Lien

A lien is a legal claim or encumbrance placed on a property, typically as security for a debt. Liens must usually be paid off before a property can be sold or refinanced.

Common Types of Liens:

Voluntary Liens:

• Mortgage lien: Your home loan
• Home equity loan/HELOC: Secondary loan against equity

  Involuntary Liens:

• Tax lien: Unpaid property or income taxes
• Mechanic's lien: Unpaid contractors/workers
• Judgment lien: Court judgment against you
• HOA lien: Unpaid HOA dues

  How Liens Affect You:

• Must be paid at closing when selling
• Can prevent refinancing
• May lead to foreclosure
• Affect your credit
• Pass to new owners if not cleared

  Lien Priority:

When a property is sold, liens are paid in order of priority: 1. Property tax liens (usually first) 2. First mortgage 3. Other liens (by recording date)

Discovering Liens: Title searches reveal liens on a property. This is why title insurance is important—it protects against undiscovered liens.

Removing a Lien:

• Pay the debt in full
• Negotiate a settlement
• Wait for expiration (varies by type)
• Challenge invalid liens in court

  Avoiding Liens:

• Pay property taxes on time
• Pay contractors promptly
• Settle legal judgments
• Keep HOA dues current