What Are Involuntary Property Liens?

Real estate liens fall into two categories: voluntary and involuntary.

A voluntary lien is simply another name for a mortgage. This lien is placed "voluntarily" by the property owner, as security to get a mortgage.

Involuntary liens are typically those associated with searching for property liens. Tax liens, mechanics liens, and judgment liens, amongst others, are liens placed on a property against the will of the property owner, or "involuntarily". These are an important type of lien to search. When ordering a title search, be sure to check which type of liens are being searched.

Types of Involuntary Liens:

1. Tax Liens:

   • Property Tax Lien: Imposed by the government when a property owner fails to pay property taxes. The government can eventually force the sale of the property to recover the unpaid taxes.
   • Federal Tax Lien: Placed by the Internal Revenue Service (IRS) or another tax authority when a property owner fails to pay income taxes. This lien attaches to all assets of the taxpayer, including real estate.

2. Mechanic's Liens:

   • Placed by contractors, subcontractors, or suppliers who have provided labor or materials for property improvements but have not been paid. The lien ensures that the workers or suppliers have a claim to the property if the debt remains unpaid.

3. Judgment Liens:

   • Result from a court ruling against a property owner in a lawsuit. If the property owner owes money as part of the judgment and does not pay, the creditor can place a lien on the owner's property to secure payment.

4. HOA Liens:

   • Imposed by a homeowners' association (HOA) when a property owner fails to pay HOA dues or fees. The lien allows the HOA to claim the property to recover the unpaid amounts.

5. Child Support Liens:

   • Placed on a property when the owner fails to pay court-ordered child support. The lien gives the custodial parent or the state the right to claim the property to satisfy the unpaid support.

6. Municipal Liens:

   • Arise when a property owner fails to pay municipal charges, such as water or sewer bills. The municipality can place a lien on the property to recover the debt.

Characteristics of Involuntary Liens:

• Without Consent:

  The key characteristic of an involuntary lien is that it is placed on the property without the property owner's agreement. It is usually the result of a legal action or unpaid debt.

• Priority:

  Involuntary liens typically take precedence over voluntary liens (like mortgages), depending on when they were filed. This priority affects which creditors get paid first if the property is sold.

• Cloud on Title:

  An involuntary lien creates a "cloud" on the property's title, making it difficult to sell or refinance the property until the lien is satisfied or removed.

• Enforcement:

  If the debt remains unpaid, the lienholder may be able to force the sale of the property (foreclosure) to recover the amount owed.

How Involuntary Liens Are Removed:

1. Payment of Debt:

   The most straightforward way to remove an involuntary lien is to pay off the debt in full. Once the debt is paid, the lienholder is required to release the lien.

2. Negotiation:

   Sometimes, the property owner can negotiate with the lienholder to reduce the amount owed or establish a payment plan, which might lead to the lien being lifted.

3. Lien Release:

   After the debt is satisfied, the lienholder should file a lien release with the appropriate government office to officially remove the lien from the property records.

4. Legal Action:

   If the lien is improperly placed or the debt is disputed, the property owner may need to take legal action to challenge the lien in court.