chapter 15 exam Flashcards

chapter 15 exam Flashcards What is the annual real estate tax on a property valued at $135,000 and assessed for tax purposes at $47,250, with an equalization factor of 125%, when the tax rate is 25 mills?A) $945B) $1,181C) $1,418D) $1,477 The answer is $1,477.A special assessment is generally paidA) as an interest-only paymentB) in a lump-sum payment at the beginning of the projectC) whenever the property can afford itD) in equal annual installments over a period of years The answer is in equal annual installments over a period of years. The first installment is usually due during the year following the approval of the assessment and the first bill includes on year's interest.The current market value of a vacant lot is $35,000. For tax purposes, it is assessed at 40% of market value. The tax rate is $4 per $100 of assessed value. What is the amount of the tax due?A) $740B) $560C) $705D) $625 The answer is $560.A subordination agreement is a written agreement between lienholders toA) change the priority of a mortgageB) determine special assessmentsC) change the interest rate on a mortgageD) pay off all liens The answer is change the priority of a mortgage. Under a subordination agreement, the holder of a superior or prior lien agrees to permit a later lienholder's interest to take precedence.A lien on real estate made to secure payment for a specific municipal improvement project is which of the following?A) special assessment lienB) Ad valoremC) mechanics lienD) utility lien The answer is special assessment lien. Specific improvements are paid for by special assessments.Ad valorem taxes are based on the value of the property taxes and create liens that areA) statutory, involuntary, and generalB) specific, involuntary, and statutoryC) general, voluntary, and equitableD) specific, voluntary, and equitable The answer is specific, involuntary, and statutory. The lien is placed on the specific property taxes, occurs without the consent of the property owner, and is created by state law.All of the following probably would be exempt from real estate taxes EXCEPTA) public hospitalsB) golf courses operated by the park districtC) synagogues and churchesD) apartment buildings The answer is apartment buildings. Properties such as public hospitals and public parks, as well as religious institutions such as synagogues and churches, are usually exempt from real estate taxes. Apartment buildings, typically operated as investment properties, are taxed.A homeowner considered having a new garage built and talked about the project with a contractor. In April, while the homeowner was on vacation, the contractor began building the garage according to the man's specifications. Work was complete by the end of May. In June, the homeowner returned from vacation and refused to pay for the garage.The contractor decided to file a mechanic's lien in July. Is the contractor entitled to a lien?A) Yes, because the garage is not a part of an owner-occupied residenceB) No, because notice of the lien should have been filed in May,

when the work was completedC) Yes, because the garage was constructed according to the homeowner's specificationsD) No, because there was no express or implied contract between the homeowner and the contractor.The answer is no, because there was no express or implied contract between the homeowner and the contractor.Which tax targets homeowners in particular?A) luxury taxB) personal property taxC) Franchise taxD) real property tax The answer is real property tax. The real property (ad valorem) tax falls on those who own real property, such as homeowners.A lien is created in which of the following ways?A) voluntaryB) involuntaryC) all of theseD) equitable The answer is all of these. There are four ways to create a

lien: voluntary, involuntary, statutory, and equitable.

Two lienholders have entered into a written agreement for one lienholder's interest to take precedence over the other.This agreement isA) a special assessmentB) an ad

valorem agreementC) a subordination agreementD) an equitable agreement The answer is a subordination agreement. Under a subordination agreement, the holder of a superior or prior lien agrees to permit a later lienholder's interest to take

precedence.Real estate taxes that are delinquent for the period specified in state law can be collected throughA) tax sale of the propertyB) garnishment of the wages of the property ownerC) lien against other property of the ownerD) filing of a bankruptcy petition The answer is tax sale of the property General real estate taxes levied for the operation of the government areA) special taxesB) ad valorem taxesC) improvement taxesD) assessment taxes The answer is ad valorem taxes.Which lien usually would be given highest priority in disbursing funds from a foreclosure sale?A) real estate taxes dueB) judgement rendered the day before foreclosureC) mechanics lien for work started before the mortgage was madeD) mortgage dated last year The answer is real estate taxes due.Properties exempt from real estate taxes may be owned by all of the following EXCEPTA) educational institutionsB) religious and charitable organizationsC) municipal organizations, such as park and school districtsD) publicly traded businesses The answer is publicly traded businesses. Exempt properties typically are owned by a government or other public entity, or a religious, educational, or charitable organization A town wants to construct new concrete curbs in a residential neighborhood. How will the town most likely raise the money necessary for the improvementA) Equalized assessmentB) special assessmentC) Ad valorem taxD) Utility lien The answer is special assessment. The town will most likely levy a special assessment against the benefiting properties to pay for the new concrete curbs.A real estate tax lien isA) a general lienB) an equitable lienC) an involuntary, statutory lienD) a voluntary lien The answer is an involuntary, statutory lien. A tax lien, which is made possible by state law, exists without any action by the property owner.A mechanic's lien is properly classified asA) an equitable lienB) a specific lienC) a general lienD) a voluntary lien The answer is a specific lien. A mechanic's lien is a specific lien because it affects a specific property and only that particular property Which of these characteristics apply to a real estate tax lien?A) specific, involuntary lienB) specific, voluntary lienC) general, involuntary lienD) general, voluntary lien The answer is specific, involuntary lien.Which lien affects all real and personal property of a debtor?A) GeneralB) involuntaryC) voluntaryD) specific The answer is general. A general lien attaches to all of a debtor's property as opposed to a specific lien, which affects only a specific property.A general contractor recently filed suit against a homeowner for nonpayment. The contractor now learns that the homeowner has listed the property for sale with a real estate professional. In this situation, which of the following will the contractor's attorney use to protect the contractor's interestA) buyer's lienB) seller's lienC) assessmentD) lis pendens The answer is lis pendens. A recorded lis pendens-a notice of action pending-warns any potential pur-chaser that a property is subject to a pending legal action.