Chapter 13 Real Estate Taxes and Other Liens

types of liens (VISE)

(1) voluntary lien: created intentionally by the property owners actions, such as when someone takes out a mortgage loan. (2) involuntary lien: not a matter of choice; it is created by law and may be either statutory or equitable. (3) statutory lien: created by statute. A real estate tax lien for example, it exist without any action by the property owner. (4) equitable lien: arises out of common law. A court ordered judgement that requires debtor to pay a balance on a delinquent charge account, and which can be filled in the county where the debtor owns property

mill

-1/1000 of a dollar, or $0.001 -Example: a tax rate of 0.032, or 3.2% could be expressed as 32 mills, or $3.20 per $100 of assessed value or $32 per $1000 of assessed value.

IRS tax lien

-a persons failure to pay any portion of federal taxes, such as income and withholding taxes results in..... a general, statutory, involuntary lien on all real and personal property held by a delinquent taxpayer; it does not supersede previously recorded liens (which is also true of most state income tax liens).

tax sale

A court-ordered sale of real property to raise money to cover delinquent taxes.

assessment equalization factor

A factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is in line with statewide tax assessments. The ad valorem tax would be based on this adjusted value. An equalization factor may be applied to raise or lower assessments in a particular district or county. -achieves uniformity

general real estate tax

Ad valorem (according to value) - based on the value of the property being taxed and are specific, involuntary statutory liens.

junior lien

An encumbrance, second in priority, to a previously recorded lien or to a lien to which the encumbrance has been subordinated.

statutory right of redemption

The right of a defaulted property owner to recover the property AFTER its sale by paying the appropriate fees and charges.

equitable right of redemption

The right of a defaulted property owner to recover the property BEFORE to its sale by paying the appropriate fees and charges.

mechanics lien

When a person contracts for labor, services, or materials to be furnished for the purpose of making improvements on real property. But does not immediately pay for the improvements.

subordination agreement

Written agreements between holders of liens on a property that changes the priority of mortgage, judgment, or other liens in certain circumstances. -the holder of a superior or prior lien agrees to permit a later lien holders interest to take precedence.

lien

a charge or claim against a persons property made to enforce the payment of money. -form of security in a form of collateral -all liens awe encumbrances, but not all encumbrances are liens. -attached to property because of debt.

judgement

a general, involuntary, equitable lien on both real and personal property owned by the debtor. -NOT the same as a mortgage because no specific parcel of real estate was given security at the time the debt was created.

lien for municipal utilities

a specific, equitable, involuntary lien on the property of the owner who refuses to pay bills for municipal utility services.

corporation franchise tax lien

a tax calculated on the net profit of the corporation , which if not paid, becomes a lien against the corporations assets -allowing then to operate business in the state

general liens

affect all the property of the debtor, both real and personal, rather than a specific parcel of real property. Examples: judgements, personal property tax liens, and state and federal tax liens.

Properties exempt from general tax

cities, municipal organizations (schools, parks, and playgrounds), state and federal governments, religious and charitable org., hospitals, and educational institutions. -certain properties owners like senior citizens, veterans and persons with disabilities are granted reductions in the assed value of their homes

specific liens

is secured by a specific parcel of property and affects only that particular property. Examples: mortgage or deed of trust liens, real property taxes or special assessment liens, and mechanics lien.

vendors lien

lien belonging to vendor for the unpaid purchase price of the property, when the vendor has not taken any other lien or security, such as a mortgage, beyond the personal obligation of the purchaser **uncommon and arise out of the use of owner financing to sell proper

Effects of lien on title

once in place, a lien runs with the lans and will bind all successive owners until the lien is paid or settled and title is cleared by filling of a release of lien by the lien holder.

bail bond lien

real estate owner charged with crime post bail in real estate rather than cash and then there is a lien placed on the land until paid off.

federal estate taxes

state inheritance taxes (as well as the debts of decedents) are general, statutory, involuntary liens that encumber a deceased persons real and personal property.

special assessment tax

taxes imposed by a city, county, or state only on those specific parcels of real estate that will benefit from a proposed public improvement such as a street or a sewer

writ of attachment

to prevent a debtor from conveying title to such previously unsecured real estate while a court suit is being decided, a creditor may seek a writ of attachment, by with the court retains custody of the property until the suit concludes. - doesn't care who lives there, the owner pays - intercepts the proceeds

mortgage lien

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