1. California Real Estate Principles, 10.1 Edition
Chapter 7
Encumbrances, Liens, and Homesteads

2. Chapter 7
1. Define encumbrance, lien, easement, and encroachment 2. Explain the difference between private deed restrictions and public restrictions 3. Describe the key characteristics of mechanic’s liens, tax liens, and judgment liens 4. Discuss the details of the California homestead law

3. Encumbrance = BURDEN ON TITLE
PHYSICAL = Non-money encumbrances
LIENS = Money encumbrances
Monetary and various liens
Voluntary
Involuntary
Specific
General
LIEN

4. EASEMENT
The limited right to enter and use all or a portion of the land of another
Two classes of easements:
Easement APPURTENANT
Dominant tenement
Servient tenement
Easement IN GROSS
Utility company

5. EASEMENT

6. Creating an Easement Deed : May Grant or Reserve
By Necessity or by Implication ( according to utility)
Dedication - Recorded Plat Map
Condemnation- Government- serve public
Prescription- Four requirements- page 178

7. Easement by Prescription
Actual, open and notorious use
Continuous use (5 years, uninterrupted)
Hostile (without permission of owner)
Claim of right or
color of title
5. No need to pay property taxes

8. Terminating an Easement
Express release by deed
Abandonment
Destruction of servient tenement
Expiration
Merger
Lack of use for 5 years (Prescriptive easement only)

9. Statute of Limitations is three years
Encroachment
The wrongful extension (trespass) of a structure or any improvement (partially or wholly) onto the property of another.
A B
Encroachment B’s garage or shed
*Not covered by standard CLTA title insurance policy.
**May become prescriptive easement or adverse possession
Statute of Limitations is three years

10. RESTRICTIONS Private Covenants: (C C & R’s) Covenant = A PROMISE
Condition: A limitation on ownership
Restriction: Discrimination is unenforceable
2. Public Restrictions
Zoning Ordinances
Building codes
Safety codes
Health codes

11. $ LIEN $ DEED Deed of Trust - Trust Deed Mechanic’s Lien Tax Lien
Assessment
Water District Bond
Sidewalks
Street Lights
Curbs & Gutters
Judgment Lien

12. Filing a Mechanic’s Lien- pg. 182
Priority determined by date of work commencement
Preliminary Notice:
States workers right to file a lien
20 Days after work starts
Work considered complete:
Owner occupies the property
Owner accepts the work as completed Work stops
Work stops for continuous 60 days

13. Statutory Time Periods:
Notice of Completion filed
Original Contractor: 60 Days after filing
All Others: 30 Days after filing
No Notice of Completion filed:
Everyone: 90 Days after Completion
Once Mechanic’s Lien is filed
Must execute in 90 Days after filing

14. MECHANIC’S LIEN Days (in number order)
10 Notice of Non Responsibility (Tenant orders work)
Preliminary notice
Subcontractors and others
General contractor
Everyone…if No Notice of Completion
90 Statute of Limitations

15. JUDGMENT LIEN Created by a Court of Law
The judgment process:
Writ of Attachment
Court ordered to seize the property
Judgment
Court’s decision
File an Abstract of Judgment
Lien created for 10 years
Recording establishes a General Lien
Writ of Execution
Sale of the property ordered

16. Major Types of Tax Liens
Unpaid Real Property Taxes Unpaid Federal Income Taxes Unpaid State Inheritance Taxes Unpaid Gift Taxes

17. Declaration of Homestead
Recorded Document
Designed to protect homeowner’s equity
Filed showing “Head of Household”
Declare claimant is residing on property
(Home, boat, motor home, mobile home on a lot)
Description of property
Owner-occupied residence
Only ONE homestead at a time

18. HOMESTEAD PROTECTION Single person $75,000 Head of Household $100,000
Senior (age 65 + ) $175,000
Elder (age 55) with low income $175,000
As of January 2016

19. Proceeds from forced sale go to:
1. Discharge prior liens 2. Exemption to homestead claimant 3. Satisfaction of the judgment 4. Balance to claimant

20. Termination of a homestead
Sell the home
File a Notice of Abandonment