10. Real Estate Taxes and Other Liens

Question 1

AD VALOREM TAX

Answer 1

A tax levied according to value, generally used to refer to real estate tax. Also called the general tax.

Question 2

ASSESSMENT

Answer 2

The imposition of a tax, charge, or levy, usually according to established rates.

Question 3

ATTACHMENT

Answer 3

The act of taking a person’s property into legal custody by writ or other judicial order to hold it available for application to that per son’s debt to a creditor.

Question 4

ENCUMBRANCE

Answer 4

Anything—such as a mortgage, tax, or judgment lien, an easement, a restriction on the use of the land or an outstanding dower right—that may diminish the value or use and enjoyment of a property.

Question 5

EQUALIZATION FACTOR

Answer 5

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.

Question 6

EQUITABLE LIEN

Answer 6

A lien that arises out of common law. It is created by a court based on fairness. See also statutory lien.

Question 7

ESTATE TAXES

Answer 7

Federal taxes on a decedent’s real and personal property.

Question 8

GENERAL LIEN

Answer 8

The right of a creditor to have all of a debtor’s property—both real and personal—sold to satisfy a debt.

Question 9

GENERAL REAL ESTATE TAX

Answer 9

A tax which is made up of the taxes levied on the real estate by government agencies and municipalities.

Question 10

INHERITANCE TAXES

Answer 10

State-imposed taxes on a decedent’s real and personal property.

Question 11

INVOLUNTARY LIEN

Answer 11

A lien placed on property without the consent of the property owner.

Question 12

JUDGMENT

Answer 12

The formal decision of a court upon the respective rights and claims of the parties to an action or suit. After a judgment has been entered and recorded with the county recorder, it usually becomes a general lien on the property of the defendant.

Question 13

LIEN

Answer 13

A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale.

Question 14

LIS PENDENS

Answer 14

A recorded legal document giving constructive notice that an action affecting a particular property has been filed in either a state or a federal court.

Question 15

MECHANIC’S LIEN

Answer 15

A statutory lien created in favor of contractors, laborers, and materialmen who have performed work or furnished materials in the erection or repair of a building.

Question 16

MILL

Answer 16

One-tenth of one cent. Some states use a mill rate to compute real estate taxes; for example, a rate of 52 mills would be $0.052 tax for each dollar of assessed valuation of a property.

Question 17

MORTGAGE LIEN

Answer 17

A lien or charge on the property of a mortgagor that secures the underlying debt obligations.

Question 18

REDEMPTION

Answer 18

The right of a defaulted property owner to recover his or her property by curing the default.

Question 19

SPECIAL ASSESSMENT

Answer 19

A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement like a street or sewer.

Question 20

SPECIFIC LIEN

Answer 20

A lien affecting or attaching only to a certain, specific parcel of land or piece of property.

Question 21

STATUTORY LIEN

Answer 21

A lien imposed on property by statute—a tax lien, for example—in contrast to an equitable lien, which arises out of common law.

Question 22

SUBORDINATION AGREEMENT

Answer 22

A written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances.

Question 23

TAX LIEN

Answer 23

A charge against property, created by operation of law. Tax liens and assessments take priority over all other liens.

Question 24

TAX SALE

Answer 24

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

Question 25

VENDOR’S LIEN

Answer 25

A lien that belongs to a vendor for the unpaid purchase price of land, where the vendor has not taken any other lien or security beyond the personal obligation of the purchaser.

Question 26

VOLUNTARY LIEN

Answer 26

A lien placed on property with the knowledge and consent of the property owner.