How To Find Out If a Property Has a Lien
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Just because you’ve owned a house for a long time doesn’t mean you know everything about it. Homeowners are not always notified when liens are placed on their property, so it’s entirely possible that there is a lien attached to your home that you aren’t aware of. Rather than being surprised when it comes time to sell, you should research whether there are any liens on your property—and if so, figure out how to get rid of them.
What is a property lien?
A property lien is a legal notice attached to a property indicating the presence of outstanding debt. It’s a way for the creditor who is owed money, known as the lienor, to guarantee that they will either get their money back or gain the right to claim the property for themselves.
Liens come in two varieties: voluntary and involuntary. A voluntary lien comes from a loan that a person willingly chooses to take out, such as a mortgage. An involuntary lien, conversely, is placed by a third party as a penalty for the property owner not making certain payments on time.
What type of property liens are there? Who can put a lien on your house?
Property liens come in multiple varieties and can be imposed by several different entities. Some of the most common liens placed on a home are:
- Mortgage: Unlike most other liens, a mortgage is no cause for concern. Simply stay up to date on your payments, and the lien will go away as soon as your mortgage and interest are fully paid off. Home equity loans, HELOCs, and reverse mortgages are also considered liens.
- FHA and HUD liens: FHA and HUD loans function similarly to traditional mortgages and are also liens. As with any other mortgage, FHA and HUD liens go away when your home loan is paid off in full.
- Tax lien: If you fail to pay property taxes or federal taxes, the government can place a tax lien on your home to ensure it gets what is owed.
- Mechanic’s lien: If a contractor, subcontractor, supplier, or design professional who worked on a home project was not paid for their labor, they can place a mechanic’s lien on the property to demand payment.
- Child support lien: If one parent neglects to pay child support, the other parent can place a child support lien on their property as compensation for the missed payments.
- HOA lien: Most homeowners associations have mandatory monthly dues. Delinquency on these payments can result in the association placing an HOA lien on your property.
- Judgment lien: A judgment lien arises when a creditor seeks legal action against a homeowner who hasn’t adhered to the terms of their loan contract. If the creditor wins the case, they have the right to place a lien on the homeowner’s property.
Can money owed for medical bills be placed as a lien on a house?
Any type of debt can result in a lien being placed on the debt holder’s home. Unfortunately, that includes medical debt. If you don’t pay off medical bills in a timely manner, the hospital can place a lien on your house to make sure it gets the money owed.
Can student loans put a lien on your house?
Just like with any other loan, student loan payments need to be made on schedule, or else you risk consequences. Although liens resulting from student debt are not common, the government does have the right to file a lawsuit demanding your home as compensation if you default on your student loan payments.
How do you find out if there is a lien on your property?
There are multiple online databases that allow you to search properties for liens but be aware that many third party sites require users to pay a search fee. If possible, it’s usually best to use your county clerk’s website. Many county clerk pages have a section dedicated to property records, and searching there may help in checking for liens.
For example, if you live in Harris County, clicking “Real Property” under the “Property Records” bar at the top of the county clerk site will lead you to this page, which allows you to search your home for various records, including any liens recorded with the county.
A table with links to all the Texas county clerk websites is below.
Does a lien have to be recorded with the county to be valid?
The legalities of recording a lien may vary from one state to another. In Texas, a lien is still valid even if it is not recorded with the county. That means it is possible that a lien won’t show up in a public record search but will show up in a title search.
How long does a lien stay on a house?
The lifespan of a property lien depends on the state in which the property is located and the type of lien. Most liens come with a statute of limitations, after which it will expire if the lienor does not renew it. Judgment liens and federal tax liens have very long statutes of limitation—it takes ten years for both to expire in Texas, and these liens will stay attached to the property even after a change in ownership.
A mortgage lien, on the other hand, does not expire. The only way to get rid of the lien is to pay the loan off completely, either by making all of your payments or by selling the home to pay off the remaining balance owed.
What happens if you inherit a house with a lien?
Liens only disappear if they expire or the homeowner takes action to have them removed. Selling or transferring a property does not get rid of any liens on it. Because property liens are attached to homes and not people, a lien will still remain even if the homeowner passes away. That means that if you inherit a house with a lien, the lien becomes your responsibility to deal with.
Can you sell a house with a lien on it?
Selling a home with a lien is possible, but it comes with a unique set of challenges. Buyers are unlikely to show interest in a property with this sort of baggage, and the few who do will probably ask you to make some compromises as a seller.
If you can’t find a buyer who will take the house as is, you’ll need to use the profits from the sale to satisfy the lien.
If possible, it’s best to use your equity in your home to pay off the lien prior to selling.
Can you transfer property with a lien on it?
If you wish to give your home to a relative or friend as a gift, this is possible even if the property has a lien. Of course, the new homeowner must be made aware of the lien before the property is transferred over, as it will now become their responsibility.
Can you refinance the mortgage on a house with a lien on it?
If the lien on your property is involuntary, refinancing will be close to impossible. Mortgage lenders view involuntary liens as major red flags, and they will almost never agree to lend to a homeowner with a lien on their property. If you want to refinance, you will need to get rid of any liens other than your initial mortgage first.
Can you fight a lien from being placed on your property?
In some cases, a lienor does not follow the legal process to file for a lien correctly. This renders the lien invalid.
If you have documents indicating that a lien on your property was not filed properly, you can send your evidence to the lienor and request that they release the lien. If they deny your request, you can take them to court, but bear in mind that filing a lawsuit can be expensive, and there’s always a chance that you will lose your case.
How do you get a lien off your house?
There are multiple methods you can employ to remove a lien from your property, but the simplest and most effective way to get rid of a lien is to pay it off. You can either pay out of pocket, tap into your home’s equity, or sell the home and use the profit to pay the balance. Some lienors may even provide the option of a payment plan where you pay the debt off bit by bit.
Other options for removing liens include negotiating with the lienor, contesting the lien in court, waiting for the lien to expire, and filing for bankruptcy. Be aware, however, that these methods are not always successful and don’t work for every type of lien.
What is an expired judgment lien, and can you get it removed?
In Texas, a judgment lien will expire after ten years if the lienor does not renew it. However, just because a lien has expired doesn’t mean that the lienor will automatically release it.
If the lien on your property is no longer valid, double check to make sure that it has actually been removed. If it is still on title, you will need to contact your lienor to ask them to release it, as they are legally required to do.
What is a partial release of lien?
A partial release of lien is an arrangement between a homeowner and a lienor in which the lienor removes part of a lien. This type of agreement typically occurs when the homeowner pays off the lien in installments and the lienor subtracts the amount that has already been paid from the balance of the lien.
In some cases, a partial release of lien simply means lowering the amount owed on the lien. In a partial release of mortgage, the lien is removed from part of the property itself, enabling the owner to sell some of their land or have a utility company work on their property.
Does a lien on property affect your credit?
Some involuntary liens, such as judgment liens and mechanic’s liens, can negatively impact your credit. If a lienor chooses to report a lien, it can stay on your credit report for as long as seven years.
Fortunately, not all liens harm your credit. A voluntary lien may cause your credit score to drop when you first take out the loan, but as long as you make your payments on time, there will be no lasting damage to your credit. In fact, your credit score will likely improve in the long run.
What to do when a lien is filed against you?
If you discover an involuntary lien on your property, don’t panic. Reach out to your lienor and ask if they have any suggestions for how you can pay off the debt. Many creditors would much rather have your money than your home, and they may be willing to make accommodations like payment plans to ensure that they get paid as soon as possible.