Part 6

Question 1

1. Taxation
2. Eminent domain
3. Police power
4. Escheat

Describe which four powers?

Answer 1

Four government controls on ownership

Question 2

______________ are levied against
real estate to support the operation and services of government at various levels.

• These can include
• State government
• County government
• Public school districts
• Municipal government

Answer 2

Taxes/Taxation

1 of 4 powers of government.

Question 3

______________ is used in property taxation because it is levied in proportion to the value of the property to which the tax applies.

Answer 3

Ad valorem tax

Question 4

An assessment against real property levied by a public authority to pay for public improvements, e.g., sidewalks, street improvements, sewers; also called betterment tax is called what?

Answer 4

Special assessment.

Question 5

Jillian is appraising Mark and Sarah’s soon-to-be purchased home so that they can finance through Action Mortgage. Mr. Fergison the seller, is still occupying the home and agreed to show Jillian around on the agreed upon inspection date. Mr. Fergison was more than eager to inform Jillian of everything he knew about the home from the oak flooring to the diameter and number of the trees in the established landscaping. He also told her about the new sidewalk which is scheduled to be constructed down the entire street a month after Mark and Sarah are to take possession of the home. He told her that the new buyers would have to pay for the cost of the concrete and the labor but that the results would definitely add value to the final appraisal. The city is currently bidding out estimates for the labor to reduce the costs. When appraising this dwelling Jillian must

Answer 5

take the pending special assessment into account as it could negatively impact the appraised value.

Local governments sometimes use special assessments to cover the costs of community improvements. The residents that benefit from the specific improvement, in this case, the houses gaining a sidewalk, are responsible for funding it. An appraiser must take into account all pending assessments because some of them may have an impact on the value.

Question 6

A property sells between the time a special assessment becomes of record and the time it is actually levied, it is referred to as a

Answer 6

pending special assessment.

Question 7

The right of government to take private property for public use upon the payment of just compensation is called what?

Answer 7

Eminent domain

Question 8

This is the acquisition process of eminent domain. Typically, the government entity will offer to purchase the property from the owner. If the owner refuses the offer, the property is _____________.

Answer 8

condemned/condemnation

Question 9

The inherent power of government to regulate property in order to protect public health, safety, and general welfare is called what?

Answer 9

Police power.

1 of 4 powers of government.

Question 10

Comprehensive plans are

Answer 10

are future oriented.

A form of police power used to control growth and development.

Question 11

Restrictions such as setbacks, density, and building height fall under what category of government control?

Answer 11

Zoning ordinances.

This is part of the government control identified within the broader area of police power.

Question 12

Open spaces, landscaped areas, fences, walls, berms, or any combination thereof used to physically separate or screen one use or property from another so as to visually shield or block noise, lights, or other nuisances; often associated with a change of land use or density. This defines what?

Answer 12

Buffer strip (or buffer zone)

This is part of the government control identified within the broader area of police power.

Question 13

An exception to the general zoning regulations; permits specific, usually small, parcels of land to be zoned for a use that is not permitted in the surrounding area. This defines what?

Answer 13

Spot zoning.

This is part of the government control identified within the broader area of police power.

Question 14

A legally authorized modification in the use of property at a particular location that does not conform to the regulated use set forth in the zoning ordinance for the surrounding area; not an exception or change in the legally applicable zoning. This defines what?

Answer 14

Zoning variance.

This is part of the government control identified within the broader area of police power.

Question 15

• Building type
• Building height
• Building style/appearance
• Natural resources protection
• Permitted uses
• Setbacks
• Lot size
• Density

These are property features that can be regulated by what?

Answer 15

Zoning ordinances

This is part of the government control identified within the broader area of police power.

Question 16

The right of government that gives the state titular ownership of a property when its owner dies without a will or any ascertainable heirs. This defines what?

Answer 16

Escheat.

This is part of the government control identified within the broader area of police power. The intent of escheat is to prevent real property from being abandoned with no owner in title.

Question 17

The condition of dying without leaving a valid will. This defines what?

Answer 17

Intestate.

This is part of the government control identified within the broader area of police power.

Question 18

One who dies leaving a valid will; the condition of dying with a valid will.

Answer 18

Testate.

This is part of the government control identified within the broader area of police power.

Question 19

A charge against property in which the property is the security for payment of the debt. This define what?

Answer 19

A lien.

Question 20

This type of lien is considered a specific lien. This type of lien can be placed on a parcel of real estate for delinquent property taxes or for the nonpayment of special assessments.

Answer 20

Government liens.

1 of 6 types of lien encumbrances that can limit ownership in real property

Question 21

This type of lien is considered a specific liens. They can arise when someone provides labor, skill, equipment, or materials while improving, repairing, or maintaining the property and then doesn’t get paid.

Answer 21

Mechanics’ liens

1 of 6 types of lien encumbrances that can limit ownership in real property

Question 22

This type of lien is considered a specific liens. This type of lien is created by a contract between the property owner and a lender. In this case, the owner (mortgagor) gives a lien against the property to the lender (mortgagee) to secure repayment of the loan.

Answer 22

Mortgage liens.

1 of 6 types of lien encumbrances that can limit ownership in real property

Question 23

This type of lien typically result from a lawsuit in which a monetary judgment is awarded. The party that won the suit and was awarded the judgment is a judgment creditor. The party who lost the lawsuit is a judgment debitor

Answer 23

Judgement liens.

1 of 6 types of lien encumbrances that can limit ownership in real property

Question 24

General liens is a type that binds all the assets of the individual debtor (that is, the debtor’s property) to the lien.

Specific liens is a type that is levied against or attaches to a specified piece of property.

These two categories describe what?

Answer 24

The two general categories. that liens fall into

Question 25

Liens, generally follow the priority order based on when they were created (that is, first come, first served). However, there might be more liens than available funds to pay them. Certain liens are considered high priority and must be paid first. What is the lien priority in most cases?

Answer 25

1. Property taxes
2. Special assessments
3. Mortgage liens
4. Second mortgage, such as an equity loan

Question 26

These type of lien-encumbrances are considered second mortgages and would come after a first mortgage on the priority list for repayment.

Answer 26

Equity loans

1 of 6 types of lien encumbrances that can limit ownership in real property

Question 27

An ______________ is a lien that allows a creditor with an interest in an otherwise unsecured property to prevent the debtor from conveying title while the dispute is being decided in court. In this case, the creditor files a writ of attachment allowing the court to retain custody of the property until the suit is concluded.

Answer 27

An attachment

1 of 6 types of lien encumbrances that can limit ownership in real property

Question 28

Last year, Ellen and Chris paid their property taxes late. On the day they went to the courthouse, they were informed that their bank, Eureka Savings and Loan, had already paid their taxes. The county collector suggested that they contact their bank. Why would the bank pay their taxes?

Answer 28

A government lien must be paid before a mortgage lien.

Question 29

A judgment has been placed against Mark after he was found at fault for an accident resulting in severe damage to another car and the hospitalization of its driver. In this case, what type of lien is placed against Mark’s property?

Answer 29

A general lien because all assets of the debtor are affected in a judgment.

Question 30

Mike recently made plans to knock down his dilapidated one-car garage and build a new two-car with a large attic for storage in its place. He went to the city to get a building permit and was turned down because his garage was too close to the property line. When it was originally constructed approximately fifty years ago, there was not a setback in place. He was told he could add onto the garage, but if he knocked it down he would have to move it twenty feet into his yard. Mike’s garage is currently

Answer 30

legally nonconforming because it conformed to the zoning at one time.

Question 31

Bill and Brandy are cashing out on some of their home equity to cover the cost of sending their son to college. To maximize their borrowing potential, they hired Jeff to appraise their home. He informed them the appraised value of the property is $335,000. Luckily for them, this was more than enough to cover the cost of college tuition, but they were concerned because their assessed value is currently $375,000. The mill rate for their county is comparatively high. Which of the following best describes the cause for their concern?

Answer 31

The couple is probably paying too much ad valorem tax which is based on the assessed value and the mill rate.

Question 32

The Federal Government receives a portion of the real estate taxes paid by the property owner.

Answer 32

False.