Owning property is one of the fastest ways to increase your net worth. However, it’s possible in some circumstances to have a property lien placed upon what you own. The good news is that navigating this situation isn’t as complicated as it might seem.
Let’s take a look at everything you need to know.
So, What Is a Property Lien?
For those who are unaware, a lien is a legal claim that has been issued against a particular property.
This occurs when the lienholder has a legal interest in the property due to a variety of circumstances. One of the most common is the belief that the current owner of the property has not satisfied the criteria for ownership.
If a lien is placed on a property, you can prevent them from selling it. Most commonly, this applies to houses and cars. In the case of land, it can also prevent them from subdividing the property that they own.
How Does It Work?
Liens are typically filed against property owners by lenders. For example, let’s assume somebody does not satisfy the current terms of their mortgage.
The mortgage lender may file a lien against the property owner. It’s also possible for local governments to file liens in the event that someone does not pay their property taxes.
Finally, people sometimes file liens against property owners if they were previously awarded a property judgment that was not satisfied.
What Are The Different Types?
There are multiple different types of liens you may encounter.
One of the most common is a mortgage lien. This occurs when a mortgage lender provides a loan for a specific property. This is not a negative occurrence, and it simply shows that the lender has a vested interest in the property due to the money they contributed toward it.
When a property owner does not pay their taxes, they may have a tax lien placed upon their property. If the lien taxes are not satisfied, the government may eventually sell the house to recoup its losses.
Interestingly, someone who has completed a job on your property can place a lien if they are not paid for the work. This is a process that exists specifically to prevent contractors from being taken advantage of.
A lien of this type is also known as a construction lien. Looking to learn more information about this process? Check out this resource for more info about a lien waiver.
Managing a Property Lien Might Seem Difficult
The above information details everything you need to keep in mind about a property lien. From here, you can be sure to make the decision that is best for you and get back on track as soon as possible.
Looking for more tips that can help you out later on? Check out the rest of our blog for plenty of more useful information.
