictive use

    I.E. rezoning commercial property to residential use.
  28. Zoning
    an exercise of "Police Power"
  29. Encroachment
    sue neighbor or transferor
  30. Homestead
    California law that gives limited protection to homeowner's equity from forced sale. 

    -Does not protect against foreclosure or recorded liens.
  31. 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
  32. Abstract of Title
    summary of all document
  33. Chain of Title
    history of all recorded conveyances and encumbrances.
  34. Preliminary title report
    remove mechanic's lien before close of escrow
  35. 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
  36. Extended coverage policy:
    • on site inspection, survey
    • -covers improvement on adjoining land (encroachment)
  37. A.L.T.A (American Land Title Association)
    • includes survey
    • -benefit(Protect) lender
    • -paid by buyer in escrow
  38. Search Title through...
    • 1) County Clerk Office
    • 2) County recorder's office
    • 3) Federal land office
  39. Fire Insurance
    The insured should neither gain nor lose. 

    "Short rated"
  40. Escrow
    trust arrangement, such as Agent

    -Instruction executed by: seller, buyer, or third party with power of attorney
  41. Escrow Law
    govern by Financial Code
  42. Closing Statement (Escrow)
    purchase price debit the buyer

    prepaid taxes, fire insurance credit the seller
  43. 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
  44. Impounds
    1) Reserves (P.I.T.I, principal, interest, tax, insurance)

    2) a recurring cost
  45. Two termite report in Escrow
    • Section 1 paid by seller
    • Section 2 paid by buyer

    Reports to...Anyone entitles to...
  46. Escrow closed
    reports to IRS

    -is not responsible for call for funding of Loan

  47. 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
Card Set:
Chapter 3
2013-02-21 23:27:03

Title Burdens & Protections
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