What should I know about real estate liens?

What should I know about real estate liens?

A lien is a legal claim against a property made by a party to secure a debt. Property owners would like to have a title that is “clean” of claims. Simply put, if you have a lien against your property, it is being used as collateral for money that is owed. If you were to try and sell a property with a lien, you may be faced with major complications. Most buyers avoid dealing with real estate that is impacted by liens. If your property has a lien, it is important to consult with an experienced real estate attorney who can effectively defend your rights and help you mend the issue.

Real Estate Liens: Voluntary and Involuntary

Basically, there are two main categories of real estate liens. A voluntary lien is a contract between a creditor and a debtor. We see this type of lien in mortgages. The lender owns the property until the debt is paid. The other type of lien is involuntary. This is when an outside party holds a property as collateral for an outstanding debt. Some of the liens that fall under this category include tax liens, mechanic’s liens, and judgment liens.

Tax Liens

A tax lien is usually imposed to collect back taxes. It can include property taxes, income taxes, or other taxes that are deemed delinquent. This lien is imposed by the government and can impact your credit score and make it very hard to sell your home. If you face a tax lien, you should contact an experienced real estate attorney.

Can I sell my home with a lien?

An involuntary lien will have a major impact on your ability to sell your home. Many buyers expect that the title will be clean before the transfer. One of the many steps of a real estate transaction is a search of existing liens. If one comes up for your property, it could ruin a good situation. Though there is no law against buying a property with a lien, buyers may avoid working with you and, in some cases, mortgages can be denied.

Zimmet Law Group, P.C. is an experienced team of attorneys guiding clients through matters of estate planning and administration, divorce and family law, real estate, commercial litigation, business law, bankruptcy, and landlord-tenant law. If you require the services of an effective New York City attorney, contact our firm today to schedule a consultation.

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