There is a distinct difference between "public" improvements which benefit the entire community, and "local" improvements, which benefit a particular real estate or certain limited areas of land. The latter improvements are usually financed by means of special or local assessments.

The area or locality benefited by the improvements is known as an "improvement district" or "benefited district."

Often self-governing districts are the source of special assessments. These districts are activated under state law by a city or county or by percentage vote of their inhabitants. Upon activation, the district becomes a separate legal entity governed by a board of directors and possessing many of the characteristics of a city, particularly in the field of examination. As a rule, a district issues its own bonds to finance particular improvements or to compensate for the condemnation of private property.

To repay the funds borrowed through the issuance of bonds, these districts have the power to assess all lands included in the district on an ad valorem basis, such assessments to constitute liens on the land until paid. These liens can be foreclosed by proceedings similar to those pertaining to tax sales and can be superior prior to private property interests.

The most common improvements are: paving or construction of streets and sidewalks, sewers, irrigation or drainage ditches, water structures, parking facilities, etc.

Determination must be made of the superiority, if any, of a special or local assessment lien over an earlier private lien or mortgage, where the statute or local ordinance creating such special lien is silent as to superiority.

Determination must also be made of the exact time in which the assessment becomes a lien on real property.