Lien
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.
A lien represents an interest only in ownership....it does not constitute _______
Actual ownership of the property.
It is an encumbrance on the owner's title. An encumbrance is any charge or claim that attaches to real property and lessens its value or impairs its use. An encumbrance does not necessarily prevent the transfer or conveya
Voluntary Lien
created intentionally bu the property owner actions.
A lien placed on property with the knowledge and consent of the property owner.
Involuntary Lien
Is not a matter of choice.
it is created by law and may be either statutory or equitable.
Statutory Lien
A statutory lien is created by statute. A real estate tax lien, for example, is an involuntary, statutory lien. It is created by statute without any action by the property owner.
Equitable Lien
arises out of common law. A court-ordered judgment that requires a debtor to pay the balance on a delinquent charge account would be an involuntary, equitable lien on the debtor's real estate.
Two Type of Liens
1) Specific (Voluntary Mortgage, Involuntary Taxes, Vendor's Liens/Mechanic's liens).
2) General (Involuntary Taxes)
General Liens
The right of a creditor to have all of a debtor's property�both real and personal�sold to satisfy a debt.
Specific Liens
A lien affecting or attaching only to a certain, specific parcel of land or piece of property.
Vendor's Lien
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.
Effect of Liens on Title...existing liens
The existence of a lien does not necessarily prevent a property owner from transferring title to someone else. The lien might reduce the value of the real estate because few buyers will take on the risk of a property that has a lien on it. Because the lie
Priority of Liens refers to....
the order in which claims against the property will be satisfied. In general, the rule for priority of liens is first to record, first in right (priority). The priority of payment is from the date the liens are recorded in the public records of the county
Subordination Agreements
A written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances.
An equitable lien arises out of common law. (True or False)
True
An involuntary lien is created by law and is statutory (not equitable). True or False
False
The general real estate taxThe general real estate tax is an....
ad valorem tax. Ad valorem is Latin for "according to value." Ad valorem taxes are based on the value of the property being taxed and are specific, involuntary, statutory liens. They are charged by various government agencies and municipalities, including
equalization factor
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.
FOR EXAMPLE If a property is assessed
equitable right of redemption
The right of a defaulted property owner to recover the property prior to its sale by paying the appropriate fees and charges.
Mechanic Lien
A statutory lien created in favor of contractors, laborers, and material men who have performed work or furnished materials in the erection or repair of a building.
Judgment
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.
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Lis Pendens
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.