How Does a Property Lien Work

The word lien, in law, means a right over a property, exercised to recover a debt. Hence, the legal right to possess a property in order to satisfy a debt is known as a property lien. While a lien can be granted over any property, including vehicles, usually more valuable properties like land and houses are placed under it. For better understanding, you can consider how a mortgage works, since it is also a lien, albeit a consensual one. A mortgage places an obligation on the owner of a property, and if he or she fails to fulfill that obligation, the property can be sized to compensate for it.

However, compared to a mortgage (which is a consensual lien); a non-consensual lien can make it harder for the owner to sell a property until it is free of all charges and obligations. A lien is more of a way to force a person to make interest payments or repay outstanding debts. Liens can arise in different ways and due to several reasons, which will be explained in this article.

Consensual Liens

Consensual liens form one of the broader types of liens. Such a lien is voluntary, which means the owner of a property willingly enters an arrangement in which another party gets a right over his/her property. A mortgage for instance, as explained above, is a consensual lien, just like a car loan. The lender, in both these cases, gives money to the borrower, who is expected to repay it with certain terms and conditions. If the borrower is unable to meet those terms, the lender has the right to force them, by repossessing the car or the house. Moreover, laborers and mechanics also have the right to be paid for their services for your property, and can put it under a lien if they are not.

Non-Consensual Liens

Apart from consensual liens, there are obviously the non-consensual ones. Such liens are not on account of willingly entered contracts, and one of the major examples of such a lien is a tax lien, which arises due to non-payment of tax on a property. Non-consensual liens are usually related to real estate, which is taxed considerably, and are aimed to force the owner to make payments he/she owes. However, failing to satisfy legal judgments can also impose a lien, which has to be satisfied by paying the related legal fees.