How to Check for Property Liens – Complete Guide

By: ROS Team

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Are you in the process of buying a property or home, but you’re unsure of whether it has any liens? Not knowing ahead of time could become a real headache for you. Resolving property liens requires money and time and could jeopardize the property’s purchase. In addition, you’ll probably have to hire a real estate attorney for assistance.

We have gathered information about property liens and how to check liens on property before beginning the buying process so you can hopefully avoid the pitfalls and headaches associated with removing them later.

1- What is a Property Lien
2- Different Kinds of Liens
3- How to Check for Property Liens
4- Is it Possible to Buy a Property
5- FAQs

What is a Property Lien?

A property lien binds property owners to a property until they’ve met some type of financial obligation. In other words, it is basically a legal claim against assets that enables the holder to get access to the property.  Official property liens are filed with the county clerk’s office.

Are There Different Kinds of Liens?

Property liens, particularly those on residential homes, can be divided into two major categories: voluntary and involuntary liens.

Voluntary Lien: A voluntary lien is usually a mortgage lien. A home that was financed by a lender will have a mortgage lien until the loan is paid off in full. Since buyers agree that a lien will be placed on the property until they’ve paid off the loan, it is a voluntary lien. Voluntary liens typically don’t create issues when transferring the title to a new owner.

Involuntary Lien: Involuntary liens are unmet financial obligations such as unpaid real estate or income taxes.

How to Check for Property Liens

Buyers need to know if a property that they intend to buy has a lien against it. To do that, it’s important to know how to find tax liens on the property.

There are Mainly Three Ways to Search for a Lien on the Property:

  1. Property liens are public records, so you can find them in the county clerk’s database or using online sites like UnMask. You may also need to visit the tax assessor’s office to find lien information for a property. If you’re using an electronic database, you can search for property liens by address. Otherwise, you can request a free hard copy of the report.
  1. Title companies can also run property lien searches for a fee. In addition to getting insight on whether or not the property has any liens, title companies may also provide other valuable information like buyer history.
  1. There are also third-party companies that you can use to locate property lien information. Third-party companies, such as Property Shark, will research the property’s address for possible liens for a nominal fee.

Is it Possible to Buy a Property that Has a Lien On it?

Technically, you cannot buy a property unless the seller clears the lien before it’s sold. However, even if the seller doesn’t clear the lien it is still possible to buy the property. In that case, the buyer would have to include the amount of the lien into the deal. Voluntary liens are easier to settle than involuntary liens before proceeding with the sale.

Should You Buy a Property that Has a Lien On It?

Some buyers would prefer not to buy a property that has a lien. But, if it’s your dream home and you want to buy it anyway, there are few factors to consider.

The first is being okay with the extended length of time it will take to complete the buying process. It can take months to release or resolve a property lien.

The second factor you’ll want to consider is cost. You’ll have to shell out more money to cover expenses like agent fees and, possibly, court costs. Furthermore, if you’re planning on financing the purchase, be aware that some lenders won’t approve your loan application until you can provide a clear title.

FAQs

Where is the Best Place to Find Liens on Property?

The best place to find liens on a property is typical with the county recorder’s office where the property is located, or through online public record databases or property title search companies.

What is the most Common Type of Lien on Property?

The most common type of lien on property is a property tax lien.

Who can Place a Lien on a Property?

Typically, a lien is placed by a creditor or someone with a legal claim to the property. This can include mortgage lenders, judgment holders, tax authorities, contractors, or homeowners associations.

What Information do I Need to Check for Property Liens?

To check for property liens, you will typically need the property’s address or legal description, the owner’s name, and any relevant loan or judgment information.

What are the Consequences of Having a Property Lien?

Having a property lien can prevent you from selling or refinancing your property, and may result in foreclosure if the lien is not satisfied.

How do I Remove a Property Lien?

The process for removing a property lien will depend on the type of lien and the creditor holding the lien. You may need to negotiate a payment plan or settlement, file a legal claim, or wait for the lien to expire.

How can I Prevent Property Liens?

To prevent property liens, you should always pay your debts on time, obtain and review title insurance before purchasing a property, and avoid disputes with contractors, homeowners associations, or other creditors.

Final Thoughts

Deciding whether or not to buy a property that has a lien on it can be challenging. Do your due diligence in researching the property’s title before you formally begin the buying process. If you find that the property has a lien against it, consult with a real estate agent and/or real estate attorney for advice.