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CLI Prelicensing > Unit 15 > Flashcards

Unit 15 Flashcards

1
Q

Lien

A

a charge or claim against a person’s property made to enforce the payment of money

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2
Q

security

A

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

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3
Q

Mortgage lien

A

when the lender’s security is in the form of the real estate

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4
Q

Are all liens encumbrances?

A

yes

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5
Q

Are all encumbrances lien?

A

no

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6
Q

4 ways to create a lien

A
  1. Voluntary
  2. Involuntary
  3. Staturoty
  4. Equitable
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7
Q

Voluntary Lien

A

created intentionally by the property owner’s action

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8
Q

Involuntary Lien

A

not a matter of choice; created by law

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9
Q

Types of involuntary lien

A
  1. Statutory

2. Equitable

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10
Q

Statutory lien

A

created by statute, state law says it must be paid

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11
Q

Equitable lien

A

arises out of common law; should be paid but might be other ways to work it out

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12
Q

Tax lien

A

involuntary statutory lien; exists without any action by the property owner

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13
Q

General Liens

A

affect all the property, both real and personal, of a debtor

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14
Q

When does a lien attach to real property?

A

at the moment it is filed and recorded

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15
Q

When does a lien attach to personal property?

A

when personal property is seized

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16
Q

What do general liens include?

A

judgements, estate and inheritance taxes, decendent’s debts, corporate franchise taxes, IRS taxes

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17
Q

Specific Liens

A

secured by specific property and affect only that particular property

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18
Q

Specific liens on real estate

A

vendors’ liens, mechanics’ liens, mortgage liens, real estate tax liens, liens for special assessments and utilities

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19
Q

Vendor’s lien

A

lien belonging to the vendor (seller) for the unpaid purchase price of the property, when the vendor has not taken any other lien or security beyond the personal obligation of the purchaser

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20
Q

Effect of lien on title

A

title can still pass over to buyer with lien on title

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21
Q

Release of lien

A

title is cleared of lien by lienholder

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22
Q

Runs with the land

A

passes with title

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23
Q

Do liens run with the land?

A

yes

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24
Q

Priority of liens

A

the order which claims against a proeprty will be satisfied if the property is sold by the debtor

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25
Q

What is the general rule for priority of liens?

A

first to record, first in right (priority)

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26
Q

Junior lien

A

one that comes after a ealier lien

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27
Q

Subordination agreements

A

written agreements between lienholders ot change the priority of mortgage, judgement and other liens

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28
Q

How are liens different from other encumbrances?

A

they’re financial or monetary in nature and attach to the property becuase of a debt

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29
Q

How are foreclosed liens paid?

A

from the proceeds of the sale

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30
Q

Types of real estate taxes

A
  1. general real estate taxes

2. special assessements or improvement taxes

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31
Q

What takes priority over all liens no matter when they are recorded?

A

real estate taxes & special assessments

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32
Q

Ad Valorem Tax name

A

general real estate tax

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33
Q

Ad Valorem Tax

A

based on teh value of the property being taxed and are specific, involuntary, statutory liens

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34
Q

Properties excempt from general taxes

A

cities, municipal organizations, state and federal governments, religious and charitable organizations, hospitals, educational institutitions

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35
Q

what do you pay real estate taxes on?

A

assessed value

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36
Q

How do you calculate annual tax bill?

A

assessed vlue * tax rate

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37
Q

Assessment Equalization Factor

A

used when it is necessary to correct inequalities in statewide tax assessements to achieve uniformity

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38
Q

How to use equalization factor

A

[assessed value * (1+equalization factor%)] * Tax rate

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39
Q

How to get a tax rate

A
  1. make a budget by each taxing district
  2. Appropriation
  3. Tax Levy
  4. Tax Rate
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40
Q

Appropriation

A

a taxing body authorizes the expenditure of funds and provides for the sources of funding

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41
Q

How are tax rates expressed?

A
  1. $ per $100
  2. $ per $1000
  3. Mills
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42
Q

Mill rate

A

a way of expressing a tax rate in $ per $1000

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43
Q

Due dates for taxes are set how?

A

by statute

44
Q

Equitable right of redemption

A

the delinquent taxpayer may redeem the property any time before the tax sale

45
Q

How to exercise equitable right of redemption

A

by paying the delinquent taxes plus interest and charges

46
Q

What is government’s power over real estate owners?

A

right to impose taxes to pay for their functions

47
Q

Who has priority over previously recorded liens?

A

annual taxes levied on real estate

48
Q

What does ad valorem mean?

A

according to value

49
Q

Why are real estate property taxes favored sources of revenue for local governments?

A

real estate cannot be hidden and is relatively easy to value

50
Q

What do property taxes pay for?

A

states; counties; cities, towns, boroughs, and villages; school districts; drainage districts; hospital districts; water districts; sanitary districts; transporation districts; parks, forest preserves, and recreation districts

51
Q

Assessment

A

official real estate valuation process where real estate is valued for tax purposes by county or township assessors or appraisers

52
Q

What is assessment value based on?

A

sales price of comparable properties

53
Q

What does a budget cover?

A

the financial requirements of the taxing body for the coming fiscal year, including an estimate of all expenditures for the year

54
Q

Appropriation

A

a taxing body authorizes the expenditure of funds and provides for the sources of the funding; oftens involves adoption of an ordinance or passage of law for specific terms of the proposed taxation

55
Q

Tax levy

A

formal action taken to impose a tax, usually by a vote of the taxing district’s governing body

56
Q

What real estate taxes are enforceable

A

valid taxes meaning they are charged properly, used for legal purposes, applied equitably to all property

57
Q

How are Real Estate Taxes that have been delinquent for a statutory period collected?

A

Tax Sale

58
Q

Tax Sale

A

usually help according to a published notice after a court has rendered a judgement for overdue taxes, penalities and administrative costs and has ordered the property be sold

59
Q

Who is the certificate of sale given to in a tax sale?

A

highest bidder

60
Q

When is the certificate of sale given in a tax sale?

A

after the bidder pays the delinquent tax amount in cash

61
Q

who holds the public sale of a property?

A

county sheriff or other public official

62
Q

Does the person with a certificate of sale on a tax sale immediately receive the deed?

A

No

63
Q

Statutory right of redemption

A

the defaulted owner can redeem the property from a tax sale by paying teh amount collected at the tax sale + interest and charges

64
Q

Tax Deed (Sheriff’s Deed)

A

title conveyed to the certificate of sale holder when the property is not redeemed within the statutory period

65
Q

Special Assessment

A

a tax charged on teh real estate to fund public improvements to the property, and it creates a lien for the amount of the assessment on the property

66
Q

Who pays for the special assessment?

A

property owners

67
Q

How are special assessments paid for?

A

euqal annual installments over a period of years

68
Q

Can property owners prepay on special assessment installemnts?

A

yes

69
Q

Local Improvement District (LID)

A

a specific geographial area formed by a group of property owners working together to fund needed capital improvements

70
Q

LID Taxation

A

a financing method available for the desing and construction of public improvements

71
Q

Mortgage lien

A

a specific, voluntary lien on real estate given to a lender by a borrower as security for a real estate loan

72
Q

When does a mortgage lien become a lien on real property?

A

when the lender records the documents in the COUNTY where the property is located

73
Q

preferred lien

A

no other liens against the property (aside from real estate taxes) can take priority over the mortgage lien

74
Q

Mechanic’s lien

A

a specific, involuntary lien that gives security to persons or companies that perform labor or furnish material to improve real property

75
Q

Who are mechanic’s liens available to?

A

contractors, subcontractors, architects, equipment lessors, surveyors, laborers, other providors

76
Q

When is a mechanic’s lien filed?

A

when the owner has not fully paid for the work or when the general contractor has been compensated bu has not paid the subcontractors or suppliers of matierals

77
Q

What is required for a contractor to receive a payment from the owner’s construction loan?

A

lien waiver

78
Q

who is entitled to a mechanic’s lien?

A

person who did the work and has a contract with teh owner or the owner’s authorized representative

79
Q

What clears a property’s title of a lien?

A

release or satisfaction of lien

80
Q

How do mechanic’s liens establish priority?

A

date the construction began or material were first furnished; the date the work was completed; the date the individual subcontractor’s work was commenced or completed; the date the contract was signed or work was ordered; date a notice of the lien was recorded, filed, posted or served

81
Q

Notice of nonresponsibility

A

relieves property owner of possible mechanics’ liens from improvements that were not ordered by the property owner

82
Q

Judgement

A

a decree issued by a court

83
Q

money judgement

A

a decree establishes the amount a debtor owes and provides for money to be awarded

84
Q

What type of lien is a judgement?

A

involuntary equitable lien on both real and personal priorty owned by the debtor

85
Q

How is a judgement different from a mortgage

A

no specific parcel of real estate was given as security at the time the debt was created

86
Q

Where must the creditor file a judgement?

A

in any county to which a creditor wishes to extend the lien coverage

87
Q

writ of execution

A

directs the sheriff to seize and sell as much of the debtor’s property as is necessary to pay both teh debt and the expenses of the sale

88
Q

How does one enforce a judgement?

A

writ of execution

89
Q

When does a judgement become a lien?

A

when the creditor orders the sheriff to assess the property and the charge is actually made

90
Q

How is a judgement lien’s priority estblished?

A
  1. date the judgement was entered by the court
  2. date the judgement was filed in a recorder’s office
  3. date a writ of execution was issued
91
Q

Satisfaction of judgement

A

legal document for when real property is sold to satisfy a debt

92
Q

What clears the record of a judgement lien?

A

satisfaction of judgement/satisfaction piece

93
Q

Lis Pendens

A

recorded notice of a pending lawsuit that affects title to or possession of real estate

94
Q

is a lis pendens a lien?

A

no, but could become one

95
Q

What does a lis pendens do?

A

notifies prospective purchasers and lenders that there is a potential claim against a property and establishes priority of a later lien

96
Q

Writ of Attachment

A

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

97
Q

why would a creditor want a writ of attachment?

A

to prevent a debtor from conveying title to previously unsecured real estate while a court suit is being decided

98
Q

What do most attachments arise from?

A

an action for payment of an unsecured debt

99
Q

Who retains control of a property in an attachment

A

court until suit concludes

100
Q

estate taxes and inheritance taxes

A

general, statutory, involuntary liens that encumber a decreased person’s real and personal property; normally paid or cleared in probate court proceedings

101
Q

lien for municipal utilities

A

municipalities 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

102
Q

bail bond lien

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; specific, satutory, voluntary lien

103
Q

corporation franchise tax lien

A

levied by state governments on corporations as a condition of allowing them to do business in the state; general, statutory, involuntary lien on all real and personal property owned by the corporation

104
Q

IRS Tax lien

A

results from a person’s failture to pay any portion of federal taxes; general, satutory, involuntary lien on all real and personal property held by the delinquent taxpayer

105
Q

Priority of IRS Tax lien

A

date of filing or recording

CLI Prelicensing (23 decks)

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