What to Do If Someone Puts a Lien on Your Property

If someone puts a lien on your property, it means they have a legal claim to the property. Typically, liens are imposed by individuals, organizations, or government bodies to facilitate payment of a debt or obligation owed by the property owner. These liens are recorded on the property's title, indicating that the owner must resolve the debt before selling, refinancing, or transferring ownership. 

For homeowners, liens hold considerable importance as they can influence property ownership, financial responsibilities, and future transactions. 

A lien can obscure the title, hindering a straightforward transfer of ownership. Furthermore, it can impact the ability of prospective homeowners to obtain mortgage loans, as there is a risk that the lienholder's claim may take precedence over the lender's mortgage.

What Does it Mean When a Property Has a Lien?

A lien is a legal claim that a person, contractor, bank, or government agency places on your property to facilitate payment of a loan, debt, or service. It is recorded with the county recorder’s office and appears in the property’s title report.

When a lien is placed on your property, it means that a creditor (e.g., individual, contractor, bank, or government) has a legal interest in your property until you pay off the debt or obligation you owe them. If the debt is not paid after a specific period, usually specified by the contract, the creditor may seize the property. 

A lien may be voluntary or involuntary. It is voluntary when the property owner willingly agrees that the creditor can place a lien on their property as part of a financial arrangement, typically to secure a loan or other form of financing. A typical scenario where a voluntary lien is applicable is a mortgage loan. For example, when you take out a mortgage to buy a home, the lender usually places a lien on the property until the loan is paid off. This ensures the lender can seize the property if you default.

In contrast, an involuntary lien is a lien placed on a property without the owner’s consent, typically due to unpaid debts, legal judgments, or violations. These are imposed by a creditor, government, or court to secure payment.

Who Can Put a Lien on a Property?

A lien can be placed on a property by individuals, businesses, banks, courts, and government agencies. Listed below are individuals and entities that can place a lien on a property:

• Contractors and subcontractors: Contractors, subcontractors, as well as material suppliers who perform work or provide materials for a property improvement, may place a mechanic lien on a property to secure payment for unpaid services or materials.
• Financial Institutions: Banks, credit unions, and other financial institutions that provide mortgage and other home equity loans can place a lien on a property as part of the loan agreement. The lien is active until the loan is paid off.
• Individuals and businesses: Individuals and businesses who win a lawsuit involving a court-ordered debt against a homeowner may place a judgment lien on the property.
• Government agencies: Federal, state, or local government agencies, such as the IRS, state tax authority, or local building department, may place a lien on a property. In the case of the IRS, a lien is placed on the property for unpaid taxes, while the local building department may put a lien on a property for unpaid fines related to code violations. 

Can Someone Put a Lien on Your Home Without You Knowing?

Yes, an individual, creditor, or government agency may place a lien on your home without your knowledge. Although anyone who wishes to file a lien against a property is required to notify the property owners, sometimes a notice may not reach the homeowner until the lien has been recorded with the county's Recorder's Office. At other times, the notice may get lost, ignored, or sent to the incorrect address. 

Sometimes, homeowners may become aware of a lien only by looking up their property's title on the county's Recorder's Office website or during a scheduled home inspection. However, you can also check if there is a lien on your property via our lien records search page. 

To avoid being caught unaware by liens, it is always best to stay informed about your property. You can do so by checking public records such as your property's title online, paying close attention to your emails, and contacting your county's Recorder Office for information.

How To Find Out If There's a Lien on Your Property 

You can find out if there's a lien on your property by searching local property records, the local recorder's office, or online public records. Listed below are essential steps in conducting a lien search on your property:

• Understand the type of lien you are dealing with. Knowing the type of lien helps you conduct a targeted search.
• Gather all the necessary property information to facilitate the search. This information may include property address, owner's name, and parcel number. 
• Visit the County Recorder's website to submit a public record request. Alternatively, you may use an online public records portal like RecordsFinder. Navigate to the lien records search page and input the relevant credentials to search the database. 

What To Do If a Lien is Filed on Your Property 

If a lien is filed on your property, you must take strategic steps to resolve the issue. First, verify the validity of the lien, including its type, amount, and source, to fully understand your responsibilities and options. 

For accurate information, visit the county recorder’s office or utilize their online portal to search for the lien. You can look up your property records by entering the property’s address or parcel number. This search may provide crucial details such as the individual or entity that filed the lien, the amount due, the type of lien, and the date it was recorded. 

If the lien is associated with a code violation or an open permit, contact the building department using the property’s address or parcel number through their online platforms. 

Subsequently, contact the lienholder for clarification if the lien details are unclear. Once you have a clear understanding of the lien information, you can either pay the total amount owed or negotiate a settlement. Ensure that all negotiation details are documented and signed. 

After the debt has been settled, confirm that the lien is officially removed from the title to prevent any future issues with sales, financing, or insurance. You can achieve this by requesting an updated title report from your title company to verify that the lien has been cleared. If the lien was related to a code violation or an open permit, confirm its resolution with the building department.

What Happens if You Don't Pay a Property Lien?

Failure to pay a property lien may expose a homeowner to various liabilities, including:

• Foreclosure: The lienholder may initiate foreclosure proceedings to recover the owed amount. The property could be sold at auction to satisfy the debt.
• Legal Action: The lienholder may sue you to enforce the lien, potentially leading to a court-ordered sale of the property or wage garnishment to collect the debt.
• Damage to Credit: Unpaid liens, especially those reported to credit bureaus such as mechanics’ liens or judgment liens, can significantly lower your credit score, making it harder to secure loans or credit.
• Blocked Sales: A lien obscures the property title, hindering your ability to sell or refinance the property until the lien is settled or addressed
• Seizure of Other Assets: In some cases, if the lienholder obtains a judgment, they may pursue other assets, like bank accounts, to satisfy the debt.

How To Remove a Lien From Your Property 

Removing a lien from your property involves a strategic yet straightforward process. First, confirm whether the lien is valid. You can do this by obtaining a copy of the lien from your county recorder’s office or title company. This will also help you identify the type of lien filed and the amount involved.

After confirming the validity of the lien, the simplest way to remove the lien from your property is to pay the debt in full. Contact the lienholder to negotiate the amount or payment terms. 

If you can not pay the full amount, negotiate a partial payment or payment plan with the lienholder. Always make sure that the agreement is in writing. You may need an attorney to help you review the documents.

Once the debt is paid or the lien is resolved, the lienholder must provide you with a lien release or satisfaction document. In most jurisdictions, you are required to file this with your county recorder’s office to remove the lien from the property title officially.

Can a House Be Sold with a Lien on It?

A property can be sold even if there is an existing lien on it. However, it is generally necessary for the lien to be satisfied either before or during the sale to ensure that the buyer receives a clear title. Typically, the outstanding debt is settled using the proceeds from the sale at closing. At that point, the lienholder will provide a formal release document to remove the lien from the property's title.

FAQs About Property Liens

What kind of liens can be placed on a house?

Several types of liens can be placed on a house depending on the kind of debt the homeowner owes and the circumstances surrounding the debt. These can include mortgage liens, property tax liens, mechanics' or contractors' liens, judgment liens, homeowner association liens, and utility liens.

Is a lien an encumbrance?

A lien is classified as a type of encumbrance. An encumbrance is a legal claim or restriction on a property that can influence its ownership or usage. This can affect the owner's ability to sell or refinance the property. Specifically, a lien allows a creditor to claim the property as collateral for an outstanding debt.

How many liens can you have on a home?

There is no specific legal limit to the number of liens that may be placed on a home. Multiple liens can be filed as long as each one corresponds to a valid, unpaid debt or obligation associated with the property.

Can a lien be inherited from a previous owner?

Yes, when you buy or inherit a property, you may also inherit any liens from the previous owner. Liens are linked to the property itself, not the owner.

Can you put a lien on someone else's house?

Yes, you can place a lien on someone else’s house if you have a valid legal claim against the property or its owner.

Is a lien always permanent?

A lien is not always permanent. Most liens are temporary and stay on a property until you pay off the debt or fix the issue that caused the lien. The time it takes to remove a lien and the steps required depend on the type of lien and the laws in your area.