Identify the limitations on ownership rights that are imposed by government action.
The four government powers can be remembered as PETE: Police Power, Eminent Domain, Taxation, and Escheat.
List the nine lien rights that are enforceable against Texas homesteads.
1 - Taxes on the property
2 - Purchase money mortgages
3 - Mechanics’ and materialmen’s claims for the cost of improvements on the homestead property
4 - A homeowners association assessment lien, if certain filing requirements have been met
5 - An owelty lien, including a loan against the homestead to settle property claims in cases of divorce or death
6 - Refinance of a lien against a homestead, including a federal tax lien
7 - Home equity loans for any purpose
8 - Reverse mortgages, under which advances against a home’s equity are provided to a borrower who is 62 years old or older
9 - Conversion and refinance of a personal property lien secured by a manufactured home to a lien on real property, including the refinance of the purchase price of the home and the land and the cost of installing the home on the land
Describe the key components in each of the four phases of the annual tax levy process.
- Property valuation
- Protest period
- Tax rate adoption
- Tax collection
Explain the various types of liens other than taxes and how they are prioritized to satisfy unpaid debts.
The four ways of creating a lien may be remembered by the acronym VISE: Voluntary, Involuntary, Statutory, and Equitable.
The priority of a real estate tax lien prevails, even if a debt, lien, future interest, or other encumbrance existed before the attachment of the tax lien.
ad valorem tax
A tax levied according to value;
generally used to refer to real estate tax.
A system of land ownership in which
land is held free and clear of any rent or service due to the
government; commonly contrasted with the feudal system.
In the United States, land is held under the allodial system.
appraisal review board
A group of people who hear
appeals concerning assessed valuations for tax purposes and
recommend or deny changes in values shown of record.
The public record of the assessed values
of all lands and buildings within a specific area.
- 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 person’s debt to a creditor.
- A process of converting personal property to real estate.
defeasible fee estate
An estate in which the holder has
a fee simple title that may be divested on the occurrence
or nonoccurrence of a specified event. The two categories
of defeasible fee estates are fee simple determinable and fee
simple subject to a condition subsequent.
determinable fee estate
A fee simple estate in which
the property automatically reverts to the grantor upon the
occurrence of a specified event or condition.
A right to use the land of another for a
specific purpose, such as for a right-of-way or utilities.
An easement that passes with
the land on conveyance.
easement by implication
An easement that arises when
the parties’ actions imply that they intend to create an
easement by necessity
An easement allowed by law as
necessary for the full enjoyment of a parcel of real estate; for
example, a right of ingress and egress over a grantor’s land.
easement by prescription
An easement acquired by
continuous, open, uninterrupted, exclusive, and adverse use
of the property for 10 years.
easement in gross
An easement that is not created for
the benefit of any land owned by the owner of the easement
but that attaches personally to the easement owner; for
example, a utility easement.
The right of a government or public
entity to acquire property for public use; the entity must
make a good-faith effort to acquire the real property
through direct negotiation and purchase from the owner.
A building or some portion of it—a wall
or fence, for instance—that extends beyond the land of the
owner and illegally intrudes on some land of an adjoining
owner or a street or alley.
Any lien (such as a mortgage, tax, or
judgment lien) or an easement or a restriction on the use of
the land that may diminish the value of a property; a cloud
against clear, free title to property.
A lien arising out of common law. See
equitable right of redemption
The right to redeem
a property before a foreclosure sale by paying the full debt
plus interest and accrued charges.
The reversion of property to the state in the
event the property is abandoned or the owner dies without
leaving a will and has no heirs to whom the property may
estate in land
The degree, quantity, nature, and extent
of interest that a person has in real property.
Federal taxes on a decedent’s real and
federal judgment lien
Lien obtained by the United
States or an agency, department, commission, board, or
other U.S. entity that affects all real and personal property
of the judgment debtor.
The maximum possible estate or
right of ownership of real property, continuing forever.
Sometimes called a fee or fee simple absolute.
fee simple subject to a condition subsequent
estate conveyed “provided that” or “if ” it is used for a
specific purpose. If it is no longer used for that purpose, it
reverts to the original grantor or his heirs by their exercise
of the right of reentry.
A system of ownership usually associated
with precolonial England in which the king or other
sovereign was the source of all rights. The right to possess
real property was granted by the sovereign to an individual
as a life estate only. On the death of the individual, title
passed back to the sovereign, not to the decedent’s heirs.
An estate in land in which ownership
is for an indeterminate length of time, in contrast to a
A construction specialist who enters
into a formal construction contract with a landowner to
construct a real estate building or project. The general
contractor often contracts with several subcontractors
specializing in various aspects of the building process to
perform individual jobs.
The right of a creditor to have all of a
debtor’s property—both real and personal—sold to satisfy
A person who receives a conveyance of real
property from the grantor.
The person transferring title to or an interest in
real property to a grantee.
Water under the earth’s surface
below the saturation point and used by a property owner
through the rule of capture.
Land that is owned and occupied as the
family home. In Texas, homestead property is protected or
exempt from forced sale by creditors for payments of most
debts, with several exceptions.
State-imposed taxes on a decedent’s
real and personal property.
A lien that arises by the action of
another, such as a judgment lien.
IRS tax lien
The formal decision of a court on the
respective rights and claims of the parties to an action or
suit. After a judgment has been entered and recorded with
the county clerk, it usually becomes a general lien on the
property of the defendant.
The revocable permission for a temporary use of land—a
personal right that cannot be sold.
A right given by law to certain creditors to have
debts paid out of the property of a defaulting debtor,
usually by means of a court sale.
An interest in real or personal property that
is limited in duration to the lifetime of its owner or some
other designated person.
- A landowner’s claim to use water in
large navigable lakes and oceans that are adjacent to the
property. 2. The ownership rights to land bordering these
bodies of water up to the mean vegetation line.
A statutory lien created in favor of
contractors, laborers, materialmen, and others (including
architects, engineers, or surveyors) who have performed
work or furnished materials in the erection or repair of a
mortgage (deed of trust or purchase money) lien
A conditional transfer or pledge of real estate
as security for the payment of a debt. Also, the document
used to create a mortgage lien.
The government’s right to impose laws,
statutes, and ordinances, including zoning ordinances and
building codes, to protect the public health, safety, morals,
A concept of water ownership in
which the landowner’s right to use available water is based
on a government-administered permit system.
The order in which unpaid debts or obligations
will be satisfied if the property goes through a court sale.
The future interest in an estate that
takes effect after the termination of another estate, such as
a life estate; on the death of the life estate owner, ownership
will pass to a named third party.
The future interest in an estate
that takes effect after the termination of another estate,
such as a life estate; on the death of the life estate owner,
ownership reverts to the grantor or the heirs or devisees.
The right or privilege, acquired through
accepted usage or contract, to pass over a designated
portion of the property of another.
An owner’s rights in land that borders on
or includes a stream or river. These rights include access to
and use of the water for domestic purposes.
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
A lien affecting or attaching only to a
certain, specific parcel of land or piece of property.
A lien imposed on property by statute—a
tax lien, for example—in contrast to an equitable lien,
which arises out of common law.
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; available in Texas
for tax foreclosures and homeowners associations assessment
liens; not available for a deed-of-trust foreclosure.
A written agreement
between holders of liens on a property that changes the
priority of mortgage, judgment, and other liens under
surety bail bond lien
A pledge of real estate instead of cash
as security for bail.
A charge against property created by operation
of law. Tax liens and assessments take priority over all other
A court-ordered sale of real property to raise
money to cover delinquent taxes.
The process by which a government or
municipal quasi-public body raises monies to fund its
Uniform Commercial Code
A codification of
commercial law that attempts to make uniform throughout
the United States all laws relating to commercial
transactions. Security interests in personal property are
created by an instrument known as a security agreement.
To give notice of the security interest, a financing statement
must be recorded.
A buyer’s claim against a seller’s property
when the seller has not delivered title to the buyer, as in an
installment contract or contract for deed.
The equitable lien of the grantor upon the
land conveyed, in the amount of the unpaid purchase price.
A lien that arises because of actions
permitted by a person, such as when signing a deed of trust
A lien ordered by the Texas Workforce
Commission against all real and personal property of an
employer who owes back wages to an employee.