Real Estate Fundamentals - Chapter 4: Encumbrances

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A special claim or interest in real property that is held by someone other than the owner and creates a limitation and/or burden to the real property owner is known as an encumbrance.

Explanation
An encumbrance refers to a claim or interest in real property that is held by someone other than the owner and creates a limitation or burden for the owner. This could include things like mortgages, liens, easements, or restrictions on land use. These encumbrances can affect the owner's ability to sell or transfer the property and may also impact its value. Therefore, the statement that an encumbrance is a special claim or interest in real property that creates a limitation and/or burden to the owner is true.

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A type of encumbrance that represents a special interest in real property without having ownership is known as an easement by cooperation.

Explanation
A type of encumbrance that represents a a special interest in real property without having ownership is called an "Incorpeal Right".

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The right to use land owned by another person for a specific purpose is known as an easement.

Explanation
An easement is a legal right to use someone else's property for a specific purpose. This means that even though you don't own the land, you have the right to use it in a certain way. This can include things like accessing a neighboring property through a shared driveway or having a utility line run through someone else's land. Therefore, the statement that the right to use land owned by another person for a specific purpose is known as an easement is true.

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An easement by prescription occurs where there are two adjacent properties with different owners and an easement exists whereby one property owner benefits and the other property owner suffers the burden.

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An easement in gross is a personal right to use the land of another owner. The most common examples of this type of easement would be the right given to utility companies to run electric, gas, telephone and cable lines through a property.

Explanation
An easement in gross is a personal right to use someone else's land. This means that the easement is not attached to any particular piece of land and can be transferred or sold separately from the land it benefits. Utility companies often have easements in gross to run their lines through properties, which makes the statement true.

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An easement by prescription is created automatically on land-locked land. An easement by prescription would be the only practical way an owner could get to or from a parcel of real property that is surrounded by one or more owners.

Explanation
An easement that is created automatically on land-locked land is called an "Easement by "Necessity".

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The taking of private property for public use with just compensation is legal and would be an example of an easement by condemnation.

Explanation
The statement is true because the taking of private property for public use with just compensation is a legal process known as eminent domain. Eminent domain allows the government to acquire private property for public projects such as building roads, schools, or parks. When this occurs, the property owner is entitled to receive fair compensation for their loss. An easement by condemnation is a specific type of easement that is created through the process of eminent domain. Therefore, the statement is correct.

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An encroachment occurs when the property of one owner, typically an improvement, extends beyond the property boundary line into the real property of an adjacent owner. Technically this amounts to trespassing.

Explanation
An encroachment occurs when a property extends beyond its boundary line and trespasses onto the adjacent property. This is considered trespassing because it involves one owner's property intruding onto another owner's real property. Therefore, the statement that an encroachment amounts to trespassing is true.

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Real estate salespersons should be aware that Pennsylvania requires a survey for all properties bought or sold. This law has been in effect since 1978.

Explanation
While some states require a survey for the purchase or sale of real esatate, Pennsylvania does NOT require a current survey.

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Real property boundary lines can only be determined with accuracy by a professional surveyor using a surveying instrument known as a transfer.

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A license is the temporary permission to enter and use the real property of another for a specific purpose. An example of a license would be a ticket that entitles the bearer to enter a stadium to watch a sporting event.

Explanation
A license is a temporary permission granted to individuals to enter and use someone else's real property for a specific purpose. This can be seen in various scenarios, such as a ticket that allows someone to enter a stadium and watch a sporting event. Therefore, the statement that the given explanation is true is correct.

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A legal claim by a creditor against the property of a debtor to obtain payment of a debt is known as a lean-to.

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Foreclosure is the legal procedure that a lender takes to recover money when a borrower defaults on the mortgage (breaks the mortgage contract usually as a result of of failure to make monthly mortgage payments) that can result in the loss of real property to the owner.

Explanation
Foreclosure is indeed the legal process that a lender initiates to recover money when a borrower fails to make monthly mortgage payments, resulting in a default on the mortgage contract. This procedure can ultimately lead to the loss of real property for the owner. Therefore, the statement "Foreclosure is the legal procedure that a lender takes to recover money when a borrower defaults on the mortgage that can result in the loss of real property to the owner" is correct.

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In most states it is possible for a borrower who is in default on a mortgage to prevent a foreclosure sale and return the mortgage to its original status by paying all amounts of the debt that are due plus costs. This is known as a defiency judgement.

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Pennsylvania law allows a mechanics lien to be filed by a tradesperson, builder, or contractor, subcontractor, or developer when some type of construction or repair work on real estate including material and/or labor has been ordered and completed but has not been paid for by the owner.

Explanation
Pennsylvania law permits a mechanics lien to be filed by various parties involved in construction or repair work on real estate if the work has been ordered and completed but remains unpaid by the owner. This means that tradespeople, builders, contractors, subcontractors, and developers have the legal right to file a mechanics lien in Pennsylvania under these circumstances.

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Pennsylvania law does NOT allow private property to be sold to satisfy unpaid tax liens.

Explanation
Pennsylvania ALLOWS the property to be sold at a TAX SALE so that local governments can receive the unpaid tax from proceeds of the property sale.

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Lien holders get paid from the sale proceeds of property in exact order of their lien position. Those who are listed as the first lien holder are paid first; second lien holders are paid second, etc.

Explanation
The explanation for the given correct answer is that lien holders are indeed paid from the sale proceeds of a property in the exact order of their lien position. This means that the first lien holder has the highest priority and will be paid first, followed by the second lien holder, and so on. This system ensures that each lien holder receives their payment in the appropriate order and protects their rights in the event of a property sale.

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A subordination agreement in effect lowers the lien position of a lender.

Explanation
A subordination agreement is a legal document that allows a lender to give up their priority position in favor of another lender. By doing so, the lender effectively lowers their lien position, meaning that they will have a lower claim on the borrower's assets in the event of default or bankruptcy. This can be advantageous for the borrower and the new lender, as it allows the new lender to take a higher priority in the event of foreclosure or other legal proceedings. Therefore, the statement that a subordination agreement in effect lowers the lien position of a lender is true.

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Whenever a lawsuit is filed against real property, such as in the case of a mortgage foreclosure or suit to quiet title, a notice of the lawsuit, called a cloud on the title is recorded in the county courthouse to alert any interested party of the pending litigation.

Explanation
The notice of a lawsuit against real property is called "Lis Pendens" which means litigation pending.

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At the conclusion of a lawsuit, the court issues an order known as a judgement. The order indicates that money is owed by a debtor to a creditor. A judgement represents a general lien that affects all real and personal property of the debtor.

Explanation
At the conclusion of a lawsuit, a judgement is issued by the court which signifies that a debtor owes money to a creditor. This judgement acts as a general lien, meaning it affects all the real and personal property of the debtor. This means that the creditor has the right to claim and seize any of the debtor's assets to fulfill the owed amount. Therefore, the statement "True" is the correct answer.

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