Real Estate Taxes & Real Estate Taxes & LiensLiens

ZaharopoulosZaharopoulos

Phoenix College REA179 & REA180Phoenix College REA179 & REA180

EncumbrancesEncumbrances

EasementsEasements

Deed RestrictionsDeed Restrictions

EncroachmentsEncroachments

LiensLiens

LienLien- a charge or claim against - a charge or claim against a person’s propertya person’s property

SecuritySecurity -something of value -something of value that borrower promises to give that borrower promises to give lender in case of defaultlender in case of default

DefinitionsDefinitionsLiens / overview of Liens / overview of categories:categories:VoluntaryVoluntaryInvoluntaryInvoluntaryStatutoryStatutoryEquitableEquitableGeneral General SpecificSpecific

Categories Categories

Statutory Statutory – created by government – created by government statutestatute

EquitableEquitable – created by the courts – created by the courts

General LiensGeneral Liens

Judgment liensJudgment liens

Estate & inheritance tax liensEstate & inheritance tax liens

Debts of a decedentDebts of a decedent

Corporation franchise tax liensCorporation franchise tax liens

IRS liens (income tax)IRS liens (income tax)

Specific LiensSpecific Liens

Real estate tax liensReal estate tax liensSpecial assessment liensSpecial assessment liensMortgage liensMortgage liensTrust deed liensTrust deed liensMechanic’s liensMechanic’s liensUtility liensUtility liensBail bond liensBail bond liensVendor’s liensVendor’s liens

Voluntary / InvoluntaryVoluntary / Involuntary

Voluntary –specificVoluntary –specific Statutory – created Statutory – created

by gov’t statuteby gov’t statute MortgageMortgage - -

secures the realtysecures the realty AutoAuto - secures the - secures the

personaltypersonalty Bail bondBail bond

InvoluntaryInvoluntaryGeneralGeneral

Statutory Statutory ((created by created by govt)govt)

Estate taxes – attached Estate taxes – attached to the estateto the estate

Inheritance taxes – Inheritance taxes – attached to the attached to the beneficiariesbeneficiaries

Decedent’s debts- Decedent’s debts- attached to the estateattached to the estate

IRS income taxes –IRS income taxes –attached to the taxpayerattached to the taxpayer

Corporation Franchise TxCorporation Franchise Tx

Equitable Equitable ((created by created by courts)courts)

Judgments-attached to the Judgments-attached to the debtordebtor

Vendor’s lien –attached to Vendor’s lien –attached to vendeevendee

SpecificSpecific StatutoryStatutory

Real Estate taxes – Real Estate taxes – attached to parcelattached to parcel

Special assessments –Special assessments –attached to parcel– attached to parcel–

Mechanic’s liens-Mechanic’s liens-attached to realtyattached to realty

EquitableEquitable Judgments-attached to Judgments-attached to

the debtorthe debtor Utility billsUtility bills

Effect of Liens on TitleEffect of Liens on Title

A lien attaches to A lien attaches to real propertyreal property the the moment it is filedmoment it is filed

A lien does not attach to A lien does not attach to personal personal propertyproperty until that property is seized until that property is seized

Liens run with the landLiens run with the land

Liens Liens attach to the propertyattach to the property; not the ; not the property ownerproperty owner

Lien PriorityLien Priority

Real estate taxes and assessments Real estate taxes and assessments have top priorityhave top priority

All other liens in order of recordationAll other liens in order of recordation(with the exception of mechanic’s liens)(with the exception of mechanic’s liens)

Subordination AgreementsSubordination Agreements

Agreements between lenders which Agreements between lenders which can change lien prioritycan change lien priority

Taxing Bodies (some)Taxing Bodies (some)

StatesStates countiescounties Cities, towns, Cities, towns,

villagesvillages Water districtsWater districts School districts School districts

(public), including (public), including community community collegescolleges

Fire, police, public Fire, police, public hospitals, public hospitals, public librarieslibraries

Drainage districtsDrainage districts Sanitary districtsSanitary districts Parks, forest Parks, forest

preserves, preserves, recreation districtsrecreation districts

Determining Tax AmountDetermining Tax Amount

Ad valoremAd valoremAssessed Assessed valuevalue

Determining Tax AmountDetermining Tax Amount

Budget processBudget process Appropriation processAppropriation process AppraisalAppraisal AllocationAllocation Tax rate calculationTax rate calculation Equalization processEqualization process

Ways to express tax rateWays to express tax rate

Mil rate = .001Mil rate = .001

Dollars per HundredDollars per Hundred

Dollars per ThousandDollars per Thousand

Tax Rate = Total Budget Need / Total Assessed ValueTax Rate = Total Budget Need / Total Assessed Value

0.01 = 50,000,000 / 5,000,000,0000.01 = 50,000,000 / 5,000,000,000

Taxation District

Budget Needs

Assessed Value of All Property

Tax Rate

As a Mill Rate

In $ per Hundred

In $ per Thousand

MCCD 10,000,000

2,000,000,000

Phoenix 10,000,000

1,000,000,000

Maricopa 30,000,000

2,000,000,000

Totals

50,000,000

5,000,000,000

0.01 10 $1.00 $10.00

Unpaid Property TaxesUnpaid Property Taxes

Terminology:Terminology:

Redemption periodRedemption period Equitable right of redemptionEquitable right of redemption Tax Certificate SaleTax Certificate Sale Certificate of PurchaseCertificate of Purchase Quiet Title SuitQuiet Title Suit Treasurer’s DeedTreasurer’s Deed

Unpaid Property TaxesUnpaid Property Taxes

1) Actual Tax Sale1) Actual Tax Sale

2) Tax Certificate 2) Tax Certificate SaleSale

EqualizationEqualization

To correct inequalities in To correct inequalities in statewide tax assessmentsstatewide tax assessments

UniformityUniformity

Equalization factor is multiplied Equalization factor is multiplied to assessed value to assessed value beforebefore tax tax rate appliedrate applied

Can you appeal your assessed Can you appeal your assessed value?value?

Maricopa County Tax Assessor’s OfficeMaricopa County Tax Assessor’s Office State Board of EqualizationState Board of Equalization Superior CourtSuperior Court

www.maricopa.govwww.maricopa.gov

Liens, continuedLiens, continued

Special AssessmentsSpecial Assessments Mechanic’s LiensMechanic’s Liens JudgmentsJudgments Lis PendensLis Pendens Attachments – writ of Attachments – writ of

attachmentattachment