3 Methods for Discovering Property Liens, and How to Address Them if Discovered

Explore the most typical forms of property liens and methods to uncover them. When confronted with a property lien, whether on your own property or one you intend to buy, it's essential to be informed. Liens can pose obstacles to property transactions and potentially lead to foreclosure. But how does one go about locating liens? Fear not, as we've compiled several approaches to assist you. This comprehensive guide outlines various strategies for identifying property liens, along with guidance on resolving or eliminating them. Additionally, we'll provide advice on what actions to take upon discovering a lien on your property or one you're interested in purchasing.

Utilize your county recorder’s website to search for property liens. Many county recorders provide online access to property records, including information about liens. Locate the public records search feature on the county recorder’s website, input the property address you're interested in, and filter by 'liens.' A nominal fee may be required to download the records.

• If you're unable to find the website using search engines, contact the county recorder’s office by phone to request the link for searching property liens.
• While each county recorder’s website varies, most offer sorting options by document type (e.g., liens, mortgages, deeds).
• In Louisiana, the term “parish” is used instead of “county,” while Alaska uses “borough.” Use these terms when researching properties in these states.

Visit your county recorder’s office in person to conduct a lien search. If lien records aren’t accessible online, visit the county recorder’s office and submit a records request. Provide the property address you’re investigating and request all available public records of liens. A small fee may apply for obtaining the records.

• Contact the recorder’s office beforehand to inquire about specific procedures for requesting lien records. For instance, you might need to meet with a designated staff member available only on certain days.
• Ensure you visit the county recorder during their regular business hours. Check their website or contact them by phone to determine their operating hours.

Access a compilation of property liens from third-party property records websites. Search for property records websites that offer free account creation, such as PropertyShark.com. Then, look up lien records pertaining to your property of interest and download the property report (a nominal fee may be required). Lien information will be included in the property report, along with other pertinent title documents like deeds and mortgages.

• Note that property reports may sometimes only display liens against the property itself, excluding liens against the owner, such as judgments from lawsuits that mandate the owner to utilize proceeds from property sales for court settlements.

Purchase a comprehensive lien report from U.S. Title Records. Visit the Full Property/Owner Lien Report page on the U.S. Title Records website. Input the property’s street address, city, state, and any apartment or suite number. Click on “Proceed to Checkout” to proceed to a billing page where you can input your payment details. The report is priced at $195.

• The report furnishes detailed insights into all liens against both the property and its owner, encompassing tax liens and judgments (e.g., settlements from legal disputes) that the current owner must settle using proceeds from the property’s sale.
• If the U.S. report is too costly or your property isn’t found in their database, explore similar websites tailored to your state.

Employ a title company to perform a title search on the property. A title company specializes in researching properties for potential buyers. For approximately $150, the company will investigate any liens on both the property and its owner, including tax liens, contractor liens, and judgment liens. Search online or seek recommendations from real estate agents to find a reputable title company in your vicinity.

• Hiring a title company is advisable if you’re seriously contemplating purchasing a property or if you seek certainty regarding any liens on your property.
• The title company conducts thorough investigations and may possess direct connections within the local county recorder’s office.
• If you proceed with the property purchase, the title company can assist in resolving liens and confirming the owner’s legal authority to sell the property, among other tasks.

A property lien grants a creditor rights over a property to cover unpaid debts. For instance, suppose a plumber performs $10,000 worth of work on a house but remains unpaid. The plumber can file a $10,000 lien against the property. In the event of foreclosure, the plumber is entitled to receive $10,000 from the proceeds of the foreclosure.

• In this scenario, the creditor is the plumber, though it could be any individual or entity owed money by the property owner.
• If the property owner settles the debt, the lien is resolved, and the creditor forfeits their entitlement to profits from a sale or foreclosure.

Property liens come in two forms: voluntary and involuntary. A voluntary lien arises from a borrower-creditor agreement, where the creditor lends money to a borrower for property acquisition. The property serves as collateral until the debt is repaid. In contrast, an involuntary lien occurs when a debtor defaults on a debt owed to a creditor. The creditor then files a lien to initiate foreclosure proceedings against the debtor's property to settle the debt.

• Voluntary liens encompass mortgages, car loans, and other financing used for property purchases.
• Involuntary liens include tax liens, mechanic’s liens, and judgment liens.
  • Tax liens stem from unpaid property or income taxes owed to the IRS.
  • Mechanic’s liens arise from unpaid contractor fees for property-related work.
  • Judgment liens result from court-ordered property sale profits used to settle court-awarded settlements and fees.

Settle the debt to clear the lien, if feasible. If financially viable, paying off the debt is the most straightforward method to eliminate a lien from your property. Upon debt settlement, the creditor—the entity to whom you owed money—can file a lien release to abolish the lien.

• If immediate debt repayment is unattainable, discuss installment payment options with the creditor.
• For instance, if faced with an IRS lien due to unpaid taxes, propose a structured payment plan for gradual tax repayment, rather than a lump sum payment.

Negotiate for lien removal at a reduced amount. Initiate negotiations with the creditor to have the lien lifted in exchange for partial upfront debt payment. Establish a plan to settle the remaining debt post-lien removal, or request debt forgiveness in return for a higher upfront payment.

• If the creditor consents to lien removal for a reduced sum, obtain written confirmation of the agreement.
• Consider sending a signed agreement letter outlining the negotiated terms. Request written confirmation of the agreement terms for documentation.

Initiate legal action to contest the lien. If legal counsel deems grounds for legal action exist, they can file a lawsuit seeking lien removal from your property. This recourse is applicable if local laws permit lien challenge via court proceedings or if the creditor fails to issue a lien release post-debt settlement.

• Lawsuits may entail substantial costs and time commitments but may be warranted if property loss is imminent or if the lien's legitimacy is questionable.
• Legal counsel can assess the viability of pursuing legal action. In the absence of grounds, legal counsel may advise against litigation.
• Many states mandate lien holders to furnish a lien release within a stipulated timeframe post-debt settlement. Failure to comply may entitle you to compensation for legal fees and court costs if litigation ensues.

Request a lien release upon settling the debt. Reach out to the creditor and request them to file a lien release. A lien release is an official document confirming full debt settlement. The creditor must file the lien release with the same county where the initial lien was lodged. Once recorded, the lien will be lifted.

• A lien remains attached to your property until the lien release is officially filed. It does not automatically vanish upon debt repayment.

Verify debt settlement status. Directly contact the creditors and inquire about the debt settlement status. If debts have been cleared, request the creditors to submit lien releases, enabling you to proceed with the property purchase. Lien removal requires each creditor to file a lien release.

• If outstanding debts remain, the property seller must resolve these prior to completing the sale.

Consider settling the debts if purchasing the property is non-negotiable. Should the property of your interest be your ideal home, engage the seller and propose covering their outstanding debts in exchange for property acquisition. Evaluate the feasibility based on the debt amounts, making the final decision based on your preferences.

• If agreed upon, enlist legal assistance to draft a formal agreement stipulating property transfer upon debt settlement.

• Typically, a property cannot be bought or sold until any liens are resolved.
• Acquiring a property with an outstanding lien may hold you responsible for settling any debts owed to the lienholder (e.g., reimbursing property taxes to the municipality).
• Liens have the potential to impact property values within a locality, particularly if there are multiple liens against properties in the vicinity.