Real Estate Principles, 11th Edition By Charles F. Floyd and Marcus T. Allen

Private Restrictions on Ownership Chapter 3 Private Restrictions on Ownership

Private versus Public Restrictions Private restrictions are non-governmental limitations on the owner’s ability to use a property. Public restrictions are governmental limitations on the owner’s ability to use a property Collectively, such restrictions are called “encumbrances” This chapter focuses on private restrictions. The next chapter focuses on public restrictions.

Covenants, Conditions, and Restrictions (CC&Rs) Private encumbrances that limit the way a property owner can use a property Recorded in public record Enforceable by parties who benefit from the limitations Generally “run with the land”

Close-Ups & Legal Highlights “Meadow Brook Ranch Use Covenants” “Validity of Restrictive Covenants” “Restrictive Covenant Disputes”

Liens A legal claim held by a lienor against a property owner’s property as security for a debt General lien – a lien against all property owned by lienee Specific lien – lien against a specific property item (a mortgage on a shopping center, for example)

Mortgage Lien Mortgage – a pledge of real property as collateral for a debt or other obligation A specific lien, usually voluntarily given by property owner Mortgagor is the borrower Mortgagee is the lender Foreclosure is the process used to enforce the pledge if the mortgagor defaults

Mechanics’ Liens Mechanic’s lien Security interest held by someone who supplies materials or labor for work of improvement and is not paid by the property owner for the materials or labor as agreed May lead to foreclosure if debt is not paid See Legal Highlight “A Cautionary Tale on Mechanics’ Liens”

Easement Right to use someone else’s property in a specified manner. Types of Easements Easement Appurtenant Dominant estate Servient estate See Figure 3.1 Easement Appurtenant Created by Joint Driveway Easement in gross

Creation of Easements Creation of Easements by: Express grant or reservation See Figure 3.2 Easement Created by Express Grant See Figure 3.3 Easement Appurtenant Created by Implied Reservation Implication Prescription See Legal Highlight “Prescriptive Easement” See Legal Highlight “The Case of the Landlocked Parcel”

Nature of Easements Permanent in nature – easements “run with the land” When dominant parcel is sold the new owner benefits from the easement When servient tenement is sold the new owner’s property is encumbered by the easement License – a revocable personal privilege to use land for a particular purpose

Termination of Easements Agreement Merger Abandonment

A Relatively New Type of Easement: The Conservation Easement A “negative” easement that prevents rather than provides a right to use a property in a specified manner Increasingly used for historical preservation or environmental protection See Close-Up “Use of Conservation Easements”

Profits & Encroachments Profit - profit a prende – a non-possessory interest that permits the holder to remove specified resources from the land Encroachment – an unauthorized invasion or intrusion of a fixture, building, or other improvement onto another owner’s property. May negatively impact value Best detected by boundary survey

Adverse Possession Process by which title to land is transferred from its legal owner to someone who openly possesses the land for a statutory time period without the permission of the owner. Requirements to obtain title by adverse possession Actual and exclusive Open and notorious Hostile Continuous Under a claim of right Statutory period See Legal Highlight “Adverse Possession”