What Is a Lien? Can You Sell a Property with a Lien on It?
A lien is essentially an unpaid bill that was secured by your property. It can be for unpaid taxes (a tax lien), a cash settlement a judge awarded against you or unpaid lawyer bills (a judgment lien), or it can be for unpaid bills relating to a home improvement project (a mechanic’s lien).
First, Determine If It’s Yours
First and foremost, you want to make sure the lien is, in fact, yours. Title officers search for these holds using your name, so sometimes multiple matches will pop up. Family members who share the same or similar names or people who have unusually common names might see liens on their title report that don’t belong to them.
If it’s a case of mistaken identity, work with your real estate agent and title officer to clear it up. Usually, you will just need to provide proof of your birthdate and address.
If the lien isn’t yours and it’s not a case of mistaken identity, it might belong to the previous owner of the house. If this is the case, the title officer will contact the previous owner to see if they have a copy of the release of lien to record. If they don’t, either the old owner or title officer will contact the entity who issued the lien and ask them to release it.
If that doesn’t work, you can always instigate legal action, but this is costly in terms of time and money, and it may prevent you from selling your property. Unfortunately, in this case, it may be in your best interest to pay the lien out of your sale proceeds and move on.
To prevent delays in closing, search for liens on your property before getting to the offer stage. A title officer can do this for you, or you can do it yourself online, using your county recorder, assessor, or clerk’s website. All you need is the property owner’s name and address.
What to Do if the Lien is Yours
If the lien does belong to you and is correct, you must contact the entity that issued it and ask how best to resolve the issue. Agreeing to pay for the lien out of sale proceeds is usually the cleanest and easiest way to do this.
If the lien belongs to you but represents a bill that was already paid, you have two options:
- You can contact the entity that issued the lien and ask for them to release it.
- You can present the title officer with proof in the form of receipts that the debt was paid.
To ensure settled mechanic’s liens don’t hold up the sale of your home, ask vendors for a release as soon as you make the final payment. The release is like a receipt but more official and it will resolve title issues in the case you want to close before the liens have cleared the system.
If you have any questions about a lien on your property, it’s always best to consult an attorney. They will guide you through the best course of action and make sure you are legally protected.