level 4: liens

Ad Valorem Tax Liens vs. IRS Tax Liens

(ad valorem taxes, which are based on a percentage of the property value, are levied by local tax authorities as property taxes. Since these are based on the property alone, a tax lien for ad valorem taxes (property taxes) is a specific lien.) (an IRS tax lien is based on unpaid income taxes for the individual, not just a specific property. Therefore, an IRS tax lien is a general lien. It affects any property an individual owns, including both real and personal property.)

How are Liens Terminated?

A debtor can terminate liens in one of the following ways: In the case of a general lien, which doesn't need to stay with that specific property, the seller may convince the lender to release the lien from the property and transfer it to some other acceptable property or collateral that the seller owns. If the proceeds from the sale will cover the debt, those funds will be withheld at settlement to pay the lender. A record of satisfaction of the lien will be filed in the public records. If the debt is larger than the proceeds of the sale, the seller has the option of settling the remaining debt by paying the balance at closing.

General vs. Specific liens

A general lien is a lien for which the real estate AND personal property may be sold to satisfy the debt. A specific lien is a lien that applies to a certain property only. Personal property is not affected.

Liens as Encumbrances

A lien is the claim made by a creditor against real or personal property pledged by a debtor as collateral. Because liens are creditors' claims that impact title, they are considered encumbrances.

Lis Pendens Notice

A lis pendens notice is a documented recording at the courthouse giving notice that a lawsuit is pending on a particular piece of property. This informs the public, including any interested parties, of the potential claim on the property.

Mechanic's Liens

A mechanic's lien is a type of involuntary, specific lien that a mechanic or materialman can impose upon a property if the property owner fails to pay for materials or work done on the property....A court can even force the homeowner to sell their home (as long as it's not a homestead) to satisfy the debt

Senior and Junior Liens

A senior lien, or superior lien, is a lien that comes first in the priority of liens. If there's a tax lien involved, it will be the senior lien. A junior lien, or inferior lien, is a lien that has another (senior) lien superseding it in priority.

Subordination Agreement

A subordination agreement is used to demote an existing lien in priority, so that a new lien can be in first position. The existing lien-holder has to agree to the demotion. Otherwise, everyone would be trying to cut the line,

Vendee's Liens

A vendee's lien is a document declaring a claim from a buyer that the seller has not transferred title to the buyer according to the agreement. When a seller fails to deliver title to a parcel of real estate when all terms of the contract for a sale have been satisfied by the buyer, a vendee's lien applies to the property to ensure the repayment of what the buyer paid. It is a specific, involuntary lien that protects buyers.

Vendor's Liens

A vendor's lien is a specific, involuntary lien that is used when a buyer doesn't take out a loan, but also doesn't pay the full purchase price of the property. Until the buyer pays the seller all the money they owe them, the seller has a vendor's lien on the property. Essentially, the seller is lending the buyer money to buy the property, and the property itself is being used as collateral.

Voluntary Liens

A voluntary lien is a lien that is created on purpose and with the agreement of the owner of the property in question. That means the property owner chose to initiate a lien that would not otherwise exist.

Execution Liens

A writ of execution can be issued by a court to force payment of monies owed from a judgment when a debtor does not pay. It gives court officers the right to confiscate and sell the debtor's property to satisfy the debt. The writ of execution is itself an involuntary lien, called an execution lien. It attaches to the property until it is sold.

Ad Valorem Taxes

Ad valorem taxes are general property taxes calculated according to the assessed value of real estate. The term ad valorem is Latin for "according to value." Many governmental bodies have the authority to levy and use ad valorem taxes...counties, cities, towns, Hospital districts, Districts containing parks etc..

Attachment Liens

An attachment lien is a general, involuntary lien and may attach to all of the owner's property except their homestead property. Plaintiffs in a lawsuit may seek a writ of attachment, in which the court seizes property until it reaches a judgment. A writ of attachment is also called an attachment lien. (So don't get too attached to the writ part!)

Bail Bond Liens

Bail bonds can be put up in the form of real estate in lieu of cash when a property owner is accused of a crime. This creates a bail bond lien: a specific, involuntary lien enforceable by a court officer or the sheriff if the accused property owner does not appear in court.

Exempt Property

Certain kinds of property are exempt from attachments, meaning an attachment lien can't be put on them and they can't be seized while awaiting a judgment. Exemptions are often limited to a certain value. They vary from state to state, but might include items such as: Tools used for a trade or business 🔨 Social security 🔒 Basic household appliances and furniture 🛁 School books 📚 Money owed to debtors for child support or injury 💰 Prescription health supports 💊 Basic wages 💵 Cemetery lots 🕯

Consequences of Tax Liens?

First, the taxing authority will send delinquency notices. If the taxes still go unpaid, they will put a tax lien on the property. The last resort is to foreclose on the property.

This kind of lien is always the senior lien. It's a general, involuntary lien. What is it?

IRS tax lien

Filing a Mechanic's Lien in Georgia

If a Notice of Commencement was filed by the property owner when the project started, and the person filing the lien did not contract directly with the property owner, a preliminary notice is required to be sent to the property owner. Otherwise, no notice is required. Liens must be filed within 90 days of completion of the project or delivery of materials. Mechanic's liens only attach to the property on which the work was done, and they last for a period of one year. If the debt is not paid within the year, the person who filed the lien must enforce it by filing a foreclosure suit, or the lien will expire.

When Judgment Liens Are Voluntary

If a person owes money to someone and allows a judgment to be entered against themselves via a written statement (instead of legal proceedings), this is a voluntary act. It's called a confession of judgment, and the resulting judgment lien would be considered a voluntary, general lien.

Municipal Utility Liens

If a property owner refuses to pay bills for municipal utilities, the municipality can obtain a municipal utility lien on the property. It is a specific, involuntary lien.

who can File a Mechanic's Lien in Georgia?

In Georgia, contractors, subcontractors, material suppliers, architects, laborers, machinists, engineers, manufacturers of machinery, and renters of equipment can all file mechanic's liens. Note that if you are required to be licensed for your trade and are not, you cannot file a lien.

This lien is an involuntary, specific lien applied by a materialman (materialperson?) to a property that owes them money for work done on the property.

It's a mechanic's lien!

what are some types of general liens?

Judgment liens (lis pendens) Estate and inheritance tax liens Deceased persons' debt IRS tax liens

Judgment Liens

Judgments are decrees given by courts at the conclusion of lawsuits. They may specify that one party to the lawsuit owes money to the other party. The winning party can claim a lien against the loser's real and personal property. That means judgment liens are general, involuntary liens.

How Liens Are Prioritized

Liens are commonly prioritized in the same order in which they were recorded. However, there is one major exception to the first in time is first in line rule. Some taxing entities take priority over any other kinds of liens in the public records. Ad valorem taxes and special assessments will always be paid first. That's known as being in "first place."

what are some Specific Liens?

Mortgage lien Mechanic's lien Vendor's lien Vendee's lien Bail bond lien Municipal utility lien

What does PITI stand for?

Principal, Interest, Taxes, Insurance

Special Assessments

Special assessments are taxes on properties that benefit from public improvement projects.. Special assessments can be voluntary or involuntary. A city can decide to improve the curbs in a neighborhood without the homeowners' consent. All affected homeowners must pay the special assessments or else have a tax lien placed on their property.

what are some types Tax Liens?

Special assessments: (also called improvement taxes) Ad valorem taxes :(based on the assessed value of the property)

what are some Estate and Inheritance Taxes?

The assets that a person leaves behind when they die are called an estate. An estate can include: *Property *Annuities *Life insurance Estates and inheritance are subject to an estate tax.

taxes only apply after what has been subtracted?

The deceased person's debt Funeral costs State death tax (which perfectly combines the only two guarantees in life, doesn't it?) Any charitable donations The remaining value of the estate is then taxed, creating an involuntary, general lien.

Involuntary Liens

The opposite of a voluntary lien is an involuntary lien, which is obtained through an action of law without the owner's consent. The property owner does not take any action to initiate the lien. Real estate tax liens and judgment liens are examples of involuntary liens

Tax Liens

There are several different kinds of tax liens. They are considered statutory liens because they are brought by a government entity. A tax lien is a lien that is imposed against property if the property owner becomes delinquent in the payment of taxes.

Federal Tax Liens

When a person does not pay Internal Revenue Service (IRS) taxes, such as the federal income tax, the IRS may obtain a federal tax lien. This is a general, involuntary lien that is held against all of the defaulting taxpayer's property.

what happens with a Deceased Person's Debt?

When a person passes away, any debts they have must be paid. This responsibility will fall to the executor of the person's will if they have one, or to the probate court if they don't. Debts are paid using liquid assets (like money in a bank account) if possible. If the deceased person's cash reserves won't cover the debt, real and personal property will be liquidated.

Mortgage Liens

a mortgage is a common type of voluntary lien. Typically, when a person buys a home, the home itself becomes collateral for the loan. The lender obtains a mortgage lien with the homebuyer's consent.....Mortgage liens are specific liens because they only apply to the property that is secured by the debt.

A federal judgment lien is a what kind of lien?

an involuntary, general lien.

A mechanic's lien is a what kind of lien?

an involuntary, specific lien.

Mortgagee

the organization or person who lends money (the lender)

Mortgagor

the person who takes a loan out from a bank (the borrower)

A mortgage is a what kind of lien?

voluntary, specific lien.