A property lien is a financial claim (or a hold) against a property that must be repaid before the property can be sold.
Simply put, a lien is a claim against a property that ensures a debt or other obligations are either paid or met. This may include supplies and services to contractors and/or subcontractors for work rendered on your property.
What is a lien release (lien waiver)?
A lien release (lien waiver) is when a lien holder (someone that has put a lien on a property) has lifted or waived the lien. This signals that the property is now free of debt and may be sold.
In cases such as a mechanic’s lien (construction lien), a lien waiver (lien release) may be presented at the time of payment by either the contractor or the property owner. This waiver ensures that both parties agree the service has been paid in full. It may may also state that the contractor waives the right to place a lien on the property in the future.
Other ways of attaching a property lien
A range of creditors may also have the right to attach a lien to your property if other avenues of claiming a debt are depleted.
When a bank approves a loan for a real estate property, that loan is a form of conditional ownership by your loan provider. Only when the mortgage is paid in full will the lien be released by the loan provider and the property will be yours.
If a contractor or subcontractor has worked on your property or supplied materials for your property and they have not been paid, a lien may be placed on your property called a mechanic’s lien.
Who can file for mechanic liens against your property?
- Construction companies
Note: This type of lien is not limited to the list above.
Property Tax Liens
If property taxes are not paid, the local government can place a lien against your property until the debt is satisfied.
If you owe back taxes and fail to pay after receiving notice from the IRS, a lien can be placed on your property until the debt is cleared.
Child Support Alimony Liens
If child support or alimony is not paid, the recipient may have the right to place a lien on your property. This lien will stay until the debt is satisfied.
If the judgment is not paid, the recipient may have the right to place a lien on your property.