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Non-financial

encumbrances
Non- Financial Encumbrances
Encumbrance is a claim or liability against
real estate, held by someone other than the
fee owner of the property that affects the title
to the property, and therefore its value. It
does not confer any possessory interest, and
therefore is not an estate, and does not
necessarily prevent the transfer of title.
Encumbrances can include liens against the
property, deed restrictions, easements, and
encroachments.
Lien is a claim against the property which
serves as collateral for a debt. The lien holder
has the legal right to go to court to have the
property sold to satisfy the debt, if it is not
paid. Unpaid real estate taxes or mortgage
payments can result in a lien against the
property. Anyone who works on the property
and is not paid can file a mechanics lien
against the property. The liens transfer with
the property, so if they are not paid when the
real estate is sold, then the new owner
becomes liable for the debts.
Restrictive Covenants and Deed Restrictions
(aka conditions, covenants, and restrictions, or
CC&Rs) - are private agreements that
restrict the use of the real estate in some
way, and are listed in the deedhence the
name. The seller may add a restriction to
the title of the property. Often, developers
restrict the parcels of property in a
development to maintain a certain amount
of uniformity.
Encroachments - is an extension of some
physical structure, such as a building,
driveway, fence, or tree over the property
lines from an adjoining property.
Encroachments can affect the marketing of
the title, and should be noted in a listing
agreement or sales contract.
Easements - is the right of someone other
than a fee owner to use a particular parcel
of land for a particular purposemost often
it is the right to cross the property.
Appurtenant easement (aka appurtenance) - is a
right to use adjoining property that transfers
with the land. The parcel of land that
benefits from the easement is the dominant
tenement, whereas the servient tenement is
the parcel of land that provides the
easement. The appurtenant easement
always transfers with the land unless the
owner of the dominant tenement releases it.
Easement in gross - is an individual interest
to use the landit benefits a person or an
organization, in contrast to an appurtenant
easement, which benefits the land. Often,
businesses, such as railways and phone
companies, hold commercial easements in
gross so that they can conduct business.
Utility easements, which allow utilities to
run electric wires or pipelines across
properties, are also easements in gross.
The Creation of Easements
Easements are created by either express
agreement or by implication. In many cases, an
owner creates an easement for himself when
selling a parcel of his land or gives an easement to
a buyer of the property to pass over his land
because of convenience or necessity.
One of the rights of owning land is to be able to
enter or leave it, but some parcels of land are
isolated from public thoroughfares by other private
properties. In these cases, an appurtenant
easement is created by a court order as an
easement by necessity, because the dominant
tenement owner has no other way of entering or
leaving his property.
Sometimes the easement is created by implication,
such as through long-time use or by prescription.
Easement by prescription - is created through
long-term use, where the owner knows about
the easement, but did not prevent its use. The
length of time required is usually set by state
law, typically 10 to 21 years, and the use must
have been continual and without the owners
approval, but with the owners knowledge. The
required time period to establish the easement
by prescription can be accomplished through
tacking, where successive ownerssuccessors
in interestof the dominant tenement continue
to use the easement continually.
Easement by condemnation - is created by
eminent domainowners of the servient
tenement must, however, be compensated
for providing the easement.

Party easement - is created by written


agreement between parties concerning a
common boundary, such as a shared party
wall, a fence, or a driveway, especially
between adjacent townhouses or row
houses.
Terminating an Easement
An easement can be terminated in numerous
ways, especially when the reason for the
easement no longer exists, or it makes no sense,
such as when both dominant and servient
tenements are bought by the same owner
(termination by merger), or when the use of the
easement changes significantly, for instance, by
greatly increased traffic, or the owner of the
dominant tenement releases the easement. The
easement may also terminate if it is abandoned.
In some cases, certain legal actions may be
required before the easement is actually
terminated.
Licenses
A license, unlike an easement, is having the
permission of the ownerthe licensorto enter
his land for a specific purpose. Unlike an
easement, the license can be rescinded at any
time. A license will also terminate upon the death
of either the licensee or the licensor, or if the
licensor sells the land. Hence, although a license
is similar to an easement, a license is not actually
an encumbrance on the real estate and does not
transfer with the title.
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