Property liens are big business. The value of property liens for 2018 is estimated at $37,260,723. $18 million of the overall value are expected to be sold.
Property liens are becoming an investment in and of themselves. Investors are turning away from the volatility of the stock market in favor of more stable investments. Property tax liens are one avenue savvy investors are investigating.
Property liens aren’t usually good news for people to receive them, however.
Here’s what you need to know about property liens and how to avoid them.
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Property Liens: What You Need To Know
If you’re wondering “What is a property lien?”, let’s start by defining our terminology.
What Is A Lien?
The definition of a property lien is a legal claim is made against a property, usually to satisfy a debt. This can happen in a number of ways.
The most common is when someone defaults on their loan payments. A loan provider usually needs some sort of collateral to issue a loan. The loan provider often becomes a lien holder, in the instance that someone defaults on their loan payments.
How A Lien Can Affect Your Property
To sell a property you must have a clear license to sell. A property lien calls that license into question.
More often than not, you can’t sell a property when it’s under lien. You have to pay it off or settle to be able to sell your property.
How To Clear A Property Lien
There are four main ways to clear a property lien. The first, and most obvious, is to pay it off.
The second way to remove a property lien is to settle with the lienholder. Creditors are often willing to settle for less than the complete amount owed to recoup some of their investment.
The third method to get rid of a property lien is to get it corrected. If a lien has been filed in error, and you can prove it, you can file to have it corrected.
One example of when an incorrect lien filing might be if a previous property owner faced a lien and the sale was never recorded. This can be corrected relatively easily. You just need to prove the change of ownership, usually with a bill of sales.
The final method is to dispute a lien. If a lien has been filed incorrectly, or there is a discrepancy over the terms, you can dispute the lien. This is the most difficult way to get rid of a property lien, however, and often involves a legal battle.
If you want to learn more about property liens, you can see more about it over here.
Like anything to do with real estate law, property liens are a vast and complicated topic. These basics will get you started but remember to consult with a local real estate expert if you’re facing a lien!
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