What Does it Mean to Set a Lien on a Home?

A lien is a claim on a residential or business property for certain legal duties of the proprietor. These obligations can vary, from outstanding charges for improvements and maintenance, to outstanding accounts on mortgage loans and taxation. A valid lien must be fulfilled either by full payment of this duty or by satisfaction once the property is sold.

Mechanics’ Liens

A”mechanic’s” or”structure” lien shields the supplier of providers whose charges to the proprietor for repairs, maintenance or improvements have gone outstanding. These solutions have to be performed to enhance or maintain the property’s value. The contractor records the lien with the country recorder or clerk of court. Homeowners are responsible for charges by builders as well as the subcontractors that, in concept, were to be paid by the contractor. Before the lien may file, california requires a 20-day notice.

Mortgage Lien

A lien on your property also exists when a mortgage loan is used to purchase the home. In exchange for use of this money required to purchase the home, the creditor has a legal claim on the property, as evidenced by the mortgage notice that the borrower must register in the sale closing. A mortgage lien, if unsatisfied with timely payment of this loan, may bring about a foreclosure by the creditor and sale of the home at auction.

Tax Lien

A tax lien may be filed against the property from the Internal Revenue Service for unpaid federal taxes, or from the Franchise Tax Board in California for unpaid property taxes. A Notice of Lien is filed with the county recorder and, in the case of commercial property, with the secretary of state. The lien”encumbers” the property, and will prevent the owner from refinancing, selling or moving the property unless the lien is satisfied.


Liens can be published by the proprietor meeting the obligation on which the lien is established. After the responsibility is fulfilled, the lienholder files a discharge with the country recorder where the lien was originally filed. If that is not done, the operator must present evidence of satisfaction to the recorder and apply for release of the lien. Recorded liens will be the topic of a title hunt whenever a property is the subject of a sales transaction, and also for most loan applications secured by the property.

Credit Significance

Liens from the property could be recorded by credit-monitoring agencies and affect your credit score, which then may impact your ability to secure different types of loans, both secured and unsecured. It is in the best interest of the property owner to satisfy all liens whenever possible, since the existence of a lien on a home severely affects its market value to potential buyers.

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