Chapter 10Real Estate Taxes and Liens

One type of lien is the mechanic’s lien, commonly found in home construction, rehabilitation, and addition projects.

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10 Real Estate Taxes and Liens

• Learning objectives– Identify the various classifications of liens– Describe how real estate taxes are applied through

assessments, tax liens, and the use of equalization ratios

– Explain how nontax liens, such as mechanics’ liens, mortgage liens, and judgment liens are applied and enforced

– Distinguish the characteristics of voluntary, involuntary, statutory, and equitable liens

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10 Real Estate Taxes and Liens

• Creating liens (VISE)– Voluntary – created intentionally– Involuntary – created by law– Statutory – created by statute– Equitable – created by common law

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10 Real Estate Taxes and Liens

• Liens– General

• Affect all property, both real and personal

– Specific• Secured by specific property

– Priority – Subordination

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In Georgia, a broker may place a lien on commercial property for unpaid commissions.

10 Real Estate Taxes and Liens

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10 Real Estate Taxes and Liens

• Real estate tax liens– General (ad valorem)

• Exemptions (in Georgia, also insurance companies paying tax on income from premiums)

• Assessment (in Georgia, assessed value = 40% of fair market value)

• Equalization (in Georgia, the State Board of Education calculates the rate)

• Calculation and billing (tax rate, mill)

• Enforcement

– Tax sale (in Georgia, the sale is advertised in the local paper)

– Right of redemption (in Georgia, equitable right of redemption exists but not the statutory right of redemption)

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10 Real Estate Taxes and Liens

Special assessments

Local Improvement district taxes

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10 Real Estate Taxes and Liens

• Other liens on real property– Mortgage (deed of trust) liens– Mechanic’s liens

• Inferior to many types of liens• Notice of nonresponsibility

– Judgment liens• Lis pendens• Attachment

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10 Real Estate Taxes and Liens

• Other liens on real property– Estate and inheritance tax liens– Liens for municipal utilities– Bail bond lien– Corporation franchise lien– IRS tax lien