National Real Estate Practice Exam

What type of lien do real estate taxes fall under?

1. General Lien

2. Specific Lien

3. Judgment Lien

4. Equitable Lien

The correct answer is: Specific Lien

Real estate taxes are classified as a specific lien. This designation comes from the fact that specific liens are tied to a particular piece of property, as opposed to general liens, which could encompass all property owned by the debtor. When real estate taxes are assessed, they create a lien against that specific property, meaning the government has the right to take action against the property if the taxes are not paid. This specific nature of a real estate tax lien ensures that the property serves as collateral, which means if the owner fails to pay their taxes, the government can initiate foreclosure proceedings to recover the owed amount. Other types of liens, such as judgment liens or equitable liens, do not relate directly to the specific obligation of property taxes, which is why they are less relevant in this context. Judgment liens originate from court rulings and may attach to any property owned by the debtor, while equitable liens arise typically from an agreement or the principles of fairness, rather than from a statutory obligation like taxes. Thus, the function and applicability of real estate taxes firmly categorize them as specific liens.