Question 1

What Happens if You Buy a House with a Lien on it?

Accepted Answer

You become responsible for the property lien. Property liens are tied to properties, not people, meaning they can be transferred via sales.

This is unlikely to happen unless you buy the home at auction after a foreclosure or are an experienced and serious investor who knowingly took on a lien for other reasons.

You can always check a property for liens in advance with the county recorder’s office or the title company.

If you’re a commercial home buyer, it’s best to avoid properties with liens as they can only add to your complications and slow down the closing process.

Question 2

How to Get a Lien Off Your House?

Accepted Answer

Pay the lien-holder off or dispute the lien. You can also contact the debtor directly to negotiate a solution. For example, some creditors may be willing to drop property liens if you agree to a payment plan.

If you have an IRS Tax Lien, you can apply to have it removed from the property by filling out this form from the IRS’ website.

Generally, the IRS will only consider this if you have some other means for them to collect on the debt like another valuable property or asset.

Question 3

How Much Does It Cost to Remove a Lien on a Property?

Accepted Answer

This depends on the lien amount. In general, it should not cost more than the amount of the debt covered by the lien.

If you are more than five years delinquent on your taxes and not enrolled on a payment plan, the state of California may auction your lien to investors at an annual property tax deed auction.

In this case, you could owe additional fees and interest to investors who now own your lien.

Question 4

Can You Transfer a Property with a Lien?

Accepted Answer

You can only if the buyer agrees to it. This is an unlikely circumstance, especially if you're selling a home to normal retail buyers who will not want to deal with properties that have liens on them.

However, if a buyer is willing to take on the lien it is possible to have it transferred to them in some circumstances. In general, if your debt will be satisfied by the proceeds of the sale of a property, you will be expected to pay your creditor back during the process of the sale.

Question 5

Can a Bank Sell a House with a Lien on It?

Accepted Answer

Lien-holders are legally empowered to enforce liens when debts go unpaid and take possession of the property covered by the lien. They may then sell the property.

The simplest example of this is a property owner who fails to make their mortgage payments. In this instance, the bank as primary lien-holder will be entitled to take possession of the home and sell it to recoup their losses.

Most lien-holders will be more interested in working out a payment plan with you than going through the trouble of enforcing a lien.

Open communication with your lien-holder could be the difference between an amicable settlement and an enforced lien.

Question 6

Can Someone Put a Lien on My House Without Me Knowing?

Accepted Answer

Judgments which allow a debtor to attain or enforce a lien against your property can happen without your presence.

In general, you will get notice from the creditor well in advance and they will probably try to settle with you before going down the legal route. If they can’t, they’ll try to open a lien.

If you think you may have a lien on your property, check with your title company or your county recorder’s office.

Question 7

How Long Does It Take to Remove a Lien from A Property?

Accepted Answer

As soon as a debt which is supporting a lien is taken care of, the lien-holder will go through the process of removing their claim from the recorder’s office.

While this process is underway, you can request a letter from the lien-holder which acknowledges the paid debt and the release of the lien.

You should be able to use this lien release letter to complete transactions and show good faith buyers that the lien is taken care of.

Question 8

How to Find Out if a Property Has a Lien on It?

Accepted Answer

The simplest way to find out if a property has a lien is to contact the county recorder’s office. Liens are matters of public record so they will have documentation of the lien on file here.

You can also contact the title company who can run a search on the property. A clean title is a requirement for most sales, so this step is unavoidable for anyone interested in buying property.