click below
click below
Normal Size Small Size show me how
IL-Chap 10
Real Estate Taxes and Other Liens
Question | Answer |
---|---|
Lien | charge against a property to enforce payment of money |
Encumbrance | a charge or claim that attaches to real property and lessens its value or impairs its use. |
Voluntary Lien | created intentionally by property owner's action, such as a mortgage lien. |
Involuntary Lien | is a matter of choice and created by law. |
Statutory Lien | created by statute. Real estate tax lien is an involuntary statutory lien. |
Equitable Lien | created by court to ensure payment of a judgment as well as by agreement |
Four ways to create Lien | Voluntary-created intentionally by owners action-mortgage lien. Involuntary-created by law. Statutory-created by statute. Equitable-created by a court to ensure payment of debt. |
General Lien | affect both real and personal property of debtor. Includes judgments, taxes, decedent's debts & IRS. |
Priority of Liens | refers to order in which claims against the property are satisfied. First to record, first in right. Based on date they are recorded. |
Subordination Agreements | written agreements between lienholders to change priority of mortgage, judgment and other liens. |
General Real Estate Taxes (called Valorem taxes)-is superior to all other liens. | "according to value" Based on value of the property being taxed. Property taxes pay for a wide range of government services and programs. |
Homestead exemption | reduces the assessed value of a property subject to taxes. |
Assessment | Official valuation process to place value on home for tax purposes. Assessed value is based on sales prices of comparable properties. |
In IL real property is assessed 33-1/3% of fair market value | IL Revnue Act includes buildings, structures, improvements and any other permanent fixture attached to land. |
Equalization Factor | Is used to achieve uniformity. Applied to raise or lower assessment in a particular district or county. |
Proposed expense / Total assessed property values = Tax rate | Appropriation-way of taxing body authorizes the expenditure of funds and provides sources of the funding. Amount to be raised from general real estate tax is through a tax levy. |
Tax Levy-formal action taken to impose the tax. | General real estate taxes are payable in 2 installments in the year after they are levied. (i.e. paid in arrears) |
Tax Sale | Property owners fails to pay taxes. Court order allows only the sale of tax lien, not the property itself. |
Forfeiture Sale | No bids at tax sale. Property goes to the state. |
Scavenger sale | If taxes are not redeemed within 2 years, county may go through process to sell at tax sale to lowest bidder. |
Special Assessment | taxes levied on real estate to fund public improvements to the property. Are specific and statutory. Can be voluntary or involuntary. |
Special Service Areas=SSA | special taxing districts established in municipalities by ordinance at request of developer of new housing subdivision to pass on costs of streets, landscaping, etc to homeowners in SSA. |
Mortgage Lien-voluntary lien, first mortgage lien | Mechanics Lien-involuntary lien - give security to companies that perform labor or materials to improve property. |
Judgment - general, involuntary, equitable lien | is an order by court that settles and defines the rights and obligations of the parties to a lawsuit. |
Writ of attachment | court retains custody of the property until the suit concludes. |
Estate and Inheritance Liens = general, statutory, involuntary liens | Municipal Liens = specific, equitable, involuntary liens |
Corporation Franchise Tax Lien = general, statutory, involuntary lien | IRS Lien = failure to pay federal taxes. General, statutory, involuntary lien |