Types of Lien Records and What They Mean

A lien simply means that an outside party has a right to property until a debt is paid or a duty fulfilled. Lien records are the public recording of any liens which have been placed on property.

There are two types of liens: particular and general. A particular lien is directly related to a piece of property. Mortgages and car loans are common liens of this sort, since the lender retains rights to the property if it is sold or destroyed and claimed on insurance. A general lien might be placed upon property by a contractor or mechanic. In these cases, the property is more valuable than the amount of the lien.

Liens in Relationship to Real Property

Usually liens are put in place by creditors, such as banks who loan people money for homes, cars, boats, or other real property. In these cases, the person who owns the property has borrowed money in order to pay for it, and is not the full owner until the entire debt is repaid to the lender. If the borrower does not pay the lien, the lender can repossess the property and sell it to satisfy the lien.

Lien records for homes or cars should be available from the original lender. You must show why you have an interest in knowing this information, because lien records may be considered private in some states.

Liens in Relationship to Unfulfilled Duty

Liens may also be placed against real property by other parties. For instance, a contractor who works on your remodeling job expects to be paid what you agreed upon. If you refuse to pay him, he has the option to take you to court in a civil suit or place a lien on your home (or both). When you sell your home, all lien records must be satisfied first out of the proceeds of the sale, so that means the contractor would get paid before the mortgage company would receive its money.

If you own the home free and clear (without a mortgage) the contractor would be paid upon the sale of the property. If you die and your heirs sell the property, the lien must still be fulfilled.

Tax Liens

If you owe back taxes and they remain unpaid, the government can file a tax lien. These are public lien records and anyone can search for them by going to the local county courthouse or accessing them online. Tax lien records can be for unpaid property taxes or for unpaid income taxes.

Obtaining Lien Records for Homes or Property

Real estate agents may have resources that will allow you to search the lien records history of a home before you buy it to find out if there are any outstanding liens. Local county courthouses keep information about property and liens which have been filed, so go to the courthouse and ask the staff to help you search the records.

Property tax lien records can be accessed if you are interested in purchasing a piece of property and know that the owner has not been paying property taxes. Each state determines how long property taxes may remain unpaid before the property goes up for auction. These lien records may be very valuable to you if you can obtain the property simply by paying the back taxes.

Resources

The Federal Deposit Insurance Corporation (FDIC) may be able to provide you with a lien release form in the event that the original lender has gone out of business and you have paid your debt as agreed. Visit

http://www.fdic.gov/consumers/consumer/information/lien/

for more information on how to ask the FDIC for a lien release.

The California Courts website has a good information page on how to file a lien on a debtor’s property. While this information is specific to California law, the laws in your own state may be similar. Visit

http://www.courtinfo.ca.gov/selfhelp/smallclaims/collectlien.htm

to find the answers to several frequently asked questions. Use this site for information purposes only, as your state’s laws may vary considerably.