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Real Estate Taxes and Other Liens

Real Estate Taxes and Other Liens. What is a lien?. A lien is a charge or claim against a person’s property, made to enforce the payment of money. Mortgage Lien Mechanics Lien Court Judgment Tax Lien Etc. A lien is an encumbrance on the owner’s title.

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Real Estate Taxes and Other Liens

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  1. Real Estate Taxes and Other Liens

  2. What is a lien? • A lien is a charge or claim against a person’s property, made to enforce the payment of money. • Mortgage Lien • Mechanics Lien • Court Judgment • Tax Lien • Etc.

  3. A lien is an encumbrance on the owner’s 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?

  4. Effects of Liens on Title • Liens don’t prevent you from selling a property, but it is impossible from a practical standpoint because buyers can’t 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.

  5. 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.

  6. 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

  7. What happens if you don’t pay your property taxes? • In Alabama, you have an equitable right of redemption.

  8. Other Liens on Real Property • Mortgage Lien (Deed of Trust Liens) (specific, voluntary) • Mechanic’s 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.

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

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