Is there a lien against property I own? How to Find Out and What to Do About It.

by Neal Frankle, CFP ®

Even if you have paid off your mortgage there may be a lien against property you own that you don’t even know about.

In light of the fact there are so many opportunities to get tangled up in real estate problems of this sort, I thought it might make sense to go through this issue in detail.

What is a lien?

A lien is a claim against your property that backs up a debt you have. If the debt isn’t paid, the debt holder has the right to enforce the lien in court and seize your property.

Who Can Put A Mortgage On Your Property?

Many different people can do this. If you have a mortgage against your property the bank that holds the mortgage puts a lien against your home to guarantee payment. But there are several other parties who can file a lien against your property. The Federal government can file a tax lien and so can local governments if you don’t pay your tax bills. Unfortunately, it doesn’t stop there.

If you don’t pay people who do work on your home (like contractors and subcontractors) they can also file liens. Other creditors can also file liens depending on the state you live in. Some states put liens on your home if you don’t pay child support or alimony.

How Do You Find out If There is a Lien against Your Home

This is really simple. One option is to go to the courthouse and look it up. A simpler option is to ask a title company to prepare a report for you. It will cost you a little money but it will save you a great deal of time.

If you have a mortgage on your home, you can save time and money by simply calling the bank that is carrying your loan. They will tell you if there are any other liens on your home besides their own.

What Is The Effect Of Having A Lien On Your Property?

A lien on your home is serious business. When there is a lien against your property it may be tough to sell or refinance your home depending on the State in which you live in. Depending on the type of lien and the State you live in, the courts may force the sale of your home in order to satisfy the debt.

That’s why it’s so important to check to see if there are any such encumbrances against your home.

Bogus Liens

Most liens are legitimate but sometimes people slap liens on your property when they shouldn’t. The most “popular” lien scam is run by contractors who are less than reputable. What they do is perform the work on your home and take your money. But they fail to pay the people who work for them and these subcontractors can put a lien on your property.

Most States allow you to easily side-step this problem. You do that by demanding a “Lien Waiver” from everyone – contractor and subcontractor alike. This document is a declaration that they have received full payment and that they don’t have a claim on your home. But if you are doing work on your home there are other steps you should take to make sure nobody puts a lien on your home. I will be writing more on that topic shortly.

Property liens are serious business. Don’t ignore them. If you have a bonafide debt held against you, pay it. If the lien is phony, get rid of it. Just don’t ignore the issue. It could be a very costly oversight.

Have you ever had a lien placed on your property by a Government body or contractor? What did you do about it?


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