When you are researching buying property, you probably came across the term property lien. In some cases, a lien can be perfectly normal. In other cases, it can be very bad.
A lien is a legal claim against a property. Although the property can be anything, in this case, it is real property like a house or land.
Types of liens
There are a few types of liens that you may see. These are:
- Mortgages – These are perfectly normal when you borrow money to purchase a home. Unless you do not pay them, this type doesn’t count against you.
- Tax liens – When you fail to pay property tax, income tax or any other type of tax, you might face a tax lien. Tax liens are very bad for your property, especially if you want to buy or sell the property.
- General judgment liens– A judgment lien happens when you do not pay a debt, and your creditor sues you. The courts may put a lien on your property to force you to pay the debt.
In each case, your property is at risk. A particularly determined creditor can force you to pay, seize your property. It can be very difficult to sell your property if there is a lien on it.
Removing a lien
To remove a lien, you simply have to pay the debt. This is by far the most simple way to remove one. Remember that in some cases, you will not be able to sell the property until you satisfy the lien.
Although having a lien is not always detrimental it is important to make sure there isn’t one before you purchase a property. The seller should satisfy the lien either before the sale or with the proceeds from the sale.