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- LIENS:
- a legal hold or claim one person has upon another's property
- used for debt security
- LIENOR: the person owed
- LIENEE: the person who owes
- Types:
- MORTGAGE LIENS:
- used to collateralize a property for a loan
- TAX LIENS:
- AD VALOREM PROPERTY TAX LIENS:
- created when a person fails to pay PROPERTY TAX
- PROPERTY TAX based on property value is AD VALOREM TAX
- SPECIAL ASSESSMENT PROPERTY TAX LIENS:
- liens are place on properties in a neighborhood for something
like its new street lights
- when the street lights are paid for the liens are removed
- FEDERAL INCOME TAX LIENS:
- when the IRS isn't paid
- liens placed on both real and personal property
- MECHANIC'S LIENS:
- if a homeowner tries to stiff a contractor, the contractor can
file a lawsuit to place the lien
- NOTICE OF LIS PENDENS:
- the plaintiff (contractor) files this to during the lawsuit to
keep the lien from expiring
- JUDGMENT LIENS:
- when a defendant loses a civil case a JUDGMENT is awarded
- this becomes a JUDGMENT LIEN
- on both REAL and PERSONAL property
- upon failure to pay the court issues a WRIT OF EXECUTION
- this directs the SHERIFF to sell enough of the defendant's
property to pay the debt
- DEFICIENCY JUDGMENT LIENS:
- obtained by a MORTGAGEE (lender) when foreclosure isn't enough
- affects MORTGAGOR's (borrower's) REAL and PERSONAL property
- CATEGORIES OF LIENS:
- VOLUNTARY vs INVOLUNTARY
- VOLUNTARY: when the parties agree, like a MORTGAGE
- INVOLUNTARY: operation of law
- TAX LIEN, MECHANIC'S LIEN, JUDGMENT OR DEFICIENCY LIEN
- also called STATUTORY LIENS
- GENERAL vs SPECIFIC
- GENERAL LIEN:
- attaches to everything, REAL and PERSONAL the LIENEE owns
- FEDERAL INCOME TAX LIEN, JUDGMENT LIEN, DEFICIENCY JUDGMENT LIEN
- SPECIFIC:
- attaches only to a SPECIFIC piece of property
- PROPERTY TAX LIEN, MORTGAGE LIEN, MECHANIC'S LIEN
- PRIORITY OF LIENS:
- determined by RACE STATUTES (think of a foot race)
- lined up by DATE OF RECORDATION in the PUBLIC RECORDS
- two exceptions with special priority:
- AD VALOREM (property tax) LIENS
- SPECIAL ASSESSMENT TAX LIENS
- NOTE: FEDERAL INCOME TAX LIENS are NOT special
- they just line up by DATE OR RECORDATION like the others
- NOTE: MECHANIC'S LIEN DATE is the date work began or materials
were delivered, NOT DATE OF RECORDATION
- TRANSFER OF ENCUMBERED TITLE
- a LIEN is an ENCUMBRANCE
- when an ENCUMBERED TITLE is transferred either...
- the LIEN must be satisfied or...
- assumed by the new GRANTEE
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