A Guide to Understanding Texas Real Estate Liens
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A lien is a notice attached to your property stating that a creditor claims you owe them money. A lien is typically a public record, and for real estate liens, they are filed with the county records office. When the property is sold, refinanced, or foreclosed, the lien assures that proceeds will be used to pay back the creditor. If multiple liens exist, they are paid back according to each lien’s superiority.
Disclaimer – The information on this page is intended for general informational purposes only and not to provide legal advice.
Can you sell a house with a lien on it?
Yes, you can sell a house that has a lien on it. However, if there is a lien on your property, it does make the selling process a bit more complicated. Learn everything you need to know about real property liens and what to expect if you’d like to sell your home that has lien attached to it.
Who can put liens on houses and what kinds of claims can be placed on a property?
So, what are the different types of property liens in Texas? For a creditor to attach a lien to your property, they must have lien rights by law, or they must first obtain a court judgment to get the lien. Below are the different types of liens that can be placed on your property.
- Mortgage – A mortgage lien is a claim to the property if you don’t pay back your mortgage in full. Once your mortgage and interest is completely paid off, the lien goes away, and you own your home free and clear.
- Home Equity Loans/HELOCs – Home equity loans and home equity lines of credit (HELOCs) are typical examples of second mortgages. The term “second” means that if you can no longer pay your mortgages and your home is sold to pay off the debts, this loan is paid off second, making it a “junior lien.”
- Reverse Mortgages – Reverse mortgages are loans or lines of credit lenders give based on the equity you have in your home. These lenders demand a top position for lien superiority.
- HOA Liens – Homeowners’ Associations (HOAs) can place a lien on the property if the owner becomes delinquent in paying the monthly fees or assessments.
- Property Tax Liens – This is a legal claim against a property for unpaid property taxes.
- Federal Tax or IRS Liens – A federal tax lien is the U.S. government’s legal claim against your property when you don’t pay a tax debt.
- Child Support Liens – Under Texas law, it’s possible to obtain a lien for unpaid child support. Texas also actively enforces child support liens that have originated in other states.
- Medicaid Liens – This is a lien placed on a property for recovering Medicaid costs during a person’s lifetime. When their property is sold, either before or after their death, the state of Texas may collect its Medicaid repayment, but certain restrictions apply.
- Weed Cutting Liens – Many local jurisdictions in Texas and around the country have laws in place that can carry steep fines or worse – a lien – for homeowners who fail to keep up the maintenance of their lawn.
- Mechanics Liens – Also called construction liens, these are filed by contractors, subcontractors, or suppliers that never received payment for work they performed or materials they provided on the property.
- Judgment Liens – This is a court ruling that gives a creditor the right to take possession of a debtor’s real property if the debtor fails to fulfill their contractual obligations.
- Owelty of Partition – This typically takes place with a divorce when spouses, as co-owners, use the equity they have in the home to assist in dividing up their property. One spouse may “buy out” the other’s interest in the property, and the owelty lien – money owed to the spouse being bought out – must be recorded.
How does a lien get placed on a property in Texas?
In Texas, it’s relatively easy to get a lien attached to a non-exempt property the debtor owns or may purchase in the county of filing. One needs a certified copy of the judgment from the court it was issued, and record the judgment at the tax accessor’s office in the county where the debtor owns property or may own property in the future. If the debtor owns multiple properties in different counties, then it must be recorded at each county’s recording office.
Can a family member put a lien on my house?
No, because In Texas, certain liens may not be attached to someone’s homestead property. That includes personal loans to family and friends. Therefore, if you borrowed money from a family member, they cannot put a lien on your primary home to collect that debt.
Can credit card companies put a lien on your house?
No, credit card companies have no legal right to place a lien on your home for credit card debt.
Does my home being homesteaded prevent people from putting liens on it?
Texas has a homestead exemption, which means creditors can still place liens on a debtor’s primary real estate, but they cannot seize the property. However, having a lien on your homestead still clouds the title.
How do I know if I have any liens on my property, or how can I check for liens on a house I may want to buy?
If you ever had a court judgment against you, failed to pay the balance for work done on your home, such as building a pool, there is a possibility that you could have a lien on your home. You can check public records online for Harris, Fort Bend, and Waller counties.
A reputable title company can check for liens on a property, as well. As a buyer, you should be using a title company to research liens, ensure they’re satisfied, and issue title insurance to protect yourself, in case something was missed.
What if I don’t have the money to pay a lien before selling the home?
When you do sell your home, you can pay the lien from the sale proceeds at the closing.
What if I don’t have enough equity in the home to cover the lien?
You may be able to negotiate with the lien holder for them to release the lien with a partial payoff. For most creditors, partial payment is undoubtedly better than no payment.
It’s essential to be honest and upfront about any liens on your property when selling, especially if you’re on a time crunch to sell. Title companies will find all liens associated with the property when they run a title search. Laying it all out on the table early on provides more time to resolve the liens so the home can be sold promptly.
What is a release of lien?
When a person pays off a debt in full, the lien is removed, and the creditor no longer has a claim on the property.
Do liens expire?
It depends on the type of lien. Judgment liens in Texas expire after ten years, as do federal tax liens, and both stay attached to the property even it if changes owners. A mortgage lien remains valid on a property until the debt is paid in full. Also, many liens may be renewed before they expire.
Can you sell a house with a lien on it on the MLS?
Yes, but you’ll need to be able to satisfy the lien before closing. You may be able to negotiate a lower payoff, depending on the type of lien. AMI can help you find out if there are any liens on your property, and which liens might be negotiable. We can also help you formulate a plan to get your home sold.
Can a lien be placed on a property in a trust?
Real estate placed in a living trust is not protected from a lien placed against a beneficiary of that trust. However, the trustee is not obliged to make a premature distribution of assets to the heir to satisfy a judgment lien. Also, a creditor can only attach a lien against the beneficiary’s interest in the trust.
Can a lien be placed on a jointly owned property?
Texas is a community property state, so any property acquired during the marriage – except if it was a gift or inheritance – belongs to both spouses, regardless of whether the property is titled jointly or separately. Living in a community property state also means that you and your spouse share liability on debts, even if only one spouse is legally responsible for that debt. Therefore, a creditor may be able to file a lien against a property that is jointly owned. If you own real estate titled solely in your name, your spouse’s judgment creditor may still be able to file a lien on that property.
Can a tenant put a lien on a property?
If a tenant did work on your property, they might be able to get a court order under certain conditions, allowing them to put a lien on your property.
There is a lien on my house that is not mine. What do I do?
Liens by their very definition, attach to the property itself, regardless of whom the owner is. The best course of action in trying to remove a lien from your house, whether it is valid or not, is to work with a real estate attorney.
How can I perform a property lien search in Texas?
You can search Texas real estate records online through many county clerk websites in the county where the property is located, or through third party sites that contain these records – but which may require a search fee.
I have liens on my property and need to sell it. Now what?
If you’re not on a time crunch, you can list your home on the traditional real estate market through the Multiple Listing Service (MLS). The Roots & Wings Realty Group has had great success in working with homeowners who have liens on their properties.
If you need to sell your home fast, contact AMI today to find out how we can help you liquidate your property quickly – even if it has liens against it. We can make you a cash offer on your property and typically close in less than seven business days, and cover all closing costs. Fill out this form to receive a no-obligation cash offer, regardless of what condition it’s in or what situation you are currently facing.