What is a Property Lien?

Ken Black

A property lien is an interest or claim charged against a property by a lender to secure the repayment of a debt. In the worst-case scenarios, the lender can actually take control of the property. The most common forms of property tax liens are mortgages. If a borrower were to default on a debt, the lien on the property can then be enforced. In some cases, the lien can be enforced immediately, but in other cases the lender may need to wait until property ownership changes hands.

Failure to pay real estate taxes may result in a property lien being filed.
Failure to pay real estate taxes may result in a property lien being filed.

In case of a mortgage lien, the lender holds the title to the property until the loan is dissolved. This only happens once the terms of the loans have been paid in full. At that point, the title of the property will be transferred to the borrower. If the terms of the loan have not been met, the lender can use the property lien to recover as much money as possible through the foreclosure process.

A property lien can be placed on a property for foreclosure debt.
A property lien can be placed on a property for foreclosure debt.

In some cases, it is possible to enforce or impose a lien on a property in cases where payment is not rendered for services or products, which is known as a mechanic's lien. The claimant, in such a case, must prove the money is owed, often by filing the claim with an appropriate court with jurisdiction over the matter. If the respondent is found liable, and unable or unwilling to pay, the claim could be paid with money from a property transfer transaction as a property lien that must be cleared up before ownership can change hands. The sale of the property may even take place without the owner's consent.

The amount that can be collected through any property lien is generally limited to the amount of owed money still outstanding. In some cases, court costs or other costs of collection could be added, if applicable. Thus, the property lien can actually end up costing a certain amount money beyond that which is already owed.

If the value of the real estate or other property is not sufficient enough to cover the property lien, the lender has a couple of options. It may simply write off the remainder of the balance, or it may decide to continue pursuing collection through a law suit, or some other means. If the lender writes off the remainder of the debt, the borrower may still be responsible for taxes on the forgiven amount as if it were income.

In some cases, it may be possible to have more than one property lien on a single property simultaneously. If that is the case, the oldest claim is typically honored first, then subsequent claims are honored in order of oldest to most recent. One lien holder may make their claim subordinate to another lien holder, if both agree. That action would switch the priority level of the two claimants, in case of default.

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Discussion Comments


Mr. A owes me a sum of rupees which he cannot pay back after I've given him ample time. He has a flat in his own name which is mortgaged to a company from where he took out the loan at the time of buying the flat. He also owed some money to another person who took a lien on his flat. Can I put another lien on the same flat to secure my debt? What is the procedure? Please help.


A lien was put against my property from a credit card company for a card in my husband's name. I was never involved with this card, but my house which is in my name only is in a trust. Are they allowed to do this?


Concerning a failure to pay by client, a verbal contract only with a statement showing cash deposit with a estimate approx given with a clause extra for any unforeseen additional work. They gave me an additional payment to satisfy but it is still short 6000.00 Please advise what i can do.

i did extra work that they say was not authorized even though at the time they stated they were very happy with

what i was doing for them.

What are my chances for getting full payment?


Can a collection agency put a lien on a property that isn't in my name? My wife owns our house my name is not on the title but I had the card way before we met -- about six years ago.

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