Real Estate: Private Restrictions on

Ownership

What are Encumbrances?

• Are restrictions and limitations on the fee simple ownership rights that generally run with the land– Private– Public

Private Encumbrances

• Covenants, conditions, restrictions• Liens• Easements• Profit a prendre• Adverse possession• Encroachments

Covenants, Conditions, Restrictions (CC &Rs)

• Are private encumbrances that limit the way a property owner can use a property

• Deed Restrictions– Created by developer– i.e. land across from Central Baptist Church in College

Station

What is a Lien?

• Is a claim on a property as either security for a debt or fulfillment of some monetary charge or obligation– i.e. mortgage on property to borrow money

• Voluntary Lien– Placed on property by owner

• i.e. mortgage

• Involuntary Lien– Protect the interest of persons who have valid claims against the

owner of real property• i.e. unpaid taxes, lawsuit

Liens

• Specific Liens– Created to protect creditors using a particular parcel of real

estate as security for repayment. 2 types:

1. Mortgages• Mortgagor (gives property rights, i.e. homeowner), • Mortgagee (receives property rights, i.e. bank)• Foreclosure

2. Mechanics’ Liens (aka construction lien)• General Liens

– Placed on all of the property that might be owned by an individual, including any real estate

• i.e. judgment lien, income tax lien (involves judicial sale)

What is an Easement?

• Easement

• Is a right given to one party by a landowner to use the land in a specified manner

• i.e. utility, oil & gas, ranch access

• 2 types of Easements1.Easement Appurtenant2.Easement in Gross

2 Types of Easements

1. Easement Appurtenant– Exists when an easement is legally

connected to an adjoining property• Dominant Estate (Benefits from Easement)• Servient Estate (Burdened by Easement

2. Easement in Gross– Only has servient estate (no Dominant

Estate)• i.e. Utility company, not adjoining property,

benefits from easement

Easement Example

How do you create an Easement?

• 3 Methods of Creation1.Express Grant or Express Reservation2.Easement by Implication3.Easement by Prescription

Creation of Easements

1. Express Grant or Express Reservation– Express Grant

• i.e. Expressly grant neighbor the right to use a portion of property for driveway (created by Grantor)

– Express Reservation• i.e. “reserve a right of passageway” (created by

Grantee)

Creation of Easements

2. Easement by Implication– Right to use land may be implied from the factual

circumstances even when an easement is not expressly created

– Reflects intentions of the parties• Implied Grant• Use of property allowed, despite having made not

mention of an easement (Grantor)• Implied Reservation• Occurs when continued use of the property is allowed

after property is (Grantee) – Both arise from necessity

• Land would lose all value in no access allowed

Creation of Easements

3. Easement by Prescription– May be created when someone other than the

owner uses the land “openly, hostilely, and continuously” for a statutory time period.

• Usually between 7 to 20 years, uninterrupted

– Lesson: • Never let anyone use property w/out permission• Interrupt property use at intervals

Nature of Easements

• “Permanent in nature”– Easements “run with the land”

• Easement is not a “license”– Licenses are revocable

Termination of Easements

• Agreement• Merger• Abandonment

Termination of Easements

• Agreement– Parties affected by easement may expressly

agree to terminate their respective rights in the easement

• Must be written• Can be costly, and have time restrictions

• Merger– Merger of dominant and servient estate can

terminate easement• i.e. Servient estate could purchase dominant

estate’s parcel

Termination of Easements

• Abandonment– If the benefited party does not exercise his or

her rights to use the servient estate over an extended period of time

Conservation Easement

• A type of “Negative Easement” (vs. “Affirmative Easement”)– Prevents specific uses of the real estate by

the owner• i.e. protects land from being developed. Preserves

natural area

Profit a Prendre

• Is a nonpossessory interest in real property that permits the holder to remove part of the soil or produce of the land– i.e. minerals, soil, produce, animals

Encroachment

• Is an unauthorized invasion or intrusion of a fixture, a building, or other improvement onto another person’s property– i.e. fence cuts across adjoining property

• If not confronted, other party may claim legal right to adverse possession

Adverse Possession

• Allows individuals to acquire title to land they do not own because they have openly possessed it for a statutory period of time

• “Squatter’s Rights” -- http://www.youtube.com/watch?v=z2S9b40ITNM

– Actual and exclusive• i.e. building a house on land or farming land

– Open and notorious, hostile, & continuous• Same as prescriptive easement

– “Claim of Right• Adverse possessor must have a basis for believing

he/she owns property