Unit 15: Real Estate Taxes and Other Liens Flashcards
A lien is a claim of a creditor or taxing authority against the ____ ________ of a debtor that is used as security to ensure _________ of the debt.
real property, repayment
A lien is not an ownership interest in real estate; it is an ___________ that transfers with it (____ with the ____) and lessens its value or impairs its use because it binds all successive owners until ____ and _______.
encumbrance, runs with the land, paid and cleared
If a debtor defaults in payment of a debt secured by property, the lienholder can force the ____ of the property, or _______ _____.
sale, acquire title
A lien may be _________, if it is created by action of the property owner, such as a mortgage.
voluntary
A lien may be ___________, if it is created without the property owner’s express permission.
involuntary
A lien may be _________, if it is permitted by statute, or _________, if it is granted by a court.
statutory, equitable
A _______ lien affects all of a debtor’s property, both real and personal; a ________ lien affects only identified property.
general, specific
Generally, the first lien to be recorded will take priority, but ____ ______ taxes and _______ ___________ usually take priority over all other liens.
real estate, special assessments
If a ______ lien is foreclosed, the property is still subject to prior liens.
junior
A _____________ agreement between lienholders can be used to change the order of lien priority.
subordination
Real estate taxes are ad valorem (_____________ to the estimated _____ of the real estate) taxes based on the value of the property taxed.
proportional, value
________ value is generally based on sales prices of comparable properties.
Assessed
An ____________ factor may be applied to correct inequalities in statewide tax assessments.
equalization
The ___ ____ for each taxing body is computed separately and may be expressed in “mills”.
tax rate
A mill is _/____ of a dollar, or $-.—. Mills may be shown as dollars per hundred or thousand dollars of ________ value.
1/1000, $0.001, assessed
The taxpayer usually has equitable _____ of __________ any time before a tax
right of redemption
The state may allow a _________ right of redemption following a ___ sale.
statutory, tax
If there are no bidders at the tax sale, the property may be forfeited to the _____.
state
Special assessments are levied and create a lien on property that benefits from ______ improvements, such as properties located in a _____ ___________ ________ (LID).
public, local improvement district
Special assessments are always ________ and _________, but may be voluntary or involuntary, and are usually paid in annual installments
specific and statutory, annual
A mortgage lien takes effect when the lender _______ the documents in the ______ where the property is located.
records, county
A _____ ________ lien on a property, when recorded, has priority over other liens (except for ___ liens); subsequent liens are ______ liens.
first mortgage, tax, junior
A mechanic’s lien is filed when an owner has not fully paid for work or the _______ __________ has been compensated but has not paid ______________ or _________ of materials.
general contractor, subcontractors, suppliers
A property owner who did not order improvements that are being made should _______, ____, and ______ a notice of nonresponsibility to be relieved from possible lien claims.
execute, post, and record
A judgment, a decree issued by a court, is a _______, involuntary, equitable lien on both real and personal property owned by a debtor and must be filed in every ______ in which the judgment debtor owns property.
general, county
While a lawsuit is pending, a ___ _______ can be filed to give notice of an action pending relating to the title or possession of real property and establish priority of the claimant, and a _____ of __________ can be sought from the court to authorize the sheriff to seize the property that the debtor may attempt to transfer. A _____ of _________ can be obtained from the court to enforce a judgment.
lis pendens, writ of attachment, writ of execution
______ and ___________ tax liens are general, _________, involuntary liens that encumber a deceased person’s real and personal property and are normally paid or cleared in a _______ proceeding.
Estate and inheritance, statutory, probate
A lien for municipal utilities is a ________, equitable, involuntary lien on the property of the owner who _______ to pay bills for municipal utility services.
specific, refuses
A ___________ _________ tax lien is a general, statutory, involuntary lien on real and personal property owned by the corporation.
corporation franchise
An IRS tax lien is a general, statutory, involuntary lien on all real and personal property held by a __________ taxpayer; it ____ ___ _________ previously recorded liens (which is also true of most state income tax liens).
delinquent, does not supersede
A vendor’s lien is a lien belonging to the seller for the ______ purchase price of the property, when the vendor has not taken any other lien or security. Vendors’ liens in real estate are uncommon and arise out of the use of _____ _________ to sell property.
unpaid, owner financing
T/F: An equitable lien arises out of common law.
True
T/F: An involuntary lien is created by law and is statutory (not equitable).
False. An involuntary lien is created by law and may be either statutory or equitable.
The ______ _____ levied on real estate in most states usually have priority over previously recorded liens and may be enforced by a _____-_______ sale.
annual taxes, court-ordered
Is it possible for the present owner of the house to reclaim it, even if there is a tax sale?
The answer is yes, depending on state law. If the owner’s state provides a statutory right of redemption following a tax sale, the present owner can reclaim the property by paying the amount collected at the tax sale plus interest and charges (including any taxes levied since the sale).
Can there be a property tax lien if it is not filed in the public record?
The answer is yes. A property tax lien can be effective and take priority over other liens, even if it is not made part of the public record.
Can property be sold for nonpayment of taxes, even if the current owner was not aware of the debt against the property?
The answer is yes. The property will be sold if the back taxes plus late fees are not paid.
The process involved in imposing property taxes is generally the same for most taxing districts. Put each step in its proper order.
- The funds needed are appropriated by ordinance;
- A budget is adopted by each taxing district;
- Tax bills are made using tax rate and assessed value;
- A tax levy is agreed to by vote of governing body;
- Tax bills and due dates are delivered to owners.
2, 1, 4, 3, 5
A prospective purchaser of property that has been recently constructed, altered, or repaired should be cautious about possible __________ mechanics’ liens against the property.
unrecorded
Is a judgment lien general or specific, and involuntary or voluntary?
general, involuntary
Is a vendor lien general or specific, and involuntary or voluntary?
specific, involuntary
Is a mechanic’s lien general or specific, and involuntary or voluntary?
specific, involuntary
Is a real estate lien general or specific, and involuntary or voluntary?
specific, involuntary
Is a mortgage lien general or specific, and involuntary or voluntary?
specific, voluntary
If improvements that were not ordered by the property owner have commenced, the property owner should execute a document called a notice of ________________ to be relieved from possible mechanic’s liens.
nonresponsibility
