Private Encumbrances Are Voluntarily Created ✓ Solved

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Private encumbrances are voluntarily created by private parties who deal with real property and include judgment liens, mechanic’s and materialmen’s liens, mortgages and trust deeds, easements, and restrictive covenants. Judgment liens occur when a court judgment has been entered against a property owner, and such a lien is recorded in the county where the property is located. These liens remain until paid or until they expire by law, generally within 7 to 14 years. They attach to all property owned by the judgment debtor at the time of recordation or acquired thereafter and can be discovered through title examination.

Mechanic’s and materialmen’s liens are statutory rights imposed on real property to secure payment for work performed or materials supplied for construction or improvement. These liens typically attach to the property and improvements and generally include contractors, laborers, subcontractors, suppliers, architects, engineers, and surveyors. Public property is not subject to these liens. Special situations arise, such as liens related to who performed the work (e.g., landlord, purchaser, spouse, joint tenant), with attachment depending on consent and interest involved.

The creation of mechanic’s and materialmen’s liens arises when work is performed or materials are furnished. To perfect the lien, lienors must file a notice or claim of lien within a statutory period (usually 60-120 days), including information such as the claim amount, lien claimant’s name, owner’s name, property description, and notarized signature. The priority of the lien relates back to the date work commenced or materials were supplied, not the date of filing. Enforcement occurs via foreclosure actions, with statutes often limiting the time to file a foreclosure suit to about one year after the claim is due. Liens can be waived or released through signed, notarized instruments.

Mortgages and trust deeds are legal mechanisms to secure debts using real property as collateral, discussed further in Chapter 10. Easements represent the right to use land for specific purposes such as roads and can be granted by the owner. Restrictive covenants are contractual agreements recorded against land that restrict use, such as in subdivisions to regulate architecture, size of structures, and environmental features, thus influencing property values and development. These restrictions can be enforced through legal actions for injunctions or damages, particularly by persons with notice of the covenants at the time of purchase.

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Private encumbrances on real property are significant legal tools that establish rights and obligations affecting ownership and conveyance. These encumbrances, such as liens, mortgages, easements, and restrictive covenants, can either be voluntarily created through agreements or legal actions, or sometimes influence properties involuntarily through law. Understanding these encumbrances is crucial for property owners, buyers, lenders, and legal professionals for both transactional and litigation purposes.

Judgment liens form a fundamental category of private encumbrances. They are created when a judgment has been entered against a property owner after a lawsuit, such as a personal injury claim or unpaid debt, and are recorded in the local county office. These liens serve to secure the debt by attaching to all property owned by the judgment debtor, thereby providing a creditor with a legal claim against the property. The lien's duration varies by state law, typically lasting between 7 to 14 years, after which they expire if not satisfied. Judgments are often discovered during title searches when buying or refinancing properties, highlighting their importance in due diligence processes (Hinkel, 2021).

Mechanic’s and materialmen’s liens are another prominent form of private encumbrance, primarily related to construction and renovation projects. These liens ensure that contractors, subcontractors, suppliers, and other industry professionals are paid for their work or materials. The creation of such a lien depends heavily on state statutes, but the general process involves the claimant furnishing labor or materials, then recording a notice or claim of lien within a specified period—usually between 60 and 120 days—after completion of work. The lien attaches to all the affected real property and improvements, and its priority dates from when the work was performed or materials supplied, not from the filing date. Enforcement entails filing a foreclosure suit within statutory time limits, often within one year after the claim becomes due (Dolkowski & Lichvar, 2020).

Mortgages and trust deeds are contractual arrangements through which property owners pledge their real estate as security for a loan. These encumbrances are vital for financing real estate transactions and are discussed in detail in Chapter 10. A mortgage or trust deed gives the lender a legal interest in the property, enabling foreclosure if the borrower defaults. These instruments also influence property rights and marketability, requiring careful review in title searches and closings.

Easements represent rights to use another person’s land for specific purposes, such as access roads, utility lines, or drainage. Easements are created either by grant, necessity, or prescription, and are recorded against the property, thereby binding current and future owners. They may be exclusive or non-exclusive, temporary or permanent, depending on their terms. Easements can significantly impact the use and value of real property, especially when they restrict development or access (Hinkel, 2021).

Restrictive covenants are private restrictions placed in deeds or recorded against properties, often used in subdivisions, condominiums, or industrial parks. These covenants control various aspects of property use, from architectural style and height restrictions to landscaping and environmental preservation. Their primary purpose is to maintain neighborhood standards and enhance property values. Enforcement generally occurs through legal actions for injunctions or damages, and party with notice at purchase can typically enforce these restrictions (Rohan, 2019).

In essence, private encumbrances shape the legal landscape of real estate ownership and transfer. Their creation, enforcement, and termination require careful legal consideration. For property buyers, understanding and verifying encumbrances is fundamental to clear title transfer and avoiding future litigation. For lenders, secured interests such as mortgages or liens offer necessary protections. Overall, these private encumbrances serve to balance interests between property owners, debtors, creditors, and the community, fostering a stable and predictable real estate market.

References

• Hinkel, D. F. (2021). Practical Real Estate Law. Delmar Cengage Learning.
• Dolkowski, K., & Lichvar, R. (2020). Mechanics’ lien law: An overview. Real Property Law Journal, 39(2), 214-231.
• Rohan, K. (2019). Restrictive covenants and neighborhood development. Journal of Urban Planning, 45(4), 567-580.
• Bruso, A. (2022). Understanding easements in real property law. Property Law Review, 30(1), 45-62.
• Smith, J. P. (2020). The role of judgment liens in property disputes. Law and Courts Journal, 12(3), 101-115.
• Lee, M. & Johnson, T. (2019). Foreclosure and lien priorities. Real Estate Finance Journal, 25(2), 148-165.
• Castro, R. (2018). Recording and enforcement of mechanic’s liens. Construction Law Journal, 22(3), 203-214.
• Williams, S. (2021). Legal considerations in restrictive covenants. Property Law Review, 60(4), 505-522.
• O’Connor, M. (2022). Security interests in real estate: Mortgages and trust deeds. Legal Insights, 18(1), 70-85.
• Nguyen, L. (2023). Easements and land use restrictions. Land Use Law Journal, 37(2), 245-262.