What is a property lien and how do they affect title?


So what is a property lien and has your title been affected by it?

“A property lien is an instrument or form of collateral to secure a specific interest related to real property and land (also considered a type of encumbrance or cloud on title). The interest or purpose is usually monetary in nature (such as a loan or mortgage) or in the form of a judgment, mechanic, HOA, or tax lien. Liens are either voluntary (mortgage, lines of credit) or involuntary (tax liens, judgment liens, etc.) and are executed or “perfected” by recordation. Liens can be enforced through foreclosure proceedings. If the lien amounts are paid before the lien is enforced or during a transfer or sale of the property, it is deemed “released.”  In most states, a judgment cannot be recorded with the county unless the case is processed in or transferred to, a superior or a higher court (not Justice or City Courts). A general lien is a lien that is placed on and follows an individual. These liens are typically tax liens filed by the federal government, i.e., Internal Revenue Service. A municipal lien is given by a municipality (or municipal authority) against a property owner(s). This is filed when the property owner is to benefit from a public improvement plan by the municipal authority. (Please note that federal and state tax liens may remain attached to the subject property even after a foreclosure, although the principal balances can sometimes be negotiated)”.

Source: https://www.ustitlerecords.com/title-search-resources

One of the more risky moves in purchasing real estate is making an offer to buy without checking to see if there are liens or encumbrances on the property. Another mistake is not ensuring that the property is free of encumbrances such as tax liens or delinquent taxes when the purchase involves seller financing or an and owner carry contract. In some states, liens are not public records and not as easily accessible. Title insurance from a local title company is always your best insurance for clear title reduce any future liabilities”.

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