Unit 10 - Real Estate Taxes and Other Liens Flashcards
Appropriation
The way a taxing body actually authorizes the expenditure of funds and provides for the sources of the funding.
Collateral
Something having value that is given to secure repayment of a debt.
Encumbrance
Anything (for example, a mortgage, tax, or judgment lien; an easement; a restriction on the use of the land) that may diminish the value or use and enjoyment of a property.
Equalization Factor
A factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is in line with statewide tax assessments. The ad valorem tax is based on this adjusted value.
Equitable Lien
A lien that arises out of common law.
Estate Taxes
Federal taxes on a decedent’s real and personal property.
General Lien
The right of a creditor to have all of a debtor’s property (both real and personal) sold to satisfy a debt.
General Real Estate Tax
A tax levied according to value, generally used to refer to real estate tax. Also called an ad valorem tax.
Inheritance Taxes
State-imposed taxes on a decedent’s real and personal property.
Involuntary Lien
A lien placed on property without the consent of the property owner.
Judgment
The formal decision of a court on the respective rights and claims of the parties to an action or suit. After a judgment has been entered and recorded with the county recorder, it usually becomes a general lien on the property of the defendant. Judgment liens are effective in Illinois for seven years and may be renewed for another seven-year term.
Lien
A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale.
Lien Waiver
Collected by the landowner from each contractor and subcontractor to create a continuing record that all lien claimants have released their lien rights.
Lis Pendens
A recorded legal document giving constructive notice that an action affecting a particular property has been filed in either a state or federal court.
Mechanic’s Lien
A statutory lien created in favor of contractors, laborers, and materialmen who have performed work or furnished materials in the erection or repair of a building.
In Illinois - if a landowner knows of work being done on the property and does not object or disclaim responsibility, a mechanic’s lien may be created.
Mortgage Lien
A lien or charge on the property of a mortgagor that secures the underlying debt obligations.
Special Assessment
A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement like a street or sewer.
Specific Lien
A lien affecting or attaching only to a certain, specific parcel of land or piece of property.
Statutory Lien
A lien imposed on property by statute (for example, a tax lien).
Subordination Agreement
A written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances.
Tax Deed
An instrument given to a purchaser after the expiration of the redemption rights. See also certificate of sale.
Tax Lien
A charge against property, created by operation of law. Tax liens and assessments take priority over all other liens.
Tax Sale
A court-ordered sale of real property to raise money to cover delinquent taxes.
Voluntary Lien
A lien placed on property with the knowledge and consent of the property owner.
Writ Of Attachment
To prevent a debtor from conveying title to such previously unsecured real estate while a court suit is being decided, a creditor may seek a writ of attachment, by which the court retains custody of the property until the suit concludes.
The amount of homeowner exemption in Illinois
$6k ($7K in Cook County)
Amount of senior citizen (65+) homestead exemption.
reduction by 5k
What does the home improvement exemption allow?
Allows any Illinois homeowner who has recently improved her home, to forestall an increase in the home’s overall assessed value for up to four years. This exemption is available up to an improvement value of $75,000.
Equation for calculating real estate taxes.
Assessed value × equalization factor – exemptions × tax rate = annual tax
How often is real estate reassessed in Illinois?
Any given parcel receives a full reassessment on a quadrennial (four-year) basis, as mandated by the state, though in Cook county this reassessment is triennial (every three years).
Budgets and tax rates equation
Proposed expense ÷ total assessed property values = tax rate
Which liens are always paid first?
tax liens and special assessment liens
ad valorem taxes
Also called general real estate taxes. Latin for ‘according to value’
