Guiding New York clients through all matters regarding liens
Property owners try to avoid any legal claim to their apartment, house, commercial buildings or parcel of land. They would like to own a property “free and clear” with a “clean” title. A lien is a claim against property made by someone who needs to secure payment of a debt. In essence, if you have a lien, your property is collateral for the money you owe. If you were to sell a property with a lien, you may face buyers who will pay you much less than asking price or no buyers at all. Unfortunately, buyers are going to avoid dealing with real estate that is affected by liens if they are concerned that claimants might come out of the woodwork. Knowing the different types of liens that are muddling your title is important. If you need an attorney to represent your interests and help you relieve yourself of a lien, contact Marc Scollar, Attorney at Law.
Different types of real estate liens
There are two main categories of real estate liens:
- Voluntary liens: Created by a contract between the creditor and the debtor.
- Involuntary liens: Created by an outside party to address an outstanding debt.
The most common voluntary lien is a mortgage. The bank owns the property until the debt is paid. An involuntary lien is a different story. Some of the types of involuntary liens include:
- Tax liens
- Mechanic’s liens
- Judgment liens
A tax lien is imposed by the federal, state or local government based on back property taxes that relate to your particular parcel. If you are deficient, a tax lien can seriously impact your credit score and make it hard to sell your home.
Mechanic’s liens, also known as construction liens, are usually the result of unpaid work on your property. General contractors, subcontractors, and suppliers can file mechanic’s liens that can impact your title. Construction liens can be a result of your contractor not paying the people he or she hired for certain jobs. A subcontractor or supplier can file a construction lien against your property even though your general contractor was paid in full and you had nothing to do with the hiring of these other workers. Even though it may be the fault of your general contractor and you are going to fight them to pay the debt to relieve the lien, your property title will still have an issue that can impact you selling your home.
The least common lien against a property is called a judgment lien. Courts often issue judgments where one person is obligated to pay another. When a court order is not followed, a person doesn’t pay, and requests are made to enforce the order, the judge may issue a judgment lien against an owned property. There are many types of judgment liens resulting from:
- Criminal, civil, and family cases
- Defaulted child support payments
- Motor Vehicle Commission surcharge debts
- Certificates of indebtedness from the office of the Public Defender
- Unpaid probation fines
Selling your home and liens
A lien will greatly impact the sale of your home. It is unlikely that you will close on the sale of your house if you have a lien. A buyer will expect liens to be paid to allow for a transfer of a clean title. One of the many steps that buyers will conduct when buying property is a search for existing liens, which is a simple and easy process, potentially ruining a good deal. Though the law does not prohibit a transfer of title with a lien, most buyers will not be approved for a mortgage if the property in question has a lien against it.
Contact a Staten Island real estate law firm with property lien dispute experience
Marc Scollar, Esq. understands the undue pressure having a lien on your property has when wanting to sell a property. It is nearly impossible to attract buyers to want to even view a property with a lien. When you have a lien on your property, you need to act. If you need quality legal services, contact an experienced real estate law firm to represent your needs and clean up your title. If you need to consult with an effective and dedicated real estate attorney, contact Marc Scollar, Attorney at Law.