1. Real Estate Taxes & Liens Zaharopoulos Phoenix College REA179 & REA180

2. Encumbrances Easements Easements Deed Restrictions Deed Restrictions Encroachments Encroachments Liens Liens

3. Lien- a charge or claim against a person’s property Lien- a charge or claim against a person’s property Security -something of value that borrower promises to give lender in case of default Security -something of value that borrower promises to give lender in case of default

4. Definitions Liens / overview of categories: Liens / overview of categories: Voluntary Voluntary Involuntary Involuntary Statutory Statutory Equitable Equitable General General Specific Specific

5. Categories Statutory – created by government statute Statutory – created by government statute Equitable – created by the courts Equitable – created by the courts

6. General Liens Judgment liens Judgment liens Estate & inheritance tax liens Estate & inheritance tax liens Debts of a decedent Debts of a decedent Corporation franchise tax liens Corporation franchise tax liens IRS liens (income tax) IRS liens (income tax)

7. Specific Liens Real estate tax liens Real estate tax liens Special assessment liens Special assessment liens Mortgage liens Mortgage liens Trust deed liens Trust deed liens Mechanic’s liens Mechanic’s liens Utility liens Utility liens Bail bond liens Bail bond liens Vendor’s liens Vendor’s liens

8. Voluntary / Involuntary Voluntary –specific Statutory – created by gov’t statute Statutory – created by gov’t statute Mortgage - secures the realty Mortgage - secures the realty Auto - secures the personalty Auto - secures the personalty Bail bond Bail bond

9. InvoluntaryGeneral Statutory ( created by govt) Statutory ( created by govt) Estate taxes – attached to the estate Estate taxes – attached to the estate Inheritance taxes – attached to the beneficiaries Inheritance taxes – attached to the beneficiaries Decedent’s debts- attached to the estate Decedent’s debts- attached to the estate IRS income taxes – attached to the taxpayer IRS income taxes – attached to the taxpayer Corporation Franchise Tx Corporation Franchise Tx Equitable (created by courts) Equitable (created by courts) Judgments-attached to the debtor Judgments-attached to the debtor Vendor’s lien –attached to vendee Vendor’s lien –attached to vendee Specific Statutory Real Estate taxes – attached to parcel Special assessments – attached to parcel– Mechanic’s liens-attached to realty Equitable Judgments-attached to the debtor Utility bills

10. Effect of Liens on Title A lien attaches to real property the moment it is filed A lien attaches to real property the moment it is filed A lien does not attach to personal property until that property is seized A lien does not attach to personal property until that property is seized Liens run with the land Liens run with the land Liens attach to the property; not the property owner Liens attach to the property; not the property owner

11. Lien Priority Real estate taxes and assessments have top priority Real estate taxes and assessments have top priority All other liens in order of recordation (with the exception of mechanic’s liens) All other liens in order of recordation (with the exception of mechanic’s liens)

12. Subordination Agreements Agreements between lenders which can change lien priority

13. Taxing Bodies (some) States States counties counties Cities, towns, villages Cities, towns, villages Water districts Water districts School districts (public), including community colleges School districts (public), including community colleges Fire, police, public hospitals, public libraries Drainage districts Sanitary districts Parks, forest preserves, recreation districts

14. Determining Tax Amount Ad valorem Ad valorem Assessed value Assessed value

15. Determining Tax Amount Budget process Budget process Appropriation process Appropriation process Appraisal Appraisal Allocation Allocation Tax rate calculation Tax rate calculation Equalization process Equalization process

16. Ways to express tax rate Mil rate =.001 Mil rate =.001 Dollars per Hundred Dollars per Hundred Dollars per Thousand Dollars per Thousand

17. Tax Rate = Total Budget Need / Total Assessed Value 0.01 = 50,000,000 / 5,000,000,000 0.01 = 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 10,000,0002,000,000,000 Phoenix 10,000,0001,000,000,000 Maricopa 30,000,0002,000,000,000 Totals 50,000,0005,000,000,0000.0110$1.00$10.00

18. Unpaid Property Taxes Terminology: Redemption period Redemption period Equitable right of redemption Equitable right of redemption Tax Certificate Sale Tax Certificate Sale Certificate of Purchase Certificate of Purchase Quiet Title Suit Quiet Title Suit Treasurer’s Deed Treasurer’s Deed

19. Unpaid Property Taxes 1) Actual Tax Sale 2) Tax Certificate Sale

20. Equalization To correct inequalities in statewide tax assessments To correct inequalities in statewide tax assessments Uniformity Uniformity Equalization factor is multiplied to assessed value before tax rate applied Equalization factor is multiplied to assessed value before tax rate applied

21. Can you appeal your assessed value? Maricopa County Tax Assessor’s Office Maricopa County Tax Assessor’s Office State Board of Equalization State Board of Equalization Superior Court Superior Courtwww.maricopa.gov

22. Liens, continued Special Assessments Special Assessments Mechanic’s Liens Mechanic’s Liens Judgments Judgments Lis Pendens Lis Pendens Attachments – writ of attachment Attachments – writ of attachment