Unit 10: Interest in Real Estate Flashcards
Identify the limitations on ownership rights that are imposed by government action.
The four government powers can be remembered as PETE: Police Power, Eminent Domain, Taxation, and Escheat.
List the nine lien rights that are enforceable against Texas homesteads.
1 - Taxes on the property
2 - Purchase money mortgages
3 - Mechanics’ and materialmen’s claims for the cost of improvements on the homestead property
4 - A homeowners association assessment lien, if certain filing requirements have been met
5 - An owelty lien, including a loan against the homestead to settle property claims in cases of divorce or death
6 - Refinance of a lien against a homestead, including a federal tax lien
7 - Home equity loans for any purpose
8 - Reverse mortgages, under which advances against a home’s equity are provided to a borrower who is 62 years old or older
9 - Conversion and refinance of a personal property lien secured by a manufactured home to a lien on real property, including the refinance of the purchase price of the home and the land and the cost of installing the home on the land
Describe the key components in each of the four phases of the annual tax levy process.
- Property valuation
- Protest period
- Tax rate adoption
- Tax collection
Explain the various types of liens other than taxes and how they are prioritized to satisfy unpaid debts.
The four ways of creating a lien may be remembered by the acronym VISE: Voluntary, Involuntary, Statutory, and Equitable.
The priority of a real estate tax lien prevails, even if a debt, lien, future interest, or other encumbrance existed before the attachment of the tax lien.
ad valorem tax
A tax levied according to value;
generally used to refer to real estate tax.
allodial system
A system of land ownership in which
land is held free and clear of any rent or service due to the
government; commonly contrasted with the feudal system.
In the United States, land is held under the allodial system.
appraisal review board
A group of people who hear
appeals concerning assessed valuations for tax purposes and
recommend or deny changes in values shown of record.
assessment roll
The public record of the assessed values
of all lands and buildings within a specific area.
attachment
- The act of taking a person’s property
into legal custody by writ or other judicial order to hold it
available for application to that person’s debt to a creditor. - A process of converting personal property to real estate.
defeasible fee estate
An estate in which the holder has
a fee simple title that may be divested on the occurrence
or nonoccurrence of a specified event. The two categories
of defeasible fee estates are fee simple determinable and fee
simple subject to a condition subsequent.
determinable fee estate
A fee simple estate in which
the property automatically reverts to the grantor upon the
occurrence of a specified event or condition.
easement
A right to use the land of another for a
specific purpose, such as for a right-of-way or utilities.
easement appurtenant
An easement that passes with
the land on conveyance.
easement by implication
An easement that arises when
the parties’ actions imply that they intend to create an
easement.
easement by necessity
An easement allowed by law as
necessary for the full enjoyment of a parcel of real estate; for
example, a right of ingress and egress over a grantor’s land.
easement by prescription
An easement acquired by
continuous, open, uninterrupted, exclusive, and adverse use
of the property for 10 years.
easement in gross
An easement that is not created for
the benefit of any land owned by the owner of the easement
but that attaches personally to the easement owner; for
example, a utility easement.
eminent domain
The right of a government or public
entity to acquire property for public use; the entity must
make a good-faith effort to acquire the real property
through direct negotiation and purchase from the owner.
encroachment
A building or some portion of it—a wall
or fence, for instance—that extends beyond the land of the
owner and illegally intrudes on some land of an adjoining
owner or a street or alley.
encumbrance
Any lien (such as a mortgage, tax, or
judgment lien) or an easement or a restriction on the use of
the land that may diminish the value of a property; a cloud
against clear, free title to property.
equitable lien
A lien arising out of common law. See
statutory lien.
equitable right of redemption
The right to redeem
a property before a foreclosure sale by paying the full debt
plus interest and accrued charges.
escheat
The reversion of property to the state in the
event the property is abandoned or the owner dies without
leaving a will and has no heirs to whom the property may
pass.
estate in land
The degree, quantity, nature, and extent
of interest that a person has in real property.
estate taxes
Federal taxes on a decedent’s real and
personal property.
federal judgment lien
Lien obtained by the United
States or an agency, department, commission, board, or
other U.S. entity that affects all real and personal property
of the judgment debtor.
fee simple
The maximum possible estate or
right of ownership of real property, continuing forever.
Sometimes called a fee or fee simple absolute.