Chapter 4- QUIZ
You have listed a house for $197,800. If the house sells for the listed price, the seller will make a profit of 15%. What price did the seller pay for the house? 167900 172000 168130 176500
172000 You take the $197,800 x 115% (15% on top of 100%) = $172,000
A lien that covers all real and personal property of the debtor within the county where recorded is a: mechanic's lien judgment lien writ of execution lis pendens
A judgment lien (a general lien) is a lien that covers all real and personal property of the debtor.
A lien is a monetary claim that if unpaid awards the lien holder the right of: foreclosure eviction ownership possession
A lien on a property gives the lienee (the lender) a right of foreclosure if the lien is not paid. Foreclosure is a specific legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.
An instrument, which requires recordation to be legally effective, is a(n): mechanic's lien agreement to sell real estate will
A mechanic's lien does not exist unless it is recorded. The mechanic's lien is one of the few documents that must be recorded to be legally effective. Deeds are almost always recorded to make it difficult for someone to contest that the transfer of ownership occurred and to make it easier to prove ownership. It's just that it is not legally required to record a deed. For a deed to be valid it must have the grantor's signature (the seller), consideration (payment), a description of the property, words of conveyance and the deed must be delivered within the lifespan of the grantor.
Which of the following is a voluntary lien? Mortgage Estate tax Special assessment Ad valorem tax
A mortgage is voluntary: taxes are assessed whether or not we want them.
The type of lien that is secured by specific property and only affects that property is known as: a statutory lien a voluntary lien an equitable lien a specific lien
A specific lien involves specific property- as opposed to voluntary liens, created by choice, equitable liens, created by agreement, or statutory liens, created by law.
A court orders real property sold, to satisfy an unpaid lien, is an action known as a(n): easement encumbrance attachment writ of execution
A writ of execution is a court ordered sale. This can be used in foreclosures by courts to order the sale of a property.
Property taxes are also referred to as: ad valorem lis pendens lien pendens ad valium
Ad valorem means according to value. The higher the value the higher the amount of tax.
All of the following statements are false EXCEPT: Judgments are specific liens Specific liens affect all property of the debtor All liens are encumbrances All encumbrances are liens
All liens are encumbrances Encumbrance is legal technical terminology for anything that affects or limits the title of a property, such as mortgages, leases, easements, liens, or restrictions. Those considered as potentially making the title defeasible are also encumbrances.An easement is a certain right to use the real property of another without possessing it. An easement is considered a property right in itself by common law and is still treated as a type of property in most jurisdictions.
A mechanic's lien is properly classified as a(n): equitable lien involuntary lien specific lien all of the above
All of the above Mechanics liens are levied against a specific parcel of land, not all the owners assets. It is involuntary because the owner has no choice. It is equitable because the lien holder does not have possession of the property the lien is against.
All of the following are examples of a specific lien, EXCEPT: Mortgage Mechanic's lien Judgment Property taxes
All of the rest apply to a specific property, while a judgment is against an individual and all of their property.
What kind of liens come from judgments (i.e. courts)? specific liens (against a specific property the lienee owns) fiduciary encumbrances general liens (against everything the lienee owns) limited liens
Judgments are general liens issued by a court and are against everything the debtor owns.
When a lien against a parcel of real estate may result from a lawsuit currently before the courts, one examining the public records would look for: constructive notice a lis pendens notice the chain of title a suit to quiet title
Lis pendens means "suit pending".
Mechanic's liens have a priority date of: the day the judgment was issued the day the work first began halfway through the work the day the judgment was recorded
Mechanic's liens have priority as of the date material was delivered or work began, rather than the date recorded. Mechanic's Lien: The right of a craftsman, laborer, supplier, architect or other person who has worked upon improvements or delivered materials to a particular parcel of real estate (either as an employee of the owner or as a sub-contractor to a general contractor) to place a lien on that real property for the value of the services and/or materials if not paid.
Which of the following is a lien that does not need to be recorded? Money judgments A tax deed Real estate taxes Voluntary lien
Real estate property tax liens automatically attach to the property as of January 1 of the current year. All other liens do not attach to the property automatically.
Bob Burnside has defaulted in payment of several debts, and a court has ordered his property sold to satisfy them. A report reveals several outstanding liens against the property. Which has first priority? The outstanding mortgage dated and recorded one year ago Current real estate taxes A mechanic's lien for work that was started two months before the date the mortgage was recorded A court judgment rendered and recorded last month
Real estate taxes always have first priority.
A claim or liability attached to a property is called: an encumbrance an easement a buyer's claim
Remember that an encumbrance is any claim against a property. Restrictions, liens, and buyer's claims (also known as a vendee's lien) are all FORMS of encumbrances
Mr. and Mrs. Davis, tenants, decide to have their apartment redecorated on June 15. Contractor Jones says he will do the job for $4,000 and informs Smith (the property owner), by registered letter, the job will be completed by June 13. Upon completion, Davis tells Jones to see Smith for payment: Smith is not liable since he did not contract with Jones Smith may be liable since he had notice and did nothing Smith is not liable since his wife signed for the registered letter Mr. and Mrs. Davis only are liable
Smith may be liable since he had notice and did nothing Smith must pay the contractor. He had express notice (the registered letter) that the work was being performed. His failure to respond indicated approval. He may, however, take legal action against Davis. Smith should have provided notification of his non-responsibility as soon as he was notified.
The tax on a given piece of real property is always determined by multiplying the mill levy by the: selling price assessed valuation of the property mortgage loan valuebook value
The assessed value of property is the County Assessor's determination of a percentage of the true and fair market value of the property.
Smith owned a home subject to a bank loan. After living there a year his cesspool caved in and he contracted to have a new one dug and connected. About that time, he lost his job and couldn't pay his bill. The contractor filed a mechanic's lien. Then the bank foreclosed and sold the property for the amount the borrower owed them. Which of the following is true? The bank secured title subject to the mechanic's lien The contractor loses out, the bank's lien was recorded first The mechanic's lien has first priority from the proceeds of the sale A holder of a mechanic's liens can never recover from a foreclosure
The contractor loses out, the bank's lien was recorded first The trust deed and note held by the bank has priority over the mechanic's lien because it was recorded first and there were no excess funds after foreclosing. In English - The bank loan was recorded first, so the bank gets paid first. Since the home sold for the value of the loan - after the bank got paid, there was nothing left for the contractor.
A lien's priority is determined by: The size of the lien determines priority A mechanic's lien always has first priority The date of the lien determines priority The date the lien is recorded determines priority except mechanic's liens
The date that the lien is recorded determines its priority, except for a mechanic's lien. The priority for a mechanic's lien is determined by the date the work commenced or the materials delivered.
Johnson helped dig a sewage ditch for property owner Smith on February 21 and 22. On March 9, a mortgage was recorded against the property. On March 11, still unpaid, Johnson filed a mechanic's lien of record. Which of the following is true? The bank's mortgage lien was recorded first and has priority over the mechanic's lien The mechanic's second lien status precludes a foreclosure action by Johnson The mechanic's lien has priority over the mortgage lien Mortgage liens always have priority over all other types of liens except for property tax liens
The mechanic's lien has priority over the mortgage lien How the priority date of Mechanic's liens are determined is different than any other lien. The date labor ensued or when supplies were delivered and not the date the lien was recorded is the priority date of a Mechanics lien. In this question - the labor was provided before the mortgage lien was filed of record - therefore the Mechanics lien would take precedence. . BTW - this is why at closings, good Buyer's agents always insist on seeing paid receipts for work the Sellers perform on the property. Nothing will ruin a new homeowner's day than to find out the Seller never paid for that new roof and under the rules of a Mechanics Lien, the roofer has slapped a lien on the property. Ultimately, the new homeowner is not responsible for the roof obligation, but they are now going to have to go to court to clear the lien.
The current value of a property is $255,000, and it is assessed at 35% of its current market value. What is the amount of the real estate tax due on the property if the tax rate is $3.50 per $100 of assessed value? 2039.9 92499 1115.63 3123.75
You take the $255K x 35%= $89,250 $89,250 x .035= $3,123.75
The type of lien which takes priority over all other liens, and has the first claim against a property is called: a property tax lien a judgment lien a mechanic's lien a mortgage lien
a property tax lien
If a debtor owns three pieces of real estate located in the same county, and a judgment is entered against him, it will be a lien against: the property first acquired the property last acquired all three properties homestead property only
all three properties
A charge levied by a local government to finance improvements such as repairing sidewalks in a neighborhood is: an ad valorem tax a zoning charge an equalizer an assessment
an assessment
A lien placed on the property without the consent of the owner is known as a(n): involuntary lien deed of trust lien voluntary lien mortgage lien
involuntary lien
Real estate property taxes are: general - involuntary liens general - voluntary liens specific - voluntary liens specific - involuntary liens
specific - involuntary liens If the property tax is unpaid, the tax can be satisfied only from the sale of the specific property upon which the tax is levied. The only voluntary liens are mortgages and deed of trust.
Smith Water Hole Company constructed a swimming pool. Upon completion, they filed a lien for non-payment. This was most likely a: general lien specific lien special lien voluntary lien
specific lien A mechanic's lien is levied against a specific piece of land. A mechanic's lien is a security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property. The lien exists for both real property and personal property. In the realm of real property, it is called by various names, including, generically, a construction lien.
This type of lien is created by law. It is known as: a statutory lien a voluntary lien an equitable lien a specific lien
statutory lien: Involuntary lien created by the operation of law. Statutory liens (such as a tax lien) do not require the consent of any party or a court order to be enforceable.