Level 5: Liens

Question 1

Encumbrances: Liens

Answer 1

the claim made by a creditor against real or personal property pledged by a debtor as collateral that impact title

Question 2

Voluntary Liens

Answer 2

a lien that is created on purpose and with the agreement of the owner of the property in question, that means the property owner chose to initiate a lien that would not otherwise exist

Question 3

Involuntary Liens

Answer 3

obtained through an action of law without the owner’s consent, the property owner does not take any action to initiate the lien

Question 4

Voluntary Liens: Mortgages

Answer 4

a legal agreement between a creditor and borrower in which the creditor lends money with interest to the borrower for the purchase of property with the condition that the creditor takes ownership of the title if the borrower defaults in repayment of the loan

Question 5

General Liens

Answer 5

a lien for which the real estate AND personal property may be sold to satisfy the debt

Question 6

Specific Liens

Answer 6

a lien that applies to a certain property only. Personal property is not affected

Question 7

General Liens: Judgment Liens

Answer 7

decrees given by courts at the conclusion of lawsuits

Question 8

General Liens: Estate and Inheritance Tax Liens

Answer 8

issued by a court to force payment of monies owed from a judgment when a debtor does not pay (gives court officers the right to confiscate and sell the debtor’s property to satisfy the debt)

Question 9

General Liens: Deceased persons’ debt

Answer 9

responsibility will fall to the executor of the person’s will if they have one, or to the probate court if they don’t, debts are paid using liquid assets (like money in a bank account) if possible, if the deceased person’s cash reserves don’t cover the debt, real and personal property will be liquidated

Question 10

General Liens: IRS tax liens

Answer 10

a lien that is imposed against property if the property owner becomes delinquent in the payment of taxes

Question 11

General Liens: Attachment Liens

Answer 11

Plaintiffs in a lawsuit may seek a writ of attachment, in which the court seizes property until it reaches a judgment

Question 12

General Liens: Lis Pendens Notice

Answer 12

documented recording at the courthouse giving notice that a lawsuit is pending on a particular piece of property, this informs the public, including any interested parties, of the potential claim on the property

Question 13

Specific Liens: Mortgage lien

Answer 13

voluntary, specific liens because they only apply to the property that is secured by the debt

Question 14

Specific Liens: Mechanic’s lien

Answer 14

involuntary, specific lien that a mechanic or materialman can impose upon a property if the property owner fails to pay for materials or work done on the property

Question 15

Specific Liens: Vendor’s lien

Answer 15

involuntary, specific lien that is used when a buyer doesn’t take out a loan, but also doesn’t pay the full purchase price of the property, until the buyer pays the seller all the money they owe them, the seller has a vendor’s lien on the property

Question 16

Specific Liens: Vendee’s lien

Answer 16

involuntary, specific lien a document declaring a claim from a buyer that the seller has not transferred title to the buyer according to the agreement

Question 17

Specific Liens: Bail bond lien

Answer 17

voluntary, specific liens when a property owner is accused of a crime

Question 18

Specific Liens: Municipal utility lien

Answer 18

involuntary, specific lien when a property owner refuses to pay bills for municipal utilities

Question 19

Mortgagor

Answer 19

the person who takes a loan out from a bank (the borrower)

Question 20

Mortgagee

Answer 20

the organization or person who lends money (the lender)

Question 21

Comparing Liens Visual Aid

Question 22

Tax Liens: Special Assessments

Answer 22

taxes on properties that benefit from public improvement projects (government improves an area)

Question 23

Tax Liens: Ad Valorem Taxes

Answer 23

general property taxes calculated according to the assessed value of real estate

Question 24

Commercial Broker Liens

Answer 24

commercial broker has a written agreement with a client agreeing to a specific commission and the broker fulfills their obligations but the client doesn’t pay, the broker can put a lien on the client’s property to recoup the commission

Question 25

Domestic Support Liens

Answer 25

liens that are put on the property of people who owe child support

Question 26

Lien Priority

Answer 26

the order in which liens against a property will be settled (prioritized in the same order in which they were recorded) (however, taxing entities take priority over any other kinds of liens)

Question 27

Senior Liens

Answer 27

a lien that comes first in the priority of liens, if there’s a tax lien involved, it will be the senior lien

Question 28

Junior Liens

Answer 28

a lien that has another (senior) lien superseding it in priority

Question 29

Subordination Agreement

Answer 29

a contract that gives a mortgage recorded at a later date priority over a previously recorded mortgage

Question 30

Priority of Liens Flowchart Visual Aid