Selling Property That’s Encumbered by a Lien. If you are planning on selling property that has a lien on it, it is unlikely that the sale will close unless the debt is taken care of. A buyer will expect liens to be paid to allow for a transfer of clear title.

What does it mean to have a tax lien on a property?

The lien is the amount owed and must be paid in order for the sale or refinancing of the property to go through. Other forms of tax debt can also lead to a tax lien on the property.

What should I do if I have a lien on my house?

Where the property remains in the hands of the debtor, some further step must be taken, like recording a notice of the security interest with the appropriate office. If you are planning on selling property that has a lien on it, it is unlikely that the sale will close unless the debt is taken care of.

What happens if a judgment lien is not satisfied?

It is important to note that if the property is transferred, sold, refinanced, gifted, or otherwise conveyed without the lien being satisfied, the judgment remains with the property. To be clear, judgments are against a person, but liens are not.

When do you get a tax lien on a property?

[Read: The Guide for First-Time Homebuyers.] A lien is placed on a property when the homeowner fails to pay annual property taxes to the state or local government. The lien is the amount owed and must be paid in order for the sale or refinancing of the property to go through. Other forms of tax debt can also lead to a tax lien on the property.

How does a paramount lien foreclosure sale work?

Paramount Liens. Foreclosure on a paramount, or senior, lien results in the elimination of all other property liens. This means that the purchaser of property at a paramount lien foreclosure sale will take clear title to the property, free from all other liens.

Can a property lien be placed on a debt?

In general, a property lien is a legal notice that’s put on file as a consequence of an unpaid debt. When creditors want you to know they mean business, they may choose to take legal action by placing a lien on your biggest asset, your home. A lien, or debt, can feel like a huge black spot on your record, but there’s no need to panic.