What Does Lien Mean in Real Estate?

When you buy a home, the mortgage lender will secure the real estate purchase with a “lien.”

In the most basic sense, a lien is a claim on the property. Be it a strata property or normal real estate property that you have invested in, lien is the same in both cases! Although for the former, that is, strata property, you might need expert guidance from consultants like Michael Teys who is a well-known professional in this domain.

However, if you want to know more about what a lien is, take a look at this scenario explained, example, a lien will be filed on the property with the county if you have unpaid property taxes. This will count as a “deed against” the property and also show up on the mortgage. If the mortgage company forecloses on the property, they will sell the home to pay off the property taxes.

A lien is a hold on a property that a creditor has so that they can get paid back. Any loan taken out on a house or commercial property will have a lien on it. Liens are those claims on money that a person or entity holds against a property. Liens can be placed for unpaid property taxes, judgments, unpaid mortgages, or other debts. People interested in getting a lien on a house or other assets can explore realtors and estate agents to get assistance as well as information about the procedure. Moreover, the benefit of a lien is, the lienholder then holds a particular piece of property as collateral until the debt is repaid in full. The lienholder has the right to foreclose on the collateral and sell the property in order to pay back the debt. They can explore the market to deduce their property value and search online for buyers with keywords like “sell my house fast las vegas (or elsewhere)” to get various offers from real estate agents.

The real estate phrase lien means one of two things: a lien against the property and a lien against a buyer. A lien against the property, also referred to as a lien on land is a debt against a property that must be paid at some point. Property liens are most common in real estate, but loans against personal property, like cars, boats, or homes can also be secured with a lien.

Here Are the Different Types of Liens:

Estate Tax Lien

An estate tax lien is a claim on the property made after someone passes away. A tax lien will prevent heirs from selling the property until the issue is resolved.

Corporate Franchise Tax Lien

A corporate franchise tax is assessed against a business based on its annual gross income. If the seller owes corporate franchise taxes (let’s say the seller had owed these taxes for the previous three years), then he will be required to pay them at closing without missing the final date of paying. This means, it would be crucial for the seller to seek the help of an experienced accountant (similar to the ones at WebTaxOnline–looking up “accountant brampton” could help locate them on the Web) who could ensure that the deadline is not missed and the procedure is followed properly.

Federal Tax Lien

A federal tax lien is a claim the Internal Revenue Service (IRS) has against your real estate property because you don’t pay income, payroll, social security, or other taxes.

Attachment Lien

Attachment liens are liens against the property because a lien holder gave the property as collateral for the loan.

Mortgage Lien

A mortgage lien is a security interest in real property. It is an encumbrance of the title to the property, allowing the lien holder to claim their security or interest in the property.

Vendor’s Lien

A vendor’s lien is a claim against the property made by a vendor that has sold it and typically grants the seller time to pay for goods and services.

IRS Tax Lien

The Internal Revenue Service (IRS) files a lien against the property when a taxpayer fails to pay debts owed to the government.

Mechanic’s Lien

A mechanic’s lien is filed when a contractor performs work on a project and the landowner pays the contractor but fails to pay his subcontractors, who then file a mechanics lien against the property.

Judgment Lien

A judgment lien is filed when a creditor files a lawsuit against an individual or business. The plaintiff wins the judgment, and the creditor then files a judgment against the debtor’s property.

The real estate “lien” is just a legal document that allows a lender to seek payment from the borrower if the borrower defaults on the loan. However, lenders generally do not make a demand for payment unless they are owed a lot of money.