CHAPTER 5: LIENS

The current value of a property is $248,500. The property is assessed at 40% of its current value, with an equalization factor of 1.5 applied to the assessed value. If the tax rate is $4 per $100 of assessed value, what is the amount of tax due on the property? A. $5,640 B. $5,964 C. $51,600 D. $52,400

B. $5,964 248500 * 40% * 1.5 / 1000 = 1491. 149 * 4 = 5964

Which of these is a lien on real estate? A. An easement B. A recorded mortgage C. An encroachment D. A restrictive covenant

B. A recorded mortgage

A mechanics lien can be placed on: A. real and personal property. B. persona] property only. C. real property only. D. neither real and personal property.

C. real property only.

Taxes levied on a property owner to pay to install sidewalks or sewers are called: A. Ad valorem taxes B. General property taxes C. Special excise taxes D. Special assessments

D. Special assessments p86 Special assessments are taxes levied on real estate to fund public improvements to the property. Property owners living nearest to the improvements are required to pay for them because their properties benefit directly from the improvements.

A court orders real estate to be sold to satisfy an unpaid mortgage lien is an action known as a(n): A. encumbrance. B. attachment. C. seizure. D. foreclosure.

D. foreclosure.

When a company furnishes materials for the construction of a house and is subsequently not paid, it may file a(n): A. deficiency judgment. B. lis pendens. C. estoppel certificate. D. mechanic's lien.

D. mechanic's lien.

Normally, the priority of general liens is determined by: A. The order in which they are filed or recorded B. The order in which the cause of action arose C. The size of the claim D. The court

A. The order in which they are filed or recorded

What is the rate of assessment in most of Illinois? A. 15 percent of fair market value. B. 33.33% of fair market value. C. 33.33% of sales price. D. 15 percent of average assessed valuation.

B. 33.33% of fair market value p84 In all counties except Cook, real property is assessed at 33-1/3 percent of fair market value. In Cook County residential real property is assessed at 16-1/2 percent of fair market value, but the state requires that Cook County apply an equalizer factor of approximately 2.02 to bring the actual tax up to the State mandated 33-1/3 percent

A mechanic's lien would be properly classified as a(n): A. Equitable lien B. Involuntary lien C. General lien D. Unstatutory lien

B. Involuntary lien An involuntary lien, on the other hand, is not a matter of choice; it is created by law. It may be either statutory or equitable.

Which of the following is true of the Illinois homestead exemption? A. It exempts all of a homeowner's property from real estate taxes B. it reduces the assessed value of certain residential properties C. It does not apply to homeowners. over the age of 65 D. It shelters up to $15,000 of a homeowner's land buildings from creditors

B. it reduces the assessed value of certain residential properties

The current market value of a property is $335,000. For tax purposes, it is assessed at 40 percent of market value. The tax rate is $4 per $100 of assessed value. What is the amount of the tax due? A. $5,360 B. $5,625 C. $5,705 D. $5,740

A. $5,360

In Illinois, when does a judgment become a general lien on a defendant's real and personal property? A. Seven years after it is recorded in the Illinois Office of Title and Recordation B. At the time it is recorded in the county recorder's office C. Six months after judgment is entered in the county record D. As soon as all creditors and lien holders receive written notice by certified mail

B. At the time it is recorded in the county recorder's office

Which of the following liens does not need to be recorded to be valid? A. Mortgage lien B. Real estate tax lien C. Judgment lien D. lis pendens lien

B. Real estate tax lien A statutory lien is created by statute. A real estate tax lien, then, is an involuntary, statutory lien. It is created by statute without the property owner taking it on voluntarily.

Gordon has defaulted in the payment of several of his debts, and the court has ordered his property sold to satisfy them. A title search revealed several outstanding liens against the property. Which of the following liens has first priority? A. The outstanding first mortgage lien dated and recorded one year ago B. The current year's real estate tax lien C. The judgment lien rendered and recorded last month D. The mechanic's lien for work started two months before the mortgage was recorded

B. The current year's real estate tax lien p82 There are some notable exceptions to this rule, • Real estate taxes and special assessments generally take priority over all other liens, regardless of the order in which the liens are recorded. This means that outstanding real estate taxes and special assessments are paid from the proceeds of a court-ordered sale first. The remainder of the proceeds is used to pay other outstanding liens in the order of their priority. • Mechanics' liens take priority as provided by state law but never over tax and special assessment liens.

All of the following are specific liens EXCEPT: A. real estate taxes. B. judgments. C. mortgages. D. mechanic's liens.

B. judgments.

A mechanic's lien can be filed against an owner's real estate by a(n): A. real estate salesperson claiming part of the broker's commission. B. lumber company furnishing materials ordered by the property owner. C. real estate broker claiming a commission under a rejected offer. D. individual who obtained a judgment against the property owner.

B. lumber company furnishing materials ordered by the property owner.

Mechanic's liens are based on: A. federal law. B. state law. C. common law. D. case law.

B. state law. Under the Illinois Mechanic's Lien Act notice requirements, a contractor who makes improvements to an owner occupied, single-family residence must give the owner written notice within ten days after recording a lien against any property of the owner. If timely notice is not given and, as a result, the owner suffers damages before notice is given, the lien is extinguished to the extent of the damages. The mere recording of the lien claim is not considered damages. The amendment specifically applies to contractors and not to subcontractors.

Under which of the following types of liens can both the real property and the personal property of the debtor be sold to pay the debt? A. Real estate tax lien B. Mechanic's lien C. Judgment lien D. Assessment lien

C. Judgment lien p88 A judgment is a general, involuntary, equitable lien on both real and personal property owned by the debtor.

Mechanics liens must be filed within _________ months of job completion A. 4 B. 6 C. 1 D. 2

A. 4 An individual has a right to file a mechanic's lien notice with the county clerk up to 4 months from the date the work was completed.

Which of the following is a voluntary lien? A. Mortgage lien B. Estate tax lien C. Real estate tax lien D. Judgment lien

A. Mortgage lien

The assessed value is based on: A. Sales price of comparable properties B. Tax adjustment of the property C. Board of appeals evaluation D. Market value

A. Sales price of comparable properties p84 A property's assessed value generally is based on the sales prices of comparable properties, although practices may vary. Land values may be assessed separately from buildings or other improvements, and different valuation methods may be used for different types of property.

Debts that are incurred by an individual and become liens against all real property owned by that person are: A. voluntary liens. B. specific liens. C. fiduciary encumbrances. D. special assessments.

A. voluntary liens voluntary lien A lien that is created intentionally by the property owner, such as a mortgage

What would a judgment, a lis pendens notice and a foreclosure have in common? A. They are all voluntary liens. B. They are all involuntary liens. C. They are liens but would not create a cloud on the title. D. They are all general liens.

B. They are all involuntary liens. involuntary lien A lien that is placed on the property without the consent of the owner.

When a lien against a parcel of real estate may result from a lawsuit currently before the court, one examining the public records would look for: A. the chain of title. B. a lis pendens. C. a suit to quiet title. D. a judgment lien.

B. a lis pendens. There is often a considerable delay between the time a lawsuit is filed and the time final judgment is rendered. When any suit is filed that affects title to real estate, a special notice known as a lis pendens (Latin for "litigation pending") is recorded. A lis pendens is not itself a lien but rather notice of a possible future lien

George owns a principal place of residence and a duplex. He pays the property taxes on his home, but fails to pay the property taxes on the duplex. George may find that a lien has been placed against his: A. home. B. duplex C. home and duplex. D. home, duplex and personal property

B. duplex

When properly recorded in the county where the real estate of the defendant is located, a judgment becomes a(n): A. voluntary lien. B. involuntary lien. C. specific lien. D. juried lien.

B. involuntary lien. involuntary lien A lien that is placed on the property without the consent of the owner.

Specific liens include all of the following except for: A. real estate taxes. B. judgements. C. mechanics lien. D. special assessments.

B. judgements

All of the following are entitled to a lien on property in Illinois, EXCEPT: A. commercial real estate brokers. B. residential real estate brokers. C. subcontractors. D. general contractors.

B. residential real estate brokers.

If the market value of property is $584,500 and the assessed ratio is 40%, what are the monthly taxes if the tax rate is 30 mills? A. $5,887.25 B. $5942.50 C. $584.50 D. $587.72

C. $584.50 584500 * .4 = 233800 233800 * 30 / 1000 (30 mills) = 7014 (yearly tax) 7014 / 12 = 584.5

What is the difference between a general and a specific lien? A. A general lien cannot be enforced in court, while a specific lien can be enforced. B. A specific lien is held by one person, while a general lien is held by at least two persons. C. A general lien covers all of the debtor's property, while a specific lien covers only a certain piece of real property. D. A specific lien covers real estate, while a general lien covers personal property

C. A general lien covers all of the debtor's property, while a specific lien covers only a certain piece of real property. General liens affect all the property, both real and personal, of a debtor. This includes judgments, estate and inheritance taxes, decedent's debts, corporate franchise taxes, and Internal Revenue Service taxes. Specific liens are secured by specific property and affect only that particular property. o mechanics' liens, o mortgage liens, o real estate tax liens, o liens for special assessments and utilities. o personal property, as when a lien is placed on a car to secure payment of a car loan

At which of the following sales do interested parties try to purchase the tax lien to a property? A. Scavenger B. Forfeiture C. Annual D. General

C. Annual p85 Annual Tax Lien Sale (Solicitation of Investors to pay Delinquent Taxes) If the taxes on a property have not been paid by the due date of the second installment, the county collector can enforce the tax lien and request that the circuit court order a tax sale. The county has notification requirements that are prescribed by statute. These requirements include:

Which of the following is NOT a specific lien? A. ad valorem taxes B. mechanics' lien C. IRS lien D. special assessment

C. IRS lien A federal tax lien, or Internal Revenue Service (IRS) tax lien, results from a person's failure to pay any portion of federal taxes, such as income and withholding taxes. A federal tax lien is a general, statutory, involuntary lien on all real and personal property held by the delinquent taxpayer. Its priority, however, is based on the date of filing or recording; it does not supersede previously recorded liens.

After real estate taxes have been sold by the state or county to satisfy a delinquent tax lien, the defaulted owner usually has a right to: A. Have the sale canceled by paying the back taxes and penalties B. Pay his or her creditors directly and have their liens removed C. Redeem the property within the time specified by law D. Record a notice of non-responsibility for the unpaid taxes

C. Redeem the property within the time specified by law The owner may still redeem the property after forfeiture by paying delinquencies, publication costs, and interest. On the other hand, anyone who wants to purchase the property for the outstanding taxes may make application to the county. If this happens and the owner does not claim the property within 30 days of notification, the applicant will be issued a certificate of purchase once she pays the outstanding taxes, interest, and other fees.

In Illinois, a contractor's right to a lien expires how long after completion of the work, if no suit is filed within that time? A. 6 months B. 1 year C. 18 months D. 2 years

D. 2 years In Illinois, the contractor's lien right will expire two years after completion of that contractor's work, unless she files suit within that time to foreclose the lien. Suits to enforce mechanic's liens must be filed within two years after the last labor and/or materials were supplied.

Judgment liens are: A. Specific liens B. Voluntary liens C. Priority liens D. Involuntary liens

D. Involuntary liens An involuntary lien, on the other hand, is not a matter of choice; it is created by law. It may be either statutory or equitable.