How To Put A Lien On A Property

  • June 2, 2022
  • 4 min read

Securing what is rightfully owed to you can sometimes involve putting a lien on a person’s property. Whether it’s for unpaid debts, damages, or compensation, filing a lien against real estate or a vehicle is a strategic way to leverage assets as collateral. In this blog post, we’ll explore the process of placing a lien on someone’s property, the legalities involved, and the potential outcomes.

Understanding the Basics of Liens

Before delving into the process, let’s establish what a lien is. Essentially, a lien is a claim of debt against an individual, with their property listed as collateral. While mortgages are a common example, we’re focusing on the scenario where you, as a creditor, want to place a lien on someone’s property due to unpaid debts, damages, or a breach of contract.

Why Place a Lien?

The decision to place a lien on someone’s property usually arises when they owe you money, have caused you damages, or failed to fulfill a contractual obligation. It could involve scenarios like unpaid debts, contractual disputes, or a contractor seeking payment for work done on a property. Before proceeding, it’s crucial to understand the specific circumstances that lead you to consider filing a lien.

Authorization to File a Lien

Filing a lien on a property isn’t a unilateral action. It requires authorization, and one of two parties typically provides this authorization:

  1. Property Owner: In some cases, property owners willingly give authorization for a lien. For instance, when obtaining a mortgage, property owners voluntarily accept a lien on their property as collateral. Contractors may also have property owners sign off on permission to file a lien in the event of non-payment.
  2. Judge or Court Authorization: If you lack authorization from the property owner, you may need a judge or court to sign off on the lien. This often involves presenting a valid claim, such as a court judgment or debt, to obtain the necessary authorization.

The Role of the Recorder of Deeds or Clerk of Court

The party responsible for filing liens varies by jurisdiction. In some places, it’s the Recorder of Deeds, while in others, it’s the Clerk of Court. Once authorized, the lien paperwork—typically one or two signed and notarized documents—is submitted to this official. They review the documents to ensure proper formatting, accurate information, and compliance with legal requirements.

Mechanics of Filing a Lien

The lien paperwork must include essential details:

  • Legal Description: A precise legal description of the property is crucial. It goes beyond a mere address and involves a detailed description found in land records, outlining the dimensions, boundaries, and features of the property.
  • Signatures: Properly authorized signatures, either from the property owner or a judge, are necessary for the lien to be valid.
  • Notarization: Documents are often required to be notarized to add an extra layer of authentication.

Once submitted, the Clerk stamps the documents with a received date and time, officially recording them in the land records. This creates a government record, signaling the initiation of the lien process.

Enforcing the Lien

Filing a lien doesn’t guarantee immediate financial gain. Instead, it provides leverage for enforcing your claim. Depending on jurisdiction, you may have the option to foreclose on the lien, particularly if the property owner wants to sell or refinance. However, being in a secondary position after a first mortgage can impact the practicality of foreclosure.

Recovering Losses

While a lien itself doesn’t result in instant payment, it can hinder property transactions until the lien is resolved. Some states allow the recovery of filing costs, court fees, and even statutory interest. Recovering your losses depends on the debtor’s willingness to address the lien, whether through payment, negotiation, or other means.

Investigation and Legal Advice

Before pursuing a lien, conducting a thorough investigation is crucial. Determine all the properties owned by the debtor, even those in different jurisdictions. Seeking legal advice is highly recommended to ensure you follow the correct procedures, understand jurisdiction-specific rules, and optimize your chances of successful recovery.

Placing a lien on someone’s property is a strategic move to protect your interests and recover what is owed to you. It involves a careful legal process, authorization from the property owner or a judge, and adherence to specific documentation requirements. While it doesn’t guarantee immediate financial gain, a properly filed lien can serve as a powerful tool in the pursuit of justice and compensation.

Share Your Experiences: If you’ve dealt with placing liens or have questions about the process, feel free to share your insights in the comments. Your experiences may offer valuable perspectives to others navigating similar situations. Remember, while this information provides a general overview, seeking professional legal advice tailored to your specific circumstances is crucial.

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