A lien is a legal claim or charge on a piece of property, such as real estate, a vehicle, or personal property, as security for the payment of a debt or obligation. Liens are typically used to secure a loan or credit, and allow the lender to seize the property if the borrower defaults on the loan or credit obligation.
There are several types of liens, including:
- Mortgage liens: A mortgage lien is a legal claim on a property that secures a mortgage loan. If the borrower defaults on the loan, the lender can foreclose on the property and sell it to recover the unpaid debt.
- Mechanics’ liens: A mechanics’ lien is a legal claim on a property by contractors, subcontractors, or suppliers who have provided materials or labor for improvements to the property but have not been paid.
- Tax liens: A tax lien is a legal claim on a property by a government agency to secure payment of unpaid taxes.
- Judgment liens: A judgment lien is a legal claim on a property by a creditor to secure payment of a judgment awarded by a court in a lawsuit.
It is important for property owners to be aware of any liens on their property, as they may impact the ability to sell or borrow against the property. Property owners may also be required to pay off any outstanding liens before they can sell or transfer ownership of the property.
