Liens and Encumbrances Affecting Real Property Ownership
By Dan Harkey claims restrict the unrestricted use of the property until the deficiencies are satisfied or negotiated into an equitable agreement of future actions . An encumbrance may be lifted , reconveyed , or modified .
1 ) Introduction :
Real estate is a hard asset and immovable . You can identify , visit , or own it with a governmentsanctioned bundle of rights . You may encumber the real estate for a loan by conveying a security interest to a lender . The security interest is attached to the property through a governmentcontrolled public records recording process . A county recorder is appointed or elected to manage the various documents that comprise the community ’ s records . Public records searches are open to the public .
Actions , agreements , and performances attached to real property in public recordings must comply with laws and regulations and modify or place subjectto conditions on one ' s ownership rights .
2 ) What is a Lien ?
A lien is a legal right or claim against real property , a security interest . The lien is given to a creditor ( lender ) to hold and possess until the loan is paid off .
Property owners / borrowers agree to willingly grant or convey a security interest in their real property by signing a deed of trust or mortgage . As an agreed consideration for the loan , this document must be recorded in a public records office to establish a recorded lien position as a lien attached to a particular real property .
Lenders / creditors are persons or companies who willingly place their capital into loans secured by a security interest in the property . The creditor / lender receives a recorded charging interest and claims against the collateral property .
A lien refers to a monetary ( money ) claim that will be attached to a property by a recording instrument and becomes an encumbrance on one or more properties .
3 ) What is an Encumbrance ?
An encumbrance refers to a legal claim or agreement to enforce rights and obligations relating to a property . The claims are against the property by an independent party such as a mutual property association , a courtordered lien , a municipal notification for substandard conditions or a government agency . The
There are dozens of events and actions memorialized in written agreements instruments that may be recorded in public records , creating either a lien or an encumbrance on the property . Here are a few :
a . An originally recorded tract map by the state of jurisdiction for the entire neighborhood . b . Utility and other easements , governmentmandated conditions such as historical property registries , longterm leases , agreedon encroachments , air and subsurface rights , height , and view restrictions . c . Mutual association bylaws , covenants , conditions and restrictions , entity ownership and partnership agreements , tenancy leases , various public notices such as weed abatement , and notifications of substandard conditions . d . Lis pendens , property settlements by adverse parties , divorce decrees , subordination , nondisturbance , and attornment agreements ( commonly abbreviated as an " SNDA "), parking easements , reciprocal parking agreements , signage easements , and memorandums of agreement or understanding . e . Property taxes , federal or state tax liens , zoning laws , environmental regulations , etc .
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