Unit 13 - part 2

Question 1

Real Estate Tax Liens

Answer 1

There are two types of real estate taxes: general real estate taxes and special assessments or improvement taxes.

Both are levied against specific parcels of property and automatically become liens on those properties.

Right of state and local governments is to impose (levy) taxes to pay for their functions. The annual taxes levied on real estate in most states usually have priority over previously recorded liens and may be enforced by a court-ordered sale.

Question 2

Ad Valorem Tax

Answer 2

The general real estate tax is an ad valorem tax. Ad valoremis Latin for “according to value.”

Ad valorem taxes are based on the value of the property being taxed and are specific, involuntary, statutory liens.

Question 3

Special Assessment

Answer 3

• improvements
• tax charged on real estate to fund public improvement to the property
• creates a lean for the amount of assessment on the property
• specific, involuntary, equitable

Question 4

Equalization

Answer 4

When state assessment have inequalities, equalization factor is used.

Achieves uniformity in tax valuations.

Raises or lowers assessments in certain districts or counties.

Question 5

Statutory Right of Redemption

Answer 5

A certificate of sale is usually given to the highest bidder when that bidder pays the delinquent tax amount in cash. The certificate of sale gives the holder the right to take possession of the property.

Statutory Right of Redemption - owner has a specified time to pay off tax lien and get property back if the property is sold at a tax sale.

COLORADO DOESN NOT ALLOW RIGHT OF REDEMPTION

Question 6

other liens on real property

Answer 6

• mortgage lien
• mechanic’s lien
• judgment
• estate and inheritance tax liens
• lien for municipal utilities
• bail bond lien
• corporation franchise tax lien
• IRS tax lien

Question 7

mortgage lien

Answer 7

A mortgage lien is a voluntary lien on real estate given to a lender by a borrower as security for a real estate loan.

Lenders generally require a preferred lien, called a first mortgage lien. This means that no other liens against the property (aside from real estate taxes) can take priority over the mortgage lien.

Question 8

mechanic’s lien

Answer 8

A mechanic’s lien is a specific, involuntary lien that gives security to persons or companies that perform labor or furnish material to improve real property. A mechanic’s lien is available to contractors, subcontractors, architects, equipment lessors, surveyors, laborers, and other providers.

Question 9

judgment

Answer 9

A judgment is a decree (an official order issued by a legal authority) issued by a court.

These often result from damages caused to one person by another person through a wrongful act, breach of contract, or nonpayment of a debt.

A judgment is a general, involuntary, equitable lien on both real and personal property owned by the debtor.

Question 10

Lis Pendens

Answer 10

There is often a considerable delay between the time a lawsuit is filed and the time final judgment is rendered.

When any suit that affects title to or possession of real estate is filed, a special notice, known as a lis pendens is recorded. A lis pendens is not itself a lien, but rather notice of a possible future lien.

Property can’t be sold with a Lis Pendens.

Question 11

Writ of attachment

Answer 11

To prevent a debtor from conveying title to previously unsecured real estate while a court suit is being decided, a creditor may seek a writ of attachment.

A writ of attachment is a court order against the property of another person that directs the sheriff or other officer of the court to seize or take control of a property. By this writ, the court retains custody of the property until the suit concludes.

Question 12

Estate and Inheritance Tax Liens

Answer 12

Federal estate taxes and state inheritance taxes are general, statutory, involuntary liens that encumber a deceased person’s real and personal property.

These taxes and debts are normally paid or cleared in probate court proceedings.

Question 13

Lien for Municipal Utilities

Answer 13

Municipalities often have the right to impose a specific, equitable, involuntary lien on the property of an owner who refuses to pay bills for municipal utility services.

Question 14

Bail Bond Lien

Answer 14

A real estate owner who is charged with a crime that will result in a trial may post bail in the form of real estate rather than cash.

The execution and recording of such a bail bond creates a specific, statutory, voluntary lien against the owner’s real estate.

Question 15

Corporation Franchise Tax Lien

Answer 15

general, statutory, involuntary lien on all real and personal property owned by the corporation.

allows them to do business in the state.

Question 16

IRS Tax Lien

Answer 16

A federal tax lien, or (lRS), results from a person’s failure to pay any portion of federal taxes, such as income.

A federal tax lien is a general, statutory, involuntary lien on all real and personal property held by the delinquent taxpayer.

It’s priority is based on the date of filing or recording; it does not supersede previously recorded liens. The same rules apply to most state income tax liens.