Key Takeaways
- Easements appurtenant benefit adjacent property and run with the land; easements in gross benefit specific persons or entities.
- Lien priority follows "first in time, first in right" with property tax liens holding super-priority.
- Mechanic's liens may relate back to the date work commenced, potentially disrupting expected priority order.
- Restrictive covenants run with the land but cannot violate public policy or fair housing law.
- Encumbrances affect property use and value even though they do not prevent ownership transfer.
Encumbrances are claims, charges, or liabilities that attach to real property and affect its use or transferability. They do not prevent ownership transfer but they "travel with the land," binding subsequent owners. Understanding encumbrances is critical for title examination, property valuation, and transaction structuring.
Key Stakeholders
Easements
An easement is a non-possessory right to use another person's land for a specific purpose. Easements appurtenant benefit an adjacent property (the dominant tenement) and burden the property subject to the easement (the servient tenement). A common example is a driveway easement that allows the owner of a landlocked parcel to cross a neighbor's property to reach a public road. Easements appurtenant run with the land, meaning they transfer automatically to subsequent owners of both the dominant and servient tenements.
Easements in gross benefit a specific person or entity rather than an adjacent property. Utility easements are the most common example — a power company holds an easement in gross that allows it to run power lines across private property. Unlike easements appurtenant, personal easements in gross are typically not transferable, while commercial easements in gross (such as utility easements) usually are. Easements can be created by express grant, reservation, implication, necessity, or prescription (long-term adverse use).
| Easement Type | Definition | Duration | Created By | Impact on Value |
|---|---|---|---|---|
| Appurtenant | Benefits adjacent property (dominant tenement) | Perpetual (runs with the land) | Express grant, reservation, or implication | Increases dominant; may decrease servient |
| In Gross | Benefits a person or entity, not adjacent land | Varies — commercial are transferable | Express grant or statute | Typically modest negative impact on servient |
| Prescriptive | Acquired through long-term adverse use | Perpetual once established | Continuous open use for statutory period | Negative — limits owner control |
| By Necessity | Access to landlocked parcel | Lasts as long as necessity exists | Implied by law when parcel is landlocked | Essential for landlocked parcel value |
| Conservation | Restricts development to protect natural features | Typically perpetual | Voluntary agreement with land trust or government | Reduces development value; may provide tax benefits |
Liens: Voluntary and Involuntary
A lien is a financial claim against property that serves as security for a debt or obligation. Voluntary liens are created by agreement, with mortgages being the most common example — the property owner voluntarily pledges the property as collateral for a loan. Involuntary liens are imposed without the owner's consent and include property tax liens, mechanic's liens (for unpaid construction work), judgment liens (arising from court judgments), and federal tax liens.
Lien priority determines the order in which liens are satisfied when a property is sold or foreclosed. The general rule is "first in time, first in right" — earlier-recorded liens have priority over later ones. However, property tax liens have priority over all other liens regardless of recording date, and mechanic's liens in some states relate back to the date work commenced rather than the date the lien was filed. Understanding lien priority is essential for evaluating title quality and structuring financing.
| Lien Type | Voluntary/Involuntary | Priority Rule | Duration |
|---|---|---|---|
| Mortgage | Voluntary | Date of recording | Until satisfied or foreclosed |
| Property Tax | Involuntary | Super-priority (always first) | Until paid |
| Mechanic's Lien | Involuntary | Varies by state — may relate back | Filing deadline varies by state |
| Judgment Lien | Involuntary | Date of recording | Varies (typically 5-20 years) |
| Federal Tax Lien | Involuntary | Date of filing | 10 years from assessment |
| HOA Lien | Involuntary | May have super-priority in some states | Until paid |
Deed Restrictions and Covenants
Deed restrictions (also called restrictive covenants or CC&Rs — covenants, conditions, and restrictions) are private limitations on property use imposed by a previous owner or developer. They are commonly used in planned communities and subdivisions to maintain property values and neighborhood character. Common restrictions include limitations on property use (residential only), architectural standards (minimum square footage, approved exterior materials), prohibitions on certain activities (no home businesses, no livestock), and maintenance requirements.
Restrictive covenants run with the land and bind all subsequent owners. They are enforced through civil lawsuits by other property owners in the community or by homeowners associations. Courts will not enforce restrictions that violate public policy — for example, racial restrictive covenants were declared unenforceable by the Supreme Court in Shelley v. Kraemer (1948), and the Fair Housing Act of 1968 made them illegal. Some restrictions may become unenforceable through abandonment (widespread non-compliance) or changed conditions that make the restriction unreasonable.
Key Takeaways
- ✓Easements appurtenant benefit adjacent property and run with the land; easements in gross benefit specific persons or entities.
- ✓Lien priority follows "first in time, first in right" with property tax liens holding super-priority.
- ✓Mechanic's liens may relate back to the date work commenced, potentially disrupting expected priority order.
- ✓Restrictive covenants run with the land but cannot violate public policy or fair housing law.
- ✓Encumbrances affect property use and value even though they do not prevent ownership transfer.
Sources
- Restatement (Third) of Property — Servitudes (Easements)(2025-03-01)
- State Lien Priority Statutes Compilation(2025-03-01)
Common Mistakes to Avoid
Failing to discover existing easements during due diligence before purchasing property.
Consequence: Buyers inherit easement obligations that may limit development plans, reduce property value, or restrict use of portions of the land.
Correction: Conduct thorough title searches and survey reviews to identify all existing easements, and evaluate their impact on intended property use before closing.
Assuming deed restrictions no longer apply because they are old or seem outdated.
Consequence: Restrictive covenants can be enforced decades after creation, and violations may result in injunctions requiring removal of non-conforming improvements.
Correction: Review all deed restrictions regardless of age. Consult an attorney if restrictions appear obsolete, as formal legal action may be needed to remove or modify them.
Test Your Knowledge
1.Which type of easement benefits a particular parcel of land rather than a specific person?
2.Which type of lien takes priority over most other liens?
3.What are deed restrictions also commonly known as?