is created by law. Examples include a real estate tax lien

C8 - PA Real Estate Fundamentals Flashcards assessmentAn assessment, or assessed value, is the official value of real estate that is used for tax purposes. Real estate is valued, or assessed, for tax purposes by county assessors, evaluators, or appraisers. Assessments are normally a percentage of the property's fair market value. Depending on the type of property and the taxing jurisdiction within which it is located, one value may be assigned to the total property or separate values may be assigned to the land and the building.involuntary lienlien that is not a matter of choice for the property owner; it is created by law. Examples include a real estate tax lien and a court-ordered judgment that requires payment of an obligation.voluntary lienlien that is created intentionally by a debtor's action. When someone borrows money, the lender generally requires some form of security. Security, also referred to as collateral, is something of value the borrower promises to give the lender if the borrower fails to repay the debt. When the security is real estate, the borrower gives the lender the right to file a lien on the property.judgmentA judgment is a decree issued by a court. When the decree establishes the amount a debtor owes and provides for money to be awarded, it is referred to as a money judgment. A judgment becomes a general, involuntary lien on both real and personal property owned by the debtor. A judgment is not the same as a mortgage because no specific parcel of real estate was given as security at the time the debt was created. A lien usually covers only property located within the county in which the judgment is issued. As a result, notices of the lien must be filed in any county to which a creditor wishes to extend the lien coverage. Judgments against real estate take priority as of the date they are filed in the prothonotary's office; judgments against personal property become a lien when the creditor orders the sheriff to levy the property and the property is actually seized.equalization factorIn some jurisdictions, when it is necessary to correct general inequalities in statewide tax assessments, an equalization factor is used to achieve uniformity. This factor may be applied to raise or lower assessments in a particular county.

real estate taxBecause the location of real estate is permanently fixed, the government can levy taxes with a high degree of certainty that they will be collected. Real estate tax liens usually have priority over other previously recorded liens.This position is especially desirable if the lien must be enforced by a court-ordered sale. There are two types of

real estate taxes:1. general real estate taxes (also called

ad valorem taxes)2. and special assessments or improvement taxes.Both are levied against specific parcels of property and automatically become liens on those properties.general lieno General liens usually affect all property, both real and personal, of a debtor. These liens include judgments, estate and inheritance taxes, debts of a deceased person, corporation franchise taxes, and Internal Revenue Service taxes.liena charge or claim against a property that is made to enforce the payment of a debt of the property owner. All liens are viewed as encumbrances, but not all encumbrances are liens. The distinction between the two is that liens are financial or monetary in nature, while other encumbrances may be physical in nature, such as easements and encroachments. A lien represents only an interest in the ownership; it does not constitute ownership in the property. The lienholder's interest gives him or her the right to force the sale of the property if necessary to collect a debt. Generally, a lienholder must institute a legal action to force the sale or acquire title. The debt is then paid out of the sale's proceeds.To enforce a judgment, the creditor must obtain....a writ of execution from the court. The writ directs the sheriff to seize and sell as much of the debtor's property as is necessary to pay both the debt and the expenses of the sale. When real property is sold to satisfy the debt, the debtor should demand a legal document known as a satisfaction of judgment (or satisfaction piece). This is filed with the prothonotary so that the record is cleared of the judgment.mortgage lienA mortgage lien is a specific, voluntary lien on real estate given to a lender by the borrower as security for a mortgage loan. It becomes a lien on real property when the lender records the mortgage in the recorder of deeds office in the county where the property is located. Mortgage lenders generally require a first lien, referred to as a first mortgage lien. This means that, aside from real estate taxes, no other major liens against the property would take

priority over the mortgage lien. Subsequent liens are referred to as junior liens. A second mortgage, for example, would be junior to a first mortgage lien. Mortgages will be discussed in greater detail in a later unit.tax sale Real estate taxes that have been delinquent for the period of time specified by state law can be collected through a tax foreclosure or a tax sale.lis pendensThere is often a considerable delay between the time a lawsuit is filed and the time final judgment is rendered.When any suit is filed that affects title to real estate, a special notice, known as a lis pendens (Latin for "litigation

pending") is recorded. A lis pendens is not itself a lien, but rather a notice of a possible future lien. Recording a lis pendens notifies all interested parties, such as prospective purchasers and lenders, that there is a potential claim against the property. It also establishes a priority for the later lien; the lien is backdated to the recording date of the lis pendens.subordination agreementwritten agreements between lienholders to change the priority of their liens. Under a subordination agreement, the holder of a superior or prior lien agrees to permit a junior