Unit 15 Real Estate Taxes and Liens Flashcards
What is a lien?
A charge or a claim against a person’s property made to enforce the payment of money.
What are the 4 types of liens (VISE)?
Voluntary Lien
Involuntary Lien
Statutory Lien
Equitable Lien
What is a voluntary lien?
An intentional lien created by the property owners actions.
What is an involuntary lien?
A lien created by law, and may be either statuary or equitable.
What is a statutory lien?
Created by statute.
What is an equitable lien?
Created by common law.
What are the two classifications of liens?
General and Specific.
What is a general lien?
Affect all property both real and personal.
What is a specific lien?
Based on security of specific property and affect only that particular property.
What does a lien do?
It runs with the lien?
What is the priority of liens?
The order in which claims against the property will be satisfied.
What are subordination agreements?
Written agreements between lien holders to change the priority of lien.
What are the two types of real estate taxes?
General Real Estate Tax (ad valorem)
Special Assessment/improvement Tax
What is a general real estate tax?
aka Ad Valorem, based on the value of the property being taxed and specific involuntary, and statutory liens.
Who is exempt from general taxes?
Cites, municipal organizations, state and federal governments, religious and charitable organizations, hospitals, and educational institutions.
What is an assessement?
The official valuation process for tax purposes.
What is the equalization factor?
A tool to correct inequalities in assessments.
What is the tax rate?
The tax rate is determined by the budget. Can be expressed as mill. 1/1000 of a dollar.
How is a tax lien enforced?
The government sells the property to recover the taxes owed in a tax sale.
What is equitable right of redemption?
The ability of the property owner to redeem his property by paying all that is owed prior to sale.
What is a special assessment?
Taxes that are charged on real estate to fund public improvements to the property. Property owners in the improvement area are required to pay for the improvements.
What is a mortgage lien?
aka Deed of trust. A voluntary lien on real estate given to a lender by a borrower as security for a real estate loan.
What is a mechanics lien?
A specific involuntary lien that gives security to persons or companies that perform labor or furnish material to improve real property.
What is required in a mechanics lien?
A contract.
A notice of lien in public record.
What is a judgement?
A decree issued by a court.
How does a judgement liens priority get established?
Date the judgement was entered.
Date the judgement was filed in the recorders office.
Date a writ of execution was issued.
What is lis pendens?
A notice of possible future lien. Establishes priority.
What is an attachment?
A court order against the property of another person that directs the police to seize or take control of a property. Court remains custody of the property.
What is the estate tax?
Aka the inheritance tax. Encumbers a deceased persons real and personal property.
What is a federal tax lien?
A lien filed by the IRS, to pay federal taxes. It is a general, involuntary, and statutory lien.
How are tax rates determined for real estate?
Governments:
1-Create a budget.
2-Appropriate funds.
3-Develop a tax rate.
What is a mil?
1/1000 of a dollar, or .0001.
What is a mill per dollar ratio?
Dollars per hundred, or in dollars per thousand.
Tax rate of .032 or 3.2% or 32 mills. $32 per thousand.
What is the statuary right of redemption?
The right of the homeowner to redeem the property after a tax sale.
What is a vendor’s lien?
A lien belonging to the vendor for the unpaid purchase price of the property.
