Unit 15: Real Estate Taxes and Other Liens

Question 1

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

Answer 1

A Lien

Question 2

This does not prevent a person from selling but might reduce value of the real estate

Answer 2

Lien

Question 3

What are the four ways to create a lien

Answer 3

1. Voluntary- intentional by taking out a mortgage
2. Involuntary- created by law -real estate taxes
3. Statutory- created by statute
4. Equitable- arises out of common law

Question 4

These taxes are specific, involuntary, statutory liens based on the value of the property

Answer 4

General real estate tax or “Ad Valorem Tax”- based on assessed value

Question 5

What types of properties are exempt from real estate taxation

Answer 5

cities, schools, parks, state and federal governments, churches, hospitals

Question 6

Enforcement of a tax lien takes place through this when real estate taxes remain unpaid two years after they are due

Answer 6

Tax sale

Question 7

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

Answer 7

Special assessment- betterment lien ( large scale improvements to streets, sidewalks, etc usually paid in equal installments over a period of years

Question 8

A voluntary lien given to a lender by a borrower as security for a real estate loan

Answer 8

mortgage lien

Question 9

Lien that gives security to persons or companies that perform labor or furnish material to improve real property

Answer 9

Mechanic’s lien

Question 10

The result of court action

Answer 10

Judgment lien - i.e. slip and fall; not enough insurance to cover the cost could result in one

Question 11

This type of lien results from a person’s failure to pay any portion of federal taxes such as income and withholding taxes

Answer 11

IRS tax lien

Question 12

In MA if you end up in a tax sale, you have this right for one year

Answer 12

Right of redemption- must pay taxes back plus interest

Question 13

This certificate indicates unpaid real estate taxes, water charges, betterments and other financial obligations levied by the town or city against the land

Answer 13

Municipal lien

Question 14

Proof that the septic system meets environmental standards

Answer 14

Title 5 betterment

Question 15

Owners have six months from the date of the tax sale to redeem the property, referred to this:

Answer 15

Statutory right of redemption