There's a Lien on my property. What should I do now? Your FAQs Answered.
What is a Lien?
A lien is: “A right to keep possession of property belonging to another person until a debt owed by that person is discharged.” For example, when you have a lien on your home it means that someone besides you has a claim to a portion of your home value. The lien-holders claim is rooted in an unpaid debt, and generally placing a lien on a property is one of the last courses of action in the debt collection process. In some instances, a lien-holder can force the sale of your home through a foreclosure action. This often occurs when a debtor defaults on a mortgage loan or is delinquent on state taxes.
What are the different types of Liens?
There are involuntary liens:
A Tax lien can be placed on your property by the IRS for failure to pay your federal taxes.
A Property Tax Lien can be placed on your property due to unpaid property state taxes.
A Mechanics Lien can be placed on your property by a contractor who was not paid for work performed on property.
A Judgment lien can be place on your property after a creditor secures a judgment against you for an unpaid debt.
There is also Mortgage liens that can be placed on a property, but this is a voluntary lien and not usually an issue during the sale of a home. It’s voluntary because the homeowner agrees that the lender has a claim to the property until the debt is paid.
How do you know if there's a lien on your home?
Before a property sale can go through, a title company is hired to find out whether or not a seller has the legal right to sell the property. The title company searches public records for liens on the property and checks if anyone else has a claim to a portion of the money on the house.
Can I sell my house when there is a lien on it?
No. It is illegal to sell a property with a lien against it, therefore, liens are settled before or at closing with the proceeds of the sale on a home.
Who owns the lien on my property?
You can search the county recorder, clerk, or assessor's office online, or in person at their offices to find this out yourself. This takes a lot of time and is often not foolproof; Witkes Law Firm strongly suggests you hire a title company for a comprehensive search. The title company will be tremendously thorough and inform you how much money you owe, and whom you need to pay it to. A sale on a house cannot go through until the lien is resolved.
How do you remove a lien?
To remove the lien, you need to settle the lien holder’s claim on your property- they will then in turn release the lien. To release the lien, you have 3 options:
Pay the lien or agree to pay the lien at closing with the proceeds from the sale on the home.
Provide concrete proof that there is no debt owed, or that it was paid already.
Dispute the lien and get a court decision requiring release of the lien without payment.
Will I need to hire a lawyer?
In many cases you will need to hire an attorney to resolve a lien, but that does depend on the type of lien and your compliance and ability to meet the lien holders claim against your home.
Why would I resolve my lien if I’m not selling my house?
In most cases, if you want to refinance your home, you will need to settle the lien on your property. This is because it’s incredibly difficult to get a loan from the bank if the title on the property isn't clear. Also, if a person wants to resolve their debts in order to settle their finances, or if they’re being sued by the debt holder, they will likely want to resolve their lien.
We hope this clarified some of your most frequently asked questions regarding liens on a property. Here at Witkes Law Firm, we strongly urge debtors to engage and resolve their accounts before the process of placing a lien on your property commences and completes. If there is a lien against your home that you need resolved, reach out to our offices in Columbus, Ohio. WLF prides itself upon our ability to work with every individual debtor to reach a solution that satisfies their creditors and puts them on a path toward financial stability. Reach out to our team to see how we can help you.
