Real Estate Liens, Easements, and Encroachments Explained

Real Estate Liens, Easements, and Encroachments Explained

Private ownership of real property or land is a right in America. However, it is not an absolute right. There are limitations on ownership, and there are ways in which you can lose your property legally. There are three limitations on property or land ownership explained here, and it is surprising to some just how many properties have one or more of these involved in their ownership. When purchasing a piece of land you must take the time to conduct your due diligence in these areas.

Liens

A lien is a property ownership or partial ownership right that is conferred upon someone or an entity to guarantee a debt. Until that debt is paid in full, there is a lien on the property that gives the lender certain rights. Liens on property are a matter of public record, and there are varied sources for liens including:

•   Property taxing jurisdictions

•   Contractors hired for repairs and renovations (Property improvements to the land)

•   Mortgages

•   HOAs (Homeowner Associations)

•   Condominium Associations

•   Liens through court judgements

•   Other creditors that lend with the property or land backing the loan

Often there are existing liens on properties up for sale. Part of the closing process is discovering those liens in county records and making their payment in full a requirement to close the sale and surrender title to the new owner.

Easements

Unlike a lien, an easement does not confer ownership rights; instead it confers the right of another party to use a property/land or portion of a property/land owned by another. Easements usually pass from one owner to another in the deed and are not easily removed unless the description of the easement sets out a condition for removal.

The most common type of easement is for utilities. There are easements for the installation and maintenance of pipelines, electric lines, and other utilities. Especially in developed areas, many of the properties will have easements along the property lines for these utilities. Though the property is owned by the owner on the deed, their use of the piece of the property defined in the easement is limited. Though an owner may put a storage shed on an easement, they could find that they will be required to move it if maintenance of underground utilities is required.

In rural areas, there can be some interesting easements found in deeds that just keep passing forward to the new owners. They can be for access across a property to reach an adjacent property. This can be common in some areas where parcels are “landlocked,” meaning they cannot be accessed without crossing properties owned by others.

Encroachments

When a structure or other object owned by another is placed on an adjacent property they do not own, it becomes an encroachment on that other property. Quite common is a fence that is installed and found later to be on the wrong side of a property line. A driveway that crosses, even for just a few feet, the property of another is an encroachment.

In rural land there are often old roads that are no longer used, but which cross a property and become an encroachment shown in surveys, and the title company excepts them from coverage due to their existence and the possibility of a future claim. Old fence line encroachments are common, and the best way to end the ongoing process is to remove them before selling the property.

The place where a potential property buyer will see any of these clearly laid out is in the title insurance binder with the property records search items set out. Potential buyers should ask any questions necessary to understand what does exist, what will go away by closing, and what will pass forward.

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