Real Estate Unit 15 Quiz & Flashcards

Questions and Answers

What is the difference between a general lien and a specific lien?

A specific lien is held by only one person, while a general lien must be held by two or more.

A specific lien is a lien against a certain parcel of real estate, while a general lien covers all of a debtor's property. (correct)

A general lien cannot be enforced in court, while a specific lien can.

A general lien is a lien against personal property, while a specific lien is a lien against real estate.

To be entitled to a mechanic's lien on real estate, the person who did the work or supplied the materials for which payment is claimed must have a contract with?

Any of the companies that provide work or materials for the property improvement.

The owner that is signed by the owner.

The property owner or the owner's authorized representative. (correct)

The county recorder that establishes the legal status of the individual intending to file the lien.

Which tax targets homeowners in particular?

Personal property tax

Franchise tax

Luxury tax

Real property tax (correct)

A lien can be created in which four ways?

Voluntary, Involuntary, Statutory, Equitable Signup and view all the answers

When a company furnishes materials for the construction of a house and is subsequently not paid, it may file?

A mechanic's lien. Signup and view all the answers

An assessment equalization factor is used to achieve?

Uniformity. Signup and view all the answers

A specific parcel of real estate has a market value of $160,000 and is assessed for tax purposes at 75% of market value. The tax rate for the county is 40 mills. The tax bill will be?

$4,800. Signup and view all the answers

What directs a sheriff to seize and sell as much of a debtor's property as necessary to pay for the debt and the expenses of the sale?

Writ of execution. Signup and view all the answers

To enforce a judgment, what must the creditor obtain?

A writ of execution from the court. Signup and view all the answers

The right of a defaulted taxpayer to recover property before its sale for unpaid taxes is?

The equitable right of redemption. Signup and view all the answers

All of these liens must be recorded to be effective EXCEPT?

Real estate tax lien. Signup and view all the answers

When properly recorded in the county where the real estate of the defendant is located, a judgment becomes?

An involuntary lien. Signup and view all the answers

The market value of an undeveloped parcel is $40,000. Its assessed value is 40% of market value, and properties in its county are subject to an equalization factor of 1.50. If the tax rate is $4 per $100, what is the amount of the tax owed on the property?

$960. Signup and view all the answers

Property tax liens?

Have priority over other liens. Signup and view all the answers

Is the contractor entitled to a lien?

No, because there was no express or implied contract between the homeowner and the contractor. Signup and view all the answers

Priority of liens refers to which of the following?

Order in which liens will be paid if property is sold to satisfy a debt. Signup and view all the answers

A lien is an encumbrance, which means that it attaches to property and?

Transfers along with the property. Signup and view all the answers

What is another name for a federal tax lien?

IRS tax lien. Signup and view all the answers

To give notice of a potential claim against property and to establish priority, a creditor may file?

A lis pendens. Signup and view all the answers

Which of these characteristics apply to a real estate tax lien?

Specific, involuntary lien. Signup and view all the answers

A mechanic's lien would be available to all of the following EXCEPT?

Real estate professionals. Signup and view all the answers

When is the first installment of a special assessment generally due?

The year after the assessment is approved. Signup and view all the answers

A lien is created in which of the following ways?

All of these. Signup and view all the answers

In February, a homeowner contracted with a general contractor to have a basement storage space converted to a sauna, but never paid for the work. The homeowner stopped making mortgage payments in June. The owner is two years delinquent in property taxes to the county. If all of these creditors obtain judgments against the owner in November, what will be the priority of their liens (first to last)?

County → contractor → mortgage company Signup and view all the answers

A lien against a parcel of real estate may result from a lawsuit currently before the court. Notice of a possible future judgment could be found by examining the public records for?

A lis pendens. Signup and view all the answers

Real estate taxes that are delinquent for the period specified in state law can be collected through?

Tax sale of the property. Signup and view all the answers

What type of lien should the buyer be MOST concerned about when looking at a new construction home?

Mechanic's lien. Signup and view all the answers

A mortgage becomes a lien on real property when?

The lender records the financing documents. Signup and view all the answers

Which of these would permit a law enforcement officer to seize and sell a debtor's property?

Writ of execution. Signup and view all the answers

A mechanic's lien is properly classified as?

A specific lien. Signup and view all the answers

If a property owner believes an error was made in determining the assessed property value, the owner can?

Present the objection to a local board of appeal or review. Signup and view all the answers

All of the following probably would be exempt from real estate taxes EXCEPT?

Apartment buildings. Signup and view all the answers

The priority of liens means?

First to record, first in right. Signup and view all the answers

What type of judgment establishes the amount a debtor owes and provides for money to be awarded?

Money judgment. Signup and view all the answers

A provider of construction materials may give constructive notice of his unpaid invoices by?

Obtaining a mechanic's lien against the subject property. Signup and view all the answers

Which of the following creates a lien on real estate?

Unpaid mortgage loan. Signup and view all the answers

A mortgage for the unpaid purchase price that belongs to the seller of real estate is?

A vendor's lien. Signup and view all the answers

A subordination agreement is a written agreement between lienholders to?

Change the priority of a mortgage. Signup and view all the answers

Which statement is TRUE of both a mortgage lien and a judgment lien?

It involves a debtor-creditor relationship. Signup and view all the answers

How might a jurisdiction raise or lower property assessments?

By using an equalization factor. Signup and view all the answers

A property owner's real estate tax bill is computed by applying the tax rate to?

The assessed valuation of the property. Signup and view all the answers

Study Notes

Liens

A specific lien is against a particular parcel, while a general lien encompasses all property owned by the debtor.
Mechanic's liens require a contract with the property owner or an authorized representative.
Liens can be categorized by their creation methods: voluntary, involuntary, statutory, and equitable.
A mechanic's lien allows suppliers who are unpaid for materials to seek compensation through legal claim.

Property Tax

Real property tax specifically targets homeowners, calculated based on market assessments.
An assessment equalization factor is aimed at achieving uniformity in tax assessments across properties.
Property tax liens hold priority over other liens in terms of payment when property is sold to satisfy debts.

Legal Processes

A writ of execution allows a sheriff to seize and sell a debtor's property to cover unpaid debts and sale expenses.
To enforce a judgment, a creditor must obtain a writ of execution from the court.
A lis pendens serves as a notice to the public regarding a potential claim on property due to ongoing litigation.

Property Assessments

The first installment of special assessments is typically due a year after the assessment is approved.
Property owners can challenge assessed values by presenting objections to local boards of appeal.

Exemptions & Obligations

Certain properties such as public hospitals and churches may be exempt from real estate taxes, while apartment buildings usually are not.
A money judgment specifies the exact amount owed by a debtor, establishing a legal basis for recovery.

Liens and Contracts

The equitable right of redemption allows taxpayers to reclaim property before tax sale.
A mechanic's lien is a specific lien that arises from unpaid construction work; buyers of new homes should be cautious of these liens.

Mortgage and Debt Relationships

Mortgages become liens when financing documents are recorded, establishing a legal claim on the property.
Subordination agreements can change the priority of mortgages among lienholders.

Calculating Taxes

Though the property market value may be $160,000, the taxable value is calculated based on a lower assessed percentage and multiplied by the mill rate.
Tax obligations arise from unpaid mortgage loans and can lead to involuntary liens on real estate.

Rights and Responsibilities

A provider can give constructive notice of unpaid invoices by obtaining a mechanic's lien, which serves as formal notice to potential buyers.
If a property owner disagrees with an assessment, they can challenge the decision rather than just pay the assessed amount.

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Test your knowledge on the differences between specific and general liens in real estate with these flashcards. This quiz will help you understand how various liens operate and their implications on property ownership.

Real Estate Unit 15 Flashcards