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5 min read Aug 31, 2023

What is a Lien: How They Work, Types, and Ways to Remove Them

A lien is a legal right that a lender has over a borrower’s assets till he repays the debt. Liens are attached to a property, vehicle, equipment, or any personal asset. In this blog, our focus will be on property liens.

When a debt is undertaken, a lien is placed on the borrower’s property, which remains till the debt is settled. Let us understand how property lien works, and ways to remove it.

⚡ Key Takeaways

  • Property Lien Definition: A lien is a legal claim that allows creditors to seize property of a borrrower if debt isn’t repaid.
  • Common Types of Property Liens: The most common types of liens in real estate include mortgage liens, tax liens, HOA liens, and mechanic’s liens.
  • Property Lien Removal: You can remove liens through debt repayment, negotiation of settlements, or dispute its legitimacy in court.

How Do Property Liens Work?

A lien legally protects the lender’s investment. It gives the lender the right to seize the property if the borrower defaults.

Lien holders can force the sale of the property to recoup their losses. A property can have multiple liens, depending on the number of debts.

However, liens come into action only when you default on your monthly mortgage payments. There are two ways, in which liens come into force, voluntary and involuntary.


When you get a mortgage, you agree to a voluntary lien. This means that the lender has the right to seize your property if you don’t pay back the loan. You remove the lien after paying the debt in full.

Voluntary liens do not adversely affect your credit as long as repayment terms are satisfied.


By contrast, involuntary liens are third-party claims on your property. In this case, the lender goes to the court when you fail to repay their debt. The court places involuntary liens on your property without your consent.

Involuntary liens have a negative impact on your credit score and report, they impact your ability to obtain future finances. Involuntary liens get eliminated once you repay the lender.

Types of Property Liens

Based on the circumstances and the nature of the debt, various types of liens can be attached to your property. Here are some common types of property liens:

  • Mortgage Lien: This lien is attached when a borrower takes out a mortgage to buy a property. The lender puts a mortgage lien on the property as collateral until the loan is fully repaid.
  • Tax Lien: The government imposes a tax lien when a taxpayer fails to pay federal, or state taxes. It gives the government a legal claim on the taxpayer’s property as security for unpaid taxes.
  • Mechanic / Contractor’s Lien: Contractors or suppliers who have contributed labor or materials to a construction project without receiving payment file this type of lien. It enables them to assert a stake in the property where they conducted the work.
  • HOA Lien: Homeowners’ Associations (HOAs) can place a lien on a property if the homeowner fails to pay their HOA fees. The HOA lien allows them to recover the unpaid dues by foreclosing on the property.

Each type of lien has different legal implications. Hence, we advise you to consult with a legal professional to understand the specific laws applicable to your situation.

How to Remove A Lien on Your Property?

Here are the ways to remove a lien:

  1. Pay Back Your Debt: The most common way to remove a lien is by paying off the debt or fulfilling the financial obligation owed to the lienholder. Once you have completely repaid the debt, request a release or satisfaction document from the lienholder.
  2. Negotiate Debt Settlement With Your Lender: Debt settlement is a process where you pay a one-time amount to remove the lien. The settlement amount is usually less than the total amount you owe.
  3. Dispute the Lien: You can seek the court’s assistance by disputing the lien’s legitimacy. If the lienholder fails, the judge might dismiss the lien. Seek guidance from a real estate attorney to understand the legal process of removing a lien.

How to Conduct a Lien Search Using Property Address?

One can use the online platforms of the county recorder, clerk, or assessor’s office to perform an address-based lien search.

Although the lien search is free, you may have to pay a small fee to obtain the report copy.

Additionally, lenders order a title search to find out liens on a property before approval. If the property has any active liens, the lender will not approve the mortgage.

Bottom Line

Liens are a part and parcel of your loan agreement. If you consistently make your monthly payments, your lien is unlikely to impact your life.

Nonetheless, liens endanger your financial well-being. Even if lien holders opt against foreclosure, these liens can hinder your ability to sell your house or refinance your mortgage.

So pay your monthly payments consistently to avoid the drastic implications of liens. Be aware of the legal attributes of the lien. Thoroughly, read the terms and conditions of your loan papers, and consult a professional if required.

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1. Can I sell my house if there’s a lien on it?

Yes, it is possible to sell a house that has a lien on it. Selling a lien house typically involves paying off the debt or negotiating with the lien holder to release or satisfy the lien.

2. What Is a lien waiver?

A lien waiver is a written agreement between a lender and a borrower, where the lender gives up their right to place a lien on the borrower's property.

3. What is a lien search?

A lien search refers to the investigation and subsequent report made on a property. Its main goal is to disclose liens on property.

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