encumbrance
a right or interest in a property held by a party who is not the owner of the property. Any claim by another - such as a mortgage, a tax or judgment lien, an easement, an encroachment, or a deed restriction on the use of the land - that may diminish the v
liens
financial claims against the property; provides security for a debt or obligation of the property owner; Foreclosure of the Lien occurs if the claim is not paid, the lienholder, or creditor, may ask a court to order the real estate sold to pay off the deb
Voluntary liens
is created by the owner's action, such as placing a mortgage loan.
involuntary lien
is created by law. A real estate tax lien, taxes, special assessments, for example, are involuntary liens; placed on the property without any action by the property owner or consent from property owner
General lien
The right of a creditor to have all of a debtor's property - both real and personal - sold to satisfy a debt. Include judgments, estate and inheritance taxes, debts of a deceased person, corporation franchise taxes, and federal and state income taxes.
specific liens
A lien affecting or attaching only to a certain specific parcel of land or piece of property. Include mechanics' liens, mortgages, real estate taxes, special assessments, liens for certain public utilities, vendors' liens, vendees' liens, and surety bail
Liens cont'd
Real estate taxes always have the first recorded claim against the property. They trump all recorded liens on property. The oldest recorded lien has priority over subsequent liens BUT real estate taxes always supersede and have priority over all other rec
Liens cont'd
JUDGMENTS are court orders to pay a debt, such as an unpaid bill. They become liens against all real property owned by an individual in that county when they are docketed (filed) in the county clerk's office. MECHANICS' LIENS are placed against a specific
Usage encumbrances
restrictions, easements, and encroachments
Effects of liens on title
If the buyer agreed, an owner could sell a parcel of real estate even though it was encumbered by a lien. The lien, however, remains with the property because liens and other encumbrances run with the land; that is, they will bind successive owners.
Liens
Tax liens (special assessments)
Real estate taxes and special assessments (tax liens) generally take priority over all other liens. If the property goes through a court-ordered sale to satisfy unpaid debts or obligations, outstanding real estate taxes and special assessments will be pai
Tax liens cont'd
Liens other than general taxes and special assessments take priority from the date of recording in the public records of the county where the property is located. Basically, the oldest recording will take priority.
subordination agreements
are voluntary written agreements between lienholders to change the priority of mortgage, judgment, and other liens under certain circumstances. Leases on income generating properties usually have a subordination clause, this clause places the interests of
mortgage lien
voluntary lien on real estate given to a lender by a borrower as security for the repayment of a loan. It becomes a lien on real property when the mortgage funds are disbursed and the mortgage document is signed by the borrower (mortgagor) and delivered t
mechanic's lien
covers a situation in which an owner has not paid for work done on the property or the general contractor has been paid but has not paid subcontractors or suppliers of materials. A claim for a mechanic's lien must be placed within four months of the compl
mechanic's lien cont'd
An example of a lien that falls into the eight-month filing deadline category would be a broker's lien. New York's lien law allows certain broker claims for leasing commissions to be filed. A broker may enter a lien in the public records for unpaid commis
affidavit of entitlement to commission
A document claiming commission that may be entered in the public records but does not become a lien against the property. Usually requested by the RE broker.
Commission Escrow Act
NY legislature passed this bill which aids residential real estate brokers in collecting their commission on a residential sale. The amendment provides that an affidavit of entitlement filed by the broker before a closing would require the seller to depos
judgement
a court order or decree issued by the court. When the decree provides for money to be awarded to the creditor, it is referred to as a money judgment. A judgment becomes a general involuntary lien on all real property in the county owned by the debtor when
judgement cont'd
A judgment takes priority from the date the judgment is docketed in the county clerk's office. In order to satisfy a judgment creditor, judgments can be enforced through the sale of the debtor's real or personal property by a sheriff. A judgment also can
lis pendens or notice of pending legal action
Considerable time may elapse between the filing of a lawsuit and the rendering of a judgment or other decree. When any suit is filed that affects title to a parcel of real estate, a lis pendens (or notice of pending legal action) is immediately recorded t
estate taxes or state inheritance taxes
Federal estate taxes and state inheritance taxes (as well as the debts of deceased persons) are general involuntary liens that encumber a deceased person's real and personal property. These are normally paid or cleared in surrogate court proceedings.
vendor's lien
is a seller's claim in cases where the seller did not receive the full agreed-on purchase price
vendee's lien
is a buyer's claim against a seller's property in cases where the seller failed to deliver title. This may occur when property is purchased under an installment contract (contract for deed, land contract), and the seller fails to deliver title after all o
municipalities' lien
Municipalities that furnish water or services, such as refuse collection, are given the right to a lien on the property of an owner who refuses to pay bills.
surety bail bond
A real estate owner who must stand trial for a crime may choose to put up real estate instead of cash as surety for bail (or other family members may pledge their real estate).
corporation franchise tax
a condition of allowing a corporation to do business in the state. Such a tax is a lien on all property, real and personal, owned by the corporation. NYC also imposes a tax on corporations doing business in the city, which becomes a lien on the corporatio
environmental lien
may be levied by the federal government for costs and damages incurred in removal or remedial action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the environmental cleanup act. The lien attaches only to the pro
IRS tax lien
results from failure to pay any portion of federal income or withholding taxes. It is a lien on all the taxpayer's real and personal property.
other liens
include those for unpaid condominium common charges in favor of the board of managers or condominium association; liens for unpaid maintenance or other charges in favor of a cooperative corporation; and liens for New York State income and transfer taxes a
deed restrictions and covenants
Private agreements that affect the use of land. They usually are placed by the owner when the property is sold, and they may be included in the deed. Deed restrictions typically are imposed by a developer to maintain specific standards in a subdivision or
easement
A right acquired by one party to use the land of another party for a special purpose (like a right of way-The right to pass over another's land more or less frequently according to the nature of the easement or for utilities). Easements commonly are creat
easement appurtenant
The permanent right to use another's land for the benefit of a neighboring parcel; involving adjacent parcels that runs with the land (is permanently attached), so that subsequent owners are bound by it, and it passes with the land when conveyed. For ex:,
easement appurtenant cont'd
The property that benefits is called the dominant estate; the one that is used is the servient estate. In the example above, B's property, which can use the neighbor's land, is the dominant estate; A's property, which must allow the use, is the servient e
easement in gross
A mere right to use the land of another; Such an easement does not involve any adjoining estate. Common examples are the right to run high-tension, telephone, or cable TV lines.
easement by necessity
In certain cases, the only access to a parcel is through another's property; that is, entry to one's property is landlocked by the property of another. In this situation, the owner may acquire an easement by necessity to reach his or her land. An easement
easement by implication
Arises when 'reasonably necessary' and created by the actions of the parties involved.
easement by prescription
Under specific circumstances, one may acquire the permanent right to use another's property by doing so for a period (in New York) of ten years, creating an easement by prescription. Tacking allows consecutive owners to accumulate the ten years' usage. (A
easement by grant
Less common type; one created deliberately, usually through a deed, by the landowner
easement by condemnation
The government's right to use private property, for example, to build a sidewalk.
easement for light and air
An owner has no natural right to light and air and cannot complain when a neighbor erects a structure that cuts off his or her light and air. To eliminate this possibility, some abutting owners attempt to purchase an easement for light and air over a neig
possessory rights
or possessory occupation is the act of property occupation and indicates and implies certain rights inherent to the occupant
nonpossessory rights
indicate that a person does not occupy the property nor has any rights to that property
party wall
is shared by two buildings and constructed on the boundary line between two owners' lots. Each owns his or her side of the party wall and an easement right in the other half. A party wall may not be demolished without the consent of both owners. Each owne
encroachment
A building or some portion of it - a wall or fence, for instance - that extends beyond the land of the owner and illegally intrudes on some land of an adjoining owner or a street or alley. Usually discovered by a inspection or survey of property.
adverse possession
Encroachments of ten years may give rise to ownership by adverse possession (a method by which title to real property is acquired if possessed but not owned for a statutorily prescribed period of time under certain conditions) or an easement by prescripti
license
Not classified as an encumbrance because it is not a permanent right, a temporary privilege to enter the land or to use something of another for a specific purpose is known as a license. Examples of license include permission to park in a neighbor's drive