Real Estate Fundamentals - Chapter 4: Encumbrances

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  • 1/20 Questions

    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.

    • True
    • False
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Property Law Quizzes & Trivia
About This Quiz

Explore key concepts of real property encumbrances in this focused quiz. It assesses understanding of easements, encumbrances, and legal limitations affecting property rights, essential for real estate professionals and students.

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  • 2. 

    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.

    • True

    • False

    Correct Answer
    A. True
    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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  • 3. 

    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.

    • True

    • False

    Correct Answer
    A. True
    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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  • 4. 

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

    • True

    • False

    Correct Answer
    A. True
    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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  • 5. 

    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.

    • True

    • False

    Correct Answer
    A. True
    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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  • 6. 

    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.

    • True

    • False

    Correct Answer
    A. True
    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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  • 7. 

    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.

    • True

    • False

    Correct Answer
    A. True
    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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  • 8. 

    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.

    • True

    • False

    Correct Answer
    A. True
    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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  • 9. 

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

    • True

    • False

    Correct Answer
    A. False
    Explanation
    This claim is called a "Lien".

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  • 10. 

    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.

    • True

    • False

    Correct Answer
    A. True
    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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  • 11. 

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

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The surveying instrument is called a "Transit"

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  • 12. 

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

    • True

    • False

    Correct Answer
    A. False
    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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  • 13. 

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

    • True

    • False

    Correct Answer
    A. False
    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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  • 14. 

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

    • True

    • False

    Correct Answer
    A. True
    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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  • 15. 

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

    • True

    • False

    Correct Answer
    A. True
    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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  • 16. 

    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.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    This is known as the "Right of Redemption".

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  • 17. 

    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.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    This is known as an "Easement Appurtenant"

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  • 18. 

    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.

    • True

    • False

    Correct Answer
    A. False
    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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  • 19. 

    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.

    • True

    • False

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

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  • 20. 

    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.

    • True

    • False

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

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  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Jul 26, 2011
    Quiz Created by
    Sseveland

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