A property lien attaches to a home’s title and prevents the homeowner from enjoying a clear title until the debt that initiated the lien is repaid and the creditor removes the lien. Because liens attach to land, a part of property can carry a lien after being moved to a new owner. This isn’t common, however, as buyers typically prefer to buy homes with names that are clear to avoid paying the prior owner’s debts.
Significance
A property lien gives the creditor a security interest in the home. This grants the creditor that the legal right to foreclose on the house in the event the borrower fails to pay his debt off. Although a property lien can stay with a piece of property after a sale, should a homeowner try to refinance his home, he cannot do this without paying off any outstanding liens.
Types
Real estate liens fluctuate. Mortgage exemptions are property exemptions mortgage lenders set against a house before the borrower pays off his mortgage loan. Judgment exemptions are exemptions placed upon a house with a creditor, including a collection agency, after a lawsuit. Tax exemptions are liens levied by the county or IRS for unpaid taxes, and mechanic’s liens are title encumbrances put upon a house with a craftsman or laborer in lieu of payment for services rendered.
Time Frame
Mortgage exemptions do not expire and can only be removed once a homeowner pays off his loan. All other types of liens, however, expire after a predetermined period of time. Federal tax exemptions expire after ten decades, but are renewable. A judgment’s lien’s expiry is contingent on the validity of the ruling itself. When the ruling expires, so does the charge card. Mechanic’s liens perish after a relativity short period of time. In California, for instance, a mechanic’s lien is just valid for 90 days.
Considerations
Even though a homeowner could remove a lien against her property by paying the debt off that initiated the lien, she has other possibilities for removing the lien, too. If the lien is the result of a court ruling, contesting the court ruling and using it overturned will lead to the creditor being made to withdraw the lien. Additionally, the IRS enables homeowners to ask a discharge of their tax exemptions in order to transfer land. Negotiating a settlement with the IRS will also result in lien elimination.
Effects
In accordance with Texas A&M University, if the homeowner doesn’t pay the debt and the lien is still legal, a creditor may use it in order to foreclose on the individual’s house. Foreclosure terminates any exemptions that were recorded after the creditor’s lien. The creditor, however, should cover any liens that were filed before its lien. This is known as”lien “