Unit F Law - Oregon Liens Flashcards
Homestead Exemption
Homeowners in Oregon State are offered some protection against the forced sale of their personal residence from judgment liens through the Oregon Homestead Exemption.
- strictly for general liens NOT specific, i.e It does not protect against foreclosures that arise out of real property taxes, mechanic’s lien, mortgage defaults, deeds of trust, or other specific liens.
To qualify for the Oregon Homestead Exemption, one:
a) Must be the residence of the debtor, their spouse/registered domestic partner, parent, or children
b) The property must not be larger than one city block for city properties
c) The property must not be larger than 160 acres for farm or rural properties
Example: Mr. Brown owns a home that he has never lived in, but his mom and sister do. This residence is covered by the homestead exemption as long as Mr. Brown does not establish another homestead elsewhere.
Example: Mr. Smith is separated from his wife and is living at his parents’ house while Mrs. Smith is living in their home. He hopes to reconcile with his wife. The house continues to be their homestead as long as Mr. or Mrs. Smith continue to live there.
Situations where the homestead exemption could be lost or not apply:
Situations where the exemption could be lost or not apply might be if they own other real property that is not his/her residence, or if they are absent from the property for over a year due to:
a) The sale of the property
b) Result of foreclosure
c) Leasing of the property to another party
d) Abandonment of the property
Homestead exemption amounts in Oregon
$40 k individual
$50 k married couple
Homestead and proceeds from the sale of the property
The exemption would apply to proceeds of a sale, so long as the proceeds were used to purchase another residence within the year following the sale. The exemption would be lost however if the debtor were to sell their home and reinvest the proceeds in anything else, such as in a foreign business.
- must notify judgments creditor of sale
- proceeds or gains above exemption will go to creditor
What does the homestead exemption apply to?
Applicability of the Exemption
The exemption applies to:
Single family homes Manufactured homes Condominiums Floating homes Land to which the above are attached A residential lease if the lease was prepaid
homestead example
Example: Mr. Jones caused an auto accident and injured Mrs. Carter. After Mr. Jones’ insurance company paid out $200,000, there was still a judgment lien against him from the case for $80,000.
Mr. Jones had a residence worth $245,000 with a deed of trust in the amount of $210,000, and since Mr. Jones did not have enough equity in his home above the exemption amount of $40,000, Mrs. Carter could not foreclose on his home. Should Mr. Jones’ equity position change in the future due to appreciation of the property, Mrs. Carter may be able to foreclosure if the equity becomes above the exemption limit.
General taxes (Property tax)
are levied on property to finance the services of government. Public services such as libraries, public schools, or fire and police protection are examples of the services that are supported by general taxes.
- major source for local gov vs state
- ad valorem
ad valorem
taxes which means that that they are taxed according to value
Real Property General Taxes
type of lien which affects almost all real property.
**If the tax is not paid, the lien for general taxes takes priority over all other liens. This is true even if the other liens were recorded prior to the tax lien.
Income taxes
are the major source of income for the government at both the federal level and within Oregon state
taxes imposed on property is based on two factors:
the assessed value of the property and the tax rate. The annual property tax is the value of the property as determined by the county tax assessor, multiplied by the tax rate.
property tax, 1 mill
is equal to $1 in property tax, which is levied per $1,000 of a property’s determined taxable value.
-Tax levy amount divided by taxable assessed value = tax rate $225,000 divided by $39,487,000 = .0056980 x 1000, or = $5.6980 per $1,000 of assessed value
property tax rate
for each taxing district is determined by dividing the district’s need for the amount of money needed to be raised from property tax by the total amount of assessed value of the properties in that district.
- placed on the tax roll in the form of a rate per $1,000 of assessed value
Assessment/Fair market value
- administered by local governments
- In Oregon, all property is subject to taxation, unless it is specifically exempt.
- Fair market value is the price a buyer will pay and a seller will accept for a property under reasonable and ordinary conditions.
Fair market value is also important in real estate for a number of other reasons:
A home is being priced for sale
A property is involved in a divorce settlement
The home is tied up in an estate
Eminent domain is being exercised by the government
A home is being re-financed
