Chapter 10 Real Estate Taxes and Liens One type of lien is the mechanic’s lien, commonly found in home construction, rehabilitation, and addition projects.

2 ©2013 Kaplan, Inc. 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

3 ©2013 Kaplan, Inc. 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

4 ©2013 Kaplan, Inc. 10 Real Estate Taxes and Liens Liens –General Affect all property, both real and personal –Specific Secured by specific property –Priority –Subordination

5 ©2013 Kaplan, Inc. In Georgia, a broker may place a lien on commercial property for unpaid commissions. 10 Real Estate Taxes and Liens

6 ©2013 Kaplan, Inc. 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)

7 ©2013 Kaplan, Inc. 10 Real Estate Taxes and Liens Special assessments Local Improvement district taxes

8 ©2013 Kaplan, Inc. 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

9 ©2013 Kaplan, Inc. 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