Liens
A recorded claim against a property, usually securing payment of a debt.
01
What It Means
A lien is a claim recorded against real property to secure an obligation. Common examples include mortgages and deeds of trust, property tax liens, mechanic's and materialman's liens, judgment liens, and homeowner association assessment liens.
Most liens must be paid, released, or otherwise resolved before clear title can transfer, and payoffs are typically handled through escrow at closing.
02
Why It Matters
Liens follow the property, not just the owner. A buyer who takes title without resolving a lien may inherit the problem.
Some liens — property taxes and certain assessments in particular — can take priority over earlier recorded interests, which affects both buyers and lenders.
03
Common Misconceptions
- "A paid-off loan is automatically cleared from title." Payoff and recorded release are separate steps; unreleased deeds of trust are a common title issue.
- "Only voluntary debts create liens." Judgments, unpaid contractors, and taxing authorities can record liens without the owner's agreement.
- "Small liens don't matter." Any unresolved lien can hold up a closing.
04
Questions to Ask
- What liens are currently recorded against the property?
- Which liens will be paid at closing, and from whose proceeds?
- Are there unreleased loans from prior owners?
- Has recent construction work been paid and lien waivers obtained?
- Are property taxes and assessments current?
05
Related Reading & Resources
The most successful real estate decisions often involve collaboration between several professionals working toward the same goal. Understanding each person's role helps you ask better questions and make more confident decisions.
06
Other Title Terms
- Title SearchThe research process that traces recorded ownership and identifies documents affecting a property's title.
- Title CommitmentThe document that sets out what the title company found and the terms on which it would insure title.
- Title InsuranceCoverage designed to protect against certain covered defects in title that existed before the policy was issued.
- Owner's PolicyThe title insurance policy that protects the buyer's ownership interest rather than the lender's loan.
- Lender's PolicyThe policy a lender requires to insure the validity and priority of its lien.
- EscrowThe neutral holding and disbursement of funds and documents according to the parties' written instructions.
Questions About the Closing Process?
Closing on a property involves many moving parts, from title research and escrow to signing documents and recording ownership. I'd be happy to help you understand the process, answer your questions, and connect you with experienced title professionals as you prepare for your transaction.
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