Property Ownership: LIENS Flashcards
LIEN
A legal hold or claim of a creditor or taxing authority against the real property of a debtor that is used as security to ensure repayment of the debt.
LIENOR
Person who has a right of lien upon the property of another
LIENEE
Person whose property is subject to a lien
MORTGAGE LIEN
A type of lien that is created when a property owner borrows money using the property as collateral.
- The property is used as security by the lender for the repayment of the loan
- The LIEN is the “instrument through which the lender’s interest in the property is secured.”
AD VALOREM TAX LIEN
A type of lien created when someone fails to pay AD VALOREM TAXES that are due on a property.
Normally referred to as “property taxes” which are assessed according to the value of the property.
SPECIAL ASSESSMENT TAX LIENS
A tax lien that is created when special assessment taxes go unpaid.
- SPECIAL ASSESSMENT TAXES are property taxes assessed on certain properties only, to pay fro improvements to those properties
- e.g. A special assessment tax to pay for putting street lights in a neighborhood at their request (Neighborhood Improvement District)
When SPECIAL ASSESSMENT TAXES are assessed, a TAX LIEN is placed on the property. When taxes are paid, the lien is removed.
FEDERAL INCOME TAX LIENS
A type of tax lien that arises when federal income taxes go unpaid.
These liens apply to ALL property, both real and personal, of the lienee
MECHANIC’S LIEN
A security interest in the title to property for the protection of those people who have supplied labor or materials in the construction or improvement of buildings.
If the labor and materials are NOT paid for, the person supplying them has the right to place a lien against the property for which the labor or materials were supplied
To Enforce a claim against a MECHANIC’S LIEN, a LIENOR must file a lawsuit in court:
- In PA, must file within 4 months after the work is completed
- Claimant must take steps to enforce the lien within 2 years of the date the claim is filed
- In order to give notice of his claim and to protect his lien from expiration while suit is pending, the LIENOR may file a notice of “lis pendens” in the public records
JUDGEMENT LIEN
When a person wins a lawsuit against another person in court to receive monetary damages, the person winning the suit is awarded a JUDGEMENT
When the JUDGMENT is recorded in the “public records”, it becomes a JUDGMENT LIEN against alll property both real AND personal, of the defendent (the loser of the lawsuit).
If the LIENEE does not voluntarily pay the amount of the damages awarded by the court, the court will issue a WRIT OF EXECUTION which directs the sheriff to sell enough of the LIENEE’S property to pay for the damages and the cost of the sale
DEFICIENCY JUDGMENT LIEN
Arises when the proceeds from the sale of a property in foreclosure are not sufficient to satisfy the outstanding balance on the debt.
The MORTGAGEE may obtain a DEFICIENCY JUDGMENT which serves as a lien on ALL MORTGAGOR’S ASSETS.
If the MORTAGOR fails to pay the remaining balance on the property, the lien is enforced like any other JUDGMENT LIEN, and the mortgagor’s property, both real and personal, can be sold to pay off the remaining balance.
DOMESTIC SUPPORT LIEN
A type of lien that may be filed on real estate owned by a person who has overdue child support obligations
They may be filed on real estate located in the judicial district in which the child support is due.
When a property encumbered by a DOMESTIC SUPPORT LIEN is sold, a statement must be obtained from the domestic relations section of court in the county where the property is located to verify the current status of the lien.
GENERAL LIEN
A lien that attaches to ALL property, both real and personal, owned by the LIENEE:
- FEDERAL INCOM TAX LIEN
- JUDGMENT LIEN
- DEFICIENCY JUDGMENT LIEN
SPECIFIC LIEN
A lien that attaches only to a specific property identified in the lien. Also referred to as “special liens”.
- AD VALOREM TAX LIEN
- SPECIAL ASSESSMENT TAX LIENS
- MORTGAGE LIENS
- MECHANIC’S LIENS
