Liens are legal claims on real property. They can be established through the property owner’s agreement or a court order. Once established, a lien is typically recorded against the specific property parcel with the county recorder’s office.
A lien on a property can impact the owner’s ability to prove a clear title when attempting to sell. This means that unless resolved by the seller, the new owner would be responsible for addressing the lien. Additionally, a lien may hinder the property owner’s ability to secure a mortgage or subdivide the property until the lien is resolved.
How Does a Lien Work?
When a lien is placed on a property, it acts as a security interest for the lienholder. For instance, if a homeowner takes out a mortgage, the bank holds a lien on the property until the loan is paid off. Liens can also arise from unpaid taxes, contractor work, or legal judgments.
Types of Liens
Mortgage Liens:
These are voluntary liens homeowners give to lenders when they take out a mortgage. This type of lien remains on a title until the mortgage is fully paid off.
Tax Liens:
Tax liens are imposed by the government when property taxes are not paid and can take precedence over other types of liens.
Mechanic’s Liens:
Contractors or suppliers who have not been paid for work done on a property can file these liens.
Judgment Liens:
These result from court judgments against the property owner in a lawsuit.
How to Find a Lien on a Property
Wondering how to find if there’s a lien on a property? Liens are usually public records, which means they are accessible to anyone interested in reviewing them. Here are a few ways to check:
County Recorder’s Office
Visit the local county recorder’s office to search for liens filed against a property. They often have an online database you can check.
Title Companies
Talk to Cottonwood Title to conduct a thorough title search. A good title company can ensure there are no recorded liens.
Can a title company remove a lien?
While title companies can facilitate the process, the responsibility to clear the debt or dispute the claim lies with the property owner. Here are the steps to take:
Pay Off the Debt
The most direct way to remove a lien is to fully pay off the debt owed. Once paid, the lienholder will provide a release document sometimes called a reconveyance.
Dispute the Lien
If you believe a lien has been placed in error, you can dispute it through legal channels. An attorney specializing in real estate can guide you through this process.
Negotiate a Settlement
Sometimes, lienholders are willing to negotiate a settlement for less than the total amount owed. Ensure that any agreement is documented and legally binding.
Whether you’re trying to determine if there are liens on a property, understand the implications of existing liens, or need to remove one, the key is to stay informed and seek professional assistance when necessary. At Cottonwood Title, we’re here to help you every step of the way. If you have any questions about liens or need assistance with title searches, don’t hesitate to reach out. Our expert team is ready to help.
