It is critical to know about liens and their possible effects when purchasing or selling property. A lien is a monetary or other legal claim or right on the property that serves as security for another debt or obligation.
The lien holder has the legal authority to foreclose on the property and sell it to collect on the debt. In this blog post, we’ll break down different types of liens, their origin, and the potential consequences when buying or selling a property.
What Is The Difference Between General And Specific Liens?
When a debtor has a general lien, that lien is placed on all of their assets. If you owe back federal income taxes, for instance, the government can put a lien on all of your property, not just your home. Conversely, one asset is covered by a specific lien. Such liens as mortgages are unique to the property being mortgaged.
What Are The 5 General Kinds Of Property Lien?
Here are the types of liens:
Property Taxes Lien:
It is a lien put by the government on a property in case the owner fails to pay property taxes. Failure to satisfy a lien for unpaid property taxes can result in a foreclosure auction of the property and the seizure of any and all personal assets located on the premises.
Judgment Lien:
When you lose a lawsuit, a judgment lien is placed on your property, which was made against you to pay cash to the winning party involved in the case.
An associated court puts a lien to secure the payment of a judgment. Any creditor who has pursued legal action against the landowner in court may be eligible to get this form of a lien.
Mostly, the person who gets benefit from the judgment is the one who is responsible for recording it.
Mortgage Lien:
It is a lien that is put on a property in order to ensure payment of a loan. This is done in order to protect the lender from not being paid back. If the borrower is unable to keep up with their payments, the lender has the right to sell the property to recoup the money.
Attachment Lien:
It is common for a property owner to be prevented from selling their home during the pendency of a court dispute by having an attachment lien imposed against it involuntarily.
Corporate Franchise Tax Lien:
There is a fee imposed on businesses for the privilege of doing business inside the state. Here, a tax lien may be filed when this tax is not paid.
In summation
Liens are a type of security interest placed on a property by a creditor or government agency to ensure payment of a debt.
Property tax liens, judgment liens, attachment liens, mortgage liens, and corporate finance tax liens are just a few examples of the many various liens that can be filed against a property.
Before finalizing a real estate deal, it is crucial to do a title check to reveal and resolve any liens on the property.
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