Lien
Definition and meaning of Lien in real estate.
Lien is a legal claim or right placed on a property by a creditor to secure the payment of a debt or the performance of an obligation. If the debt is not paid, the creditor can foreclose on the property to satisfy the outstanding balance.
In more detail
Liens are public records that attach to the property title, making it difficult for the owner to sell or refinance the home without first paying off the debt. A mortgage is a common example of a voluntary lien, which the homeowner agrees to when borrowing money.
Involuntary liens can be filed by tax authorities for unpaid property taxes, by contractors for unpaid renovation work, or by courts due to legal judgments. Liens are generally paid off in the order they were recorded, though property tax liens usually take priority over all others.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Types | Voluntary (like a mortgage) or involuntary (like a tax or judgment lien) |
| Effect on sale | Must typically be paid off and cleared before a property can be sold with a clean title |
| Priority rules | Determined by recording date, though government tax liens almost always take top priority |
A roofing contractor files a mechanic's lien against a home after the homeowner refuses to pay for a newly installed roof.
Frequently asked questions
How do you find out if a property has a lien on it?
A title company can perform a title search of public records to identify any active liens, or an individual can search county records online or in person.
What is a mechanic's lien?
A mechanic's lien is an involuntary claim filed by a contractor, subcontractor, or supplier who was not paid for work performed or materials supplied for a property improvement.
Related terms
Sources & references
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