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Real Estate Principles & Practices Prep Updated for 20th Edition > Unit 15 Real Estate Taxes and Liens > Flashcards

Unit 15 Real Estate Taxes and Liens Flashcards

1
Q

What is a lien?

A

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

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2
Q

What are the 4 types of liens (VISE)?

A

Voluntary Lien
Involuntary Lien
Statutory Lien
Equitable Lien

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3
Q

What is a voluntary lien?

A

An intentional lien created by the property owners actions.

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4
Q

What is an involuntary lien?

A

A lien created by law, and may be either statuary or equitable.

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5
Q

What is a statutory lien?

A

Created by statute.

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6
Q

What is an equitable lien?

A

Created by common law.

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7
Q

What are the two classifications of liens?

A

General and Specific.

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8
Q

What is a general lien?

A

Affect all property both real and personal.

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9
Q

What is a specific lien?

A

Based on security of specific property and affect only that particular property.

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10
Q

What does a lien do?

A

It runs with the lien?

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11
Q

What is the priority of liens?

A

The order in which claims against the property will be satisfied.

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12
Q

What are subordination agreements?

A

Written agreements between lien holders to change the priority of lien.

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13
Q

What are the two types of real estate taxes?

A

General Real Estate Tax (ad valorem)

Special Assessment/improvement Tax

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14
Q

What is a general real estate tax?

A

aka Ad Valorem, based on the value of the property being taxed and specific involuntary, and statutory liens.

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15
Q

Who is exempt from general taxes?

A

Cites, municipal organizations, state and federal governments, religious and charitable organizations, hospitals, and educational institutions.

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16
Q

What is an assessement?

A

The official valuation process for tax purposes.

17
Q

What is the equalization factor?

A

A tool to correct inequalities in assessments.

18
Q

What is the tax rate?

A

The tax rate is determined by the budget. Can be expressed as mill. 1/1000 of a dollar.

19
Q

How is a tax lien enforced?

A

The government sells the property to recover the taxes owed in a tax sale.

20
Q

What is equitable right of redemption?

A

The ability of the property owner to redeem his property by paying all that is owed prior to sale.

21
Q

What is a special assessment?

A

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.

22
Q

What is a mortgage lien?

A

aka Deed of trust. A voluntary lien on real estate given to a lender by a borrower as security for a real estate loan.

23
Q

What is a mechanics lien?

A

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

24
Q

What is required in a mechanics lien?

A

A contract.

A notice of lien in public record.

25
Q

What is a judgement?

A

A decree issued by a court.

26
Q

How does a judgement liens priority get established?

A

Date the judgement was entered.
Date the judgement was filed in the recorders office.
Date a writ of execution was issued.

27
Q

What is lis pendens?

A

A notice of possible future lien. Establishes priority.

28
Q

What is an attachment?

A

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.

29
Q

What is the estate tax?

A

Aka the inheritance tax. Encumbers a deceased persons real and personal property.

30
Q

What is a federal tax lien?

A

A lien filed by the IRS, to pay federal taxes. It is a general, involuntary, and statutory lien.

31
Q

How are tax rates determined for real estate?

A

Governments:
1-Create a budget.
2-Appropriate funds.
3-Develop a tax rate.

32
Q

What is a mil?

A

1/1000 of a dollar, or .0001.

33
Q

What is a mill per dollar ratio?

A

Dollars per hundred, or in dollars per thousand.

Tax rate of .032 or 3.2% or 32 mills. $32 per thousand.

34
Q

What is the statuary right of redemption?

A

The right of the homeowner to redeem the property after a tax sale.

35
Q

What is a vendor’s lien?

A

A lien belonging to the vendor for the unpaid purchase price of the property.

Real Estate Principles & Practices Prep Updated for 20th Edition (23 decks)

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