A hold or assert that one person has on the property of another to procure payment of a debt or other obligation is referred to as a lien. Common examples are property tax liens, mechanic's liens, judgment liens and mortgage liens. From the standpoint of the property owner, a lien is an encumbrance on a title.
Property Tax Lien
Property tax liens result from the right of government to collect taxes from property owners. At the beginning of each tax year, a tax lien is put on taxable property. It is removed when the property taxes have been paid. If they are not paid, the lien gives the government the right to force the sale of the property in order to collect the outstanding taxes.
Strata of Liens
Liens don’t transfer title to land. In most states, the debtor retains title unless the lien is foreclosed. Whenever there’s more than 1 lien against a property, the lien that was listed first usually has the maximum priority in the event of foreclosure (exceptions to this rule are Attorney 's liens, property tax liens and subordination agreements). Property tax liens are almost always superior to other liens.
Voluntary and Involuntary Liens
A voluntary lien is a lien created by the property owner. A mortgage lien is a good illustration of a lien; the owner willingly creates a lien against land in order to borrow cash. An involuntary lien is created by operation of law. Cases are land tax liens, judgment liens and mechanic's liens.
The party holding the lien is known as the lienor. Cases of lienors are mortgage creditors, judgment holders and tax authorities. The party whose land is subject to the lien is referred to as a lienee. The terms lienor and lienee apply whether the lien is either voluntary or involuntary, general or specific.
Particular and General Liens
A unique lien is a lien on a specific property. A property tax lien is a unique lien since it is a lien against a specific property and no other. Thus, if a person owns five parcels of land scattered during a specified county and neglects to pay the taxes on one of these parcels, the county can induce the sale of only that 1 parcel; others cannot be touched. Mortgages and mechanics's liens will also be particular liens in that they apply to just the property receiving the materials or labour. In contrast, a general lien is a lien on all of the property of a person in a specific jurisdiction. By way of instance, a judgment is a lien on all of the debtor's land in the county or counties where the judgment has been filed. Federal and state tax liens are also general liens.