If you are not familiar, a real estate lien is a legal claim against a piece of property used to secure payment for unpaid debts. A lien may be attached to a piece of property one of two ways: voluntarily, meaning that the property owner is using the property as collateral; or involuntarily, when a creditor obtains a judgment against the property owner and attaches that judgment to the property.
6 Types Of Real Estate Liens
There are several types of liens that may be attached to real estate in Florida. Below we discuss the most common.
- Judgment Lien: A judgment lien may be attached to any type of real estate owned by the debtor, including their personal property. A judgment lien is used to secure any amount of unpaid debt that was acquired by the holder of the judgment, generally, a creditor. Such lien may be placed on a property after a creditor files a lawsuit against the borrower. However, the court will first have to rule in favor of the creditor prior to the lien judgment being entered against the debtor. In Florida, creditors are able to affix a judgment lien to non-homestead properties owned by a debtor after they have recorded a certified copy of the judgment in any counties’ official records where the debtor owns property.
- Child Support Lien: This type of lien forces a parent, under court order, to pay outstanding child support payments. A certified copy of the court order can be recorded in any Florida county where the parent owns non-homestead property. This court order attaches to any real property and becomes a lien. In some instances, child support liens can be placed on homestead property. In this situation, it is best to receive counsel from a Florida real estate attorney.
- Mechanic’s Lien: A mechanic’s lien may be filed against real estate property in the event that a contractor, subcontractor, or supplier of materials has not received payment after doing work to the property or delivering construction materials to the site. In some instances, the property owner may have already paid the contractor for the work completed or the materials provided, but the contractor failed to pay the subcontractor or supplier. When any of these parties are not paid in a timely manner, a lien may be placed against the property owner’s real property. How aggressive the unpaid party is will determine the impact of the lien– for some, this can mean foreclosure. This is why we encourage property owners to consult with a real estate attorney to address any lien that has been attached to their property.
- Property Tax Lien: In the event that a property owner does not pay their property taxes, the city or county in which the property is located will follow the necessary procedures to collect the unpaid fees. One option is to file a tax lien against the property. This type of lien is considered a first position lien for unpaid taxes and is enforceable against the property.
- IRS Federal Tax Lien: When people fail to pay their tax debts, the US government can file a lien against any property owned by the person. When this happens, the federal government will send the taxpayer a bill informing them of how much they owe. Should the property owner prolong payment, the IRS has the right to file a Notice of Tax Lien. The Notice is then recorded in the county records in which the debtor owns property to make other parties aware of the federal tax lien. An IRS Federal Tax Lien assumes priority over any mortgage that could try to obtain the property meaning the house cannot be bought or sold until the debt is settled.
- Homeowner’s or Condominium Association Lien: Homeowners and Condominium Associations are governed by a declaration which allow such associations to levy liens against any property that falls under the bounds of the declaration and also enables the given association to file a lien against the property should the dues or, in some instances, fines, not be paid in a timely manner.
As A Property Owner, What Should You Do If You Have A Lien Against You?
We encourage property owners who have a lien placed against them to contact a Florida real estate attorney for advice on what can be done. You should be aware that failing to pay the lien could result in foreclosure and any proceeds recouped from the sale during a foreclosure will be used to settle the lien.
Can I Sell My Home When A Lien Has Been Attached To It?
Yes. Tax liens cannot keep you from selling your home as long as you take the appropriate steps to address said lien. It can, however, complicate and prolong the process, as you will more than likely be obligated to pay off your outstanding balances prior to the sale. In some cases, property owners are able to use the proceeds from the sale of the property to pay their liens. To make the process go as smoothly as possible, obtain a Florida real estate attorney. They will help guide you through the process and ensure that your liens are properly dealt with.
Estevez Law Group Can Help With All Types of Liens
When buying or selling a property that involves a lien, invest in an experienced Florida real estate attorney, like our team at Estevez Law Group. We help our clients ensure that the process goes smoothly and that the liens are properly settled.
> Learn More
About Estevez Law Group, P.A.
Helping clients with real estate, commercial real estate transactions, residential property purchases and sales, estate planning, and more! Skillful legal representation can simplify complex real estate transactions and solve problems that frustrate all parties involved. At the Estevez Law Group, P.A. our boutique real estate law firm and title agency assists clients with all types of residential and commercial property matters.
> Learn More