Section 1 - Chapter 10

Question 1

lien

Answer 1

charge or claim against property made to enforce the payment of money

Question 2

security

Answer 2

something of value that borrower promises to give lender if borrower fails to repay debt

Question 3

mechanic’s lien

Answer 3

recover payment for work performed

Question 4

encumbrance

Answer 4

any charge or claim that attaches to real property and lessens its value or impairs its use

Question 5

all liens are encumbrances but…

Answer 5

not all encumbrances are liens

Question 6

voluntary lien

Answer 6

created intentionally by property owner’s actions (like a mortgage)

Question 7

involuntary lien

Answer 7

created by law

Question 8

statutory lien

Answer 8

created by statute

Question 9

equitable lien

Answer 9

created by court to ensure payment of a judgement as well as by agreement

Question 10

general liens

Answer 10

affect all real and personal property

Question 11

specific lien

Answer 11

only affects a certain piece of property

Question 12

priority of liens

Answer 12

usually, “first to record, first in right” - except for real estate taxes and special assessments

Question 13

subordination agreement

Answer 13

agreements to change priority of liens

Question 14

general real estate tax

Answer 14

based on value of property (specific, involuntary, statutory liens)

Question 15

annual sale

Answer 15

court order that allows sale of tax lien, not the property itself

Question 16

forfeiture sale

Answer 16

if no bids at annual sale, then property forfeited to state - current owner or new owner can buy it back

Question 17

scavenger sale

Answer 17

if taxes haven’t been paid in 2 years, a new owner may buy it (new owner doesn’t have to pay tax lien, but must pay current taxes)

Question 18

special assesment

Answer 18

taxes levied on real estate to fund public improvements to the property (like streets, curbs, etc)

Question 19

mortgage lien (deed of trust)

Answer 19

voluntary lien given to lender by borrower for a real estate loan

Question 20

mechanics lien

Answer 20

specific involuntary lien that gives security to companies who perform labor to improve real property

Question 21

judgment

Answer 21

order issued by a court that settles and defines rights and obligations of the parties to a lawsuit (general, involuntary, equitable lien)

Question 22

estate and inheritance taxes

Answer 22

statutory, involuntary, general liens that encumber a deceased person’s real and personal property

Question 23

bail bond lien

Answer 23

specific, statutory, voluntary lien - bail is the property

Question 24

federal (irs) tax lien

Answer 24

general, statutory, involuntary lien on personal and real property for not paying taxes