Video Transcript:
Hello, this is Dave at TitleSearch.com. In this video, we're going to talk about judgments and liens and what the differences are between a judgment and a lien. Now, we'll start out with a judgment. That's usually where all this originates. A judgment is technically any type of court ruling for or against a person. There could be a divorce judgment, it could be even a criminal judgment of guilty or not guilty. In the context of real estate and liens, a judgment is usually a financial award to a person against another person saying that, "Look, you owe this person money, you didn't pay it." So the court is going to award a judgment of that money to the person. Once that legal judgment is enacted, it can attach or be listed as a lien on a property. The difference is a lien recording will be specific to a property or specific to some group of assets. A judgment can simply be, I lost a small claims lawsuit to in court. For example, if I'm walking my dog down the street, my dog bites you, you sue me for a couple of thousand bucks in small claims court. You now have a judgment against me. I don't have to own any property for that to happen. I don't have to have a lien against any type of real estate because I may not own real estate. In this context. But once a judgment is enacted, it can now become a lien against property that I may own or may own in the future. A judgment is non-property-specific. It's only listed by names. It's not listed by any property. Now, in In some instances, that judgment may automatically become a lien if it's recorded in the civil court records of a county where the debtor owns property. It's probably going to be in a different recording location. If you're just looking at liens in land records, you may not find judgments. If you're just looking at property records, deeds, mortgages, that type of thing, the judgments in civil court may not show up there. You want to make sure, if those are important, that those are something that are part of a title search that you're getting -if you need to know about judgments which attach to a property because they're in a different location. Judgments that becomes a lien automatically attaches by statute, not by direct recording. Because of that, keep in mind that if my name was John Jones and I lived in a certain county and there was a judgment against me, anybody with the name John Jones who has property, you may not know which of those particular John Jones a judgment goes to. There may not be enough information on that judgment document to know that. A title search that's looking for that will cast a wide net, will show up every judgment that may possibly affect that property, and then try to narrow it down from there, which ones of those are actually the same judgment debtor that's being reflected on that judgment paperwork. If you don't do a title search correctly or if the scope doesn't include it, it's possible that a judgment against the person might be missed, even though it technically attaches property by statute. Remember, a judgment is something which may be constructive notice rather than actual notice because it's not in the land records. You may find clues in the land records. You may find other names of co-owners or co-borrowers on a mortgage which may also have judgments that attach to the property. A really good example of a judgment and lien scenario is what is known as an IRS tax lien. When the IRS determines that you as a taxpayer haven't paid your fair share of income tax, they will file a tax lien -an IRS tax lien in the county where you live -even if you don't own property. Now, technically, that's really just a judgment. It's saying you of all money. But the blanket language on that document makes it a lien on any property you own in that county, any real estate, anything that's recorded in that county. An IRS tax lien is simply a really advanced form of a judgment. In reality, they may both have the same effect, but it's important to understand the difference; why a lien and a judgment are two different things, but how they may affect property in a similar way. If you have more questions, you can reach us on our website, title search dot com, and we'd be glad to help.