Tax Lien

Lien Definition

Definition In the domain of law, a lien is a kind of safety interest given over a part of a property in order to assure the payment of a sum of money owed or the performance of any other obligation.

A lien is a claim which is legal or it can also mean holding some kind of property, irrespective if it is real or personal property, therefore it can be made collateral on the basis of monies or services which are a type of debt owed to a person or entity. A lien in general is valuable under conditions like second mortgages, loans associated to a vehicle title, or cash loaned on the basis of any other important product which is in the possession of a borrower.

It can keep the person who borrows from selling the household, or at least keep that person from giving up to the property title.

Default loan Any property which involves a lien may be forced to be sold by the loaner, for collecting what is owed, in the situation in which the loan is in default. Whether the borrower wants to sell the property, the person who holds the lien has to be paid before the title will be cleared in order to perform the transfer to the buyer.

Lien types There are different types of liens, and one of the best known is a lien which is known as a construction lien. This kind of lien is implemented when the property owner owes cash for materials or work that made the property better in some way. This may include remedy, new construction work, maintenance, beside things like renovation and landscaping.

Conditions When buying real estate, it is essential to be sure there is no lien on the property which will stop you secure a clear title. This is achieved by conducting, or employing an abstract company for conducting conduct, an abstract of title or title search. This just means to develop and examine a set of papers publicly recorded concerning the property history.

A search of the title will show in general if there is a lien or not and if the seller is recognized as the legal owner of the property. It must as well show the precise legal presentation of property, apart from offering details concerning a lien or other encumbrances on the basis of the title.

This is very important if you are employing imaginative financing methods in order to buy the property, like owner financing or a contract for the land. Otherwise, if you have paid the previously mentioned price which was agreed upon, you can find out that you still are not the owner of the property freely and clearly.

Other lien meanings In different countries lien means a kind of safety interest, actually a right, a passive one, to keep property, without selling it until the debt or other type of obligation is paid. In other countries, unlike in the USA it is just a type of security interest based on possession.