A lien is where one party retains the lawful possession of the property of another for the payment of a debt. This usually occurs when the property owner has missed one or more payments. The lien basically allows the creditor to obtain possession of the property if the debtor cannot make payments for a loan.
Liens are legal documents that are enforceable in court and accessible in public records. The right to place a lien on another person’s property usually arises by operation of law, though in some cases the right is created by express contract. Having a lien on one’s property generally has a negative effect on the marketability of the property.
A common form of lien is a mortgage, which can be levied against the property owner if they fail to make payments. Thus, the property becomes “burdened” or subject to the lien. Other types of liens include:
Yes, there are some circumstances where a lien can be discharged, or removed from the title. If the lien is discharged, the title and the county records will no longer state that there is an encumbrance on the property title. This will serve to restore the marketable title, making the property once again favorable for sale or purchase.
Thus, there are several possible ways that a lien can be discharged. In addition to the types of discharge mentioned above, a lien might also be discharged by operation of law or by order from a judge. This may be the case if the debtor has committed a violation of law in connection with the lien (i.e., fraud or coercion)
In any case, the most important part of discharging a lien is to ensure that the property owner obtains a written confirmation of the discharge. The document should be signed and dated by the party who initially imposed the lien on the property. Preferably, an attorney should draft this document, since it has legal significance and may be used as evidence in court should a dispute arise.
Last Modified: 05-08-2013 11:27 AM PDTLaw Library Disclaimer
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