Real Estate Taxes and Other Liens

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Real Estate Taxes and Other Liens
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What is a lien?

• A lien is a charge or claim against a persons
  property, made to enforce the payment of money.
• Mortgage Lien
• Mechanics Lien
• Court Judgment
• Tax Lien
• Etc.

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• A lien is an encumbrance on the owners title.
• What is the difference between a voluntary and an
  involuntary lien?
• What is the difference between a statutory lien
  and an equitable lien?
• What is the difference between a general lien and
  a specific lien?

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Effects of Liens on Title

• Liens dont prevent you from selling a property,
  but it is impossible from a practical standpoint
  because buyers cant get a loan on the property
  without the lien being cleared.
• Liens are paid off in their order of priority
  (order of recording).
• What is a subordination agreement?
• See the book for examples.

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Real Estate Tax Liens

• There are two types of taxes that municipalities
  can levy against property.
• Ad valorem and special assessments (improvements
  taxes)
• Ad valorem is Latin for according to value.
• Many properties are exempt from taxation.
• cities, churches, municipal organizations,
  hospitals, schools, etc.

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• Appraised value vs. assessed value
• Equalization is a process used to correct an over
  or under-assessment in a particular area.
• The process
• Adoption of a budget
• Appropriation
• Tax levy
• Tax rate (1 mill is 1/1000 of a dollar or .001
• See book for example

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• What happens if you dont pay your property
  taxes?
• In Alabama, you have an equitable right of
  redemption.

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Other Liens on Real Property

• Mortgage Lien (Deed of Trust Liens) (specific,
  voluntary)
• Mechanics Liens (specific, involuntary)
• Be very careful when purchasing new construction
  or homes that have been recently repaired or
  remodeled.
• Judgments
• To enforce a judgment a creditor must obtain a
  writ of execution from the court. Then the
  sheriff goes to work seizing and selling.

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• What is a lis pendens?
• What is a writ of attachment?
• IRS Tax Lien (general, statutory, involuntary)