Unit 13: real estate taxes and other liens
Lien Correct Answer: 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.
Encumbrance Correct Answer: any charge or claim that attaches to real property and lessens its value or
imparts its use.
encumbrance vs. lien Correct Answer: encumbrance doesn't necessarily prevent the transfer or
conveyance of the property, but because an encumbrance is attached to the property, it transfer along
with it. Liens differ because they are financial or monetary in nature and attach to the property because
of debt.
Voluntary Lien Correct Answer: is created intentionally by the property owner's action, such as when
someone takes out a mortgage loan
involuntary lien Correct Answer: is not a matter of choice; it is created by law and may be either
statutory or equitable.
statutory lien Correct Answer: A lien imposed on property by statute—a tax lien, for example—in
contrast to an equitable lien, which arises out of common law.
tax lien Correct Answer: A charge against property, created by operation of law. Tax liens and
assessments take priority over all other liens.
equitable lien Correct Answer: just like statutory lien but example: A court-ordered judgment that
requires a debtor to pay the balance on a delinquent charge account, and which can be filed in the
county where the debtor owns property, would create an involuntary, equitable lien on the debtor's real
estate.
General lien Correct Answer: The right of a creditor to have all of a debtor's property—both real and
personal—sold to satisfy a debt. i.e. inheritance taxes, decedent's debts, corporate franchise taxes, and
Internal Revenue Service taxes
specific liens Correct Answer: are secured by specific property and affect only that particular property.
Specific liens on real estate include vendors' liens, mechanics' liens, mortgage liens, real estate tax liens,
and liens for special assessments and utilities.
vendor's lien Correct Answer: 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.
junior lien Correct Answer: An obligation, such as a second mortgage, that is subordinate in right or lien
priority to an existing lien on the same property.
Lien Correct Answer: 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.
Encumbrance Correct Answer: any charge or claim that attaches to real property and lessens its value or
imparts its use.
encumbrance vs. lien Correct Answer: encumbrance doesn't necessarily prevent the transfer or
conveyance of the property, but because an encumbrance is attached to the property, it transfer along
with it. Liens differ because they are financial or monetary in nature and attach to the property because
of debt.
Voluntary Lien Correct Answer: is created intentionally by the property owner's action, such as when
someone takes out a mortgage loan
involuntary lien Correct Answer: is not a matter of choice; it is created by law and may be either
statutory or equitable.
statutory lien Correct Answer: A lien imposed on property by statute—a tax lien, for example—in
contrast to an equitable lien, which arises out of common law.
tax lien Correct Answer: A charge against property, created by operation of law. Tax liens and
assessments take priority over all other liens.
equitable lien Correct Answer: just like statutory lien but example: A court-ordered judgment that
requires a debtor to pay the balance on a delinquent charge account, and which can be filed in the
county where the debtor owns property, would create an involuntary, equitable lien on the debtor's real
estate.
General lien Correct Answer: The right of a creditor to have all of a debtor's property—both real and
personal—sold to satisfy a debt. i.e. inheritance taxes, decedent's debts, corporate franchise taxes, and
Internal Revenue Service taxes
specific liens Correct Answer: are secured by specific property and affect only that particular property.
Specific liens on real estate include vendors' liens, mechanics' liens, mortgage liens, real estate tax liens,
and liens for special assessments and utilities.
vendor's lien Correct Answer: 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.
junior lien Correct Answer: An obligation, such as a second mortgage, that is subordinate in right or lien
priority to an existing lien on the same property.
