Types of Liens in California Real Estate: 11 Property Lien Examples
There are many different types of liens in California, and most can lead to negative financial consequences. While a voluntary lien, such as a mortgage, can provide you with the financial means you need to buy a home, most liens are involuntary and limit your options.
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While, you can sell your home even with a lien on it, doing so is complicated. A good option, however, may be selling to a real estate investor who pays cash for houses and ensures speedy sales in Southern California.
General, specific, voluntary and involuntary real estate lien explanations
A real estate or property lien is a legal claim that’s made against a property that is owned by someone else, and liens are generally based on debts owed by the property owners. A lien is a barrier to selling the piece of real estate in question, which is referred to as encumbering the property. A property lien can be either general or specific, and understanding the difference between the two is key.
General lien vs specific lien
What is the difference between a general lien and a specific lien? The basic distinction between the two is the property involved.
Specific lien real estate definition
If the lien in question is a specific lien, it is attached or applied to one specific property. A prime example of a specific lien is a mortgage lien, which applies only to the property that is mortgaged. This means that, if you have mortgages on both your home and an investment property, a lien based on mortgage default against your investment property won’t affect the mortgage on your home.
General lien real estate definition
General liens, on the other hand, apply to all the property you own. For example, if you’re behind on your federal income taxes, the IRS can put a lien on all your properties – rather than on one specific piece of property.
Voluntary vs involuntary lien
Liens are also considered in terms of being both voluntary and involuntary.
Involuntary lien real estate definition
An involuntary lien is one that is imposed by law and has nothing to do with whether or not the owner agrees. Involuntary liens are generally based on governmental concerns, such as taxes or special assessments that regulatory authorities impose.
Voluntary lien real estate definition
A voluntary lien is an agreement you accept in relation to a contract, such as when you take out a mortgage on your home. When you borrow the money you need to purchase a home, the lender receives a lien on the purchase that serves as collateral on the debt.
What are the different types of liens in California?
There are a many types of real estate liens in California, and property lien examples include all the following:
| Lien type | General | Specific | Voluntary | Involuntary |
| Mortgage lien | X | X | ||
| Judgment lien | X | X | X | |
| Attachment lien | X | X | X | |
| Estate tax lien | X | X | ||
| Corporate franchise tax lien | X | X | ||
| Federal tax lien | X | X | ||
| Mechanic’s lien | X | X | ||
| Vendor’s lien | X | X | ||
| Vendee’s lien | X | X | ||
| Bail bond lien | X | X | ||
| Municipal utility lien | X | X |
1. Mortgage lien
A mortgage lien is a voluntary specific lien, and a clear example is the mortgage you have on your home. You entered the lien voluntarily, and it is specific to your home. What is a lien on a house? If you have a mortgage, you have a lien on your house, but there are additional involuntary liens that can also apply.
2. Judgment lien
Judgment liens are based on the failure to repay debt, and they are levied by the court. These liens are general, but they can be either voluntary or involuntary. For example, if you used the involved property as collateral in the first place it’s a voluntary lien, but if the lien is based solely on the court’s ruling, it’s an involuntary lien.
3. Attachment lien
An attachment lien refers to an involuntary lien placed on a property that prevents its sale while a legal matter is pending. An attachment lien is a good example of the kind of lien that makes selling a home more challenging.
4. Estate tax lien
Another example of an involuntary lien is the estate tax lien, which can be levied when estate taxes aren’t paid on an inherited property.
5. Corporate franchise tax lien
California is an example of a state that has a corporate franchise tax, and as a result, business owners are charged for the right to operate within the state. Failure to comply can lead to a corporate franchise tax lien.
6. Federal tax lien
The federal government has the authority to go after the assets of citizens who fail to pay their taxes. Failure to pay your federal income taxes, for example, can result in a federal tax lien.
7. Mechanic’s lien
When a homeowner neglects to pay a mechanic or contractor who does work on their property, the person or entity that goes unpaid can take out a mechanic’s lien against the specific property. An example includes work performed in relation to renovations or remodeling.
8. Vendor’s lien
A vendor’s lien applies when a home seller repossesses the property after the buyer fails to keep up with the payments. An example of when this kind of seller carry-back financing is used is when the buyer doesn’t qualify for a traditional mortgage.
9. Vendee’s lien
A vendee’s lien applies when the real estate developer doesn’t follow through with their end of the bargain on a home the buyer purchased prior to construction. For example, a home buyer who commissions a build can file a vendee’s lien against the contractor who fails to get the job done.
10. Bail bond lien
If a homeowner’s need to post bail exceeds their financial means, a bail bond company can put a lien on a property that belongs to them – such as on their home, for example – as a means of protecting their investment.
11. Municipal utility lien
If you fail to pay your utility bills for a specific property, the involved municipality can impose an involuntary municipal utility lien on the property itself. For example, failure to pay your electricity bill could, over time, lead to a municipal utility lien.
Our key takeaways on the different types of liens in real estate
There are many instances in which a lien can be implemented against a property – or against your overall assets – and some common examples include failure to adequately address unpaid debts, failure to satisfy the terms of your mortgage, failure to pay your taxes, and beyond.
The type of lien and the situation you find yourself in will dictate your best steps forward, but some of the most important concerns to begin with are how to find a lien on a property and how to remove a lien on property, which an experienced real estate attorney can help you with.
Can you sell a house with a lien? Yes, you can sell a house with a lien on it, and if your goal is to get out from under the lien and sell your property as effectively and efficiently as possible, a reputable real estate investor may be a good source. At SoCal Home Owners, we pay cash for homes in Southern California – even if a lien has been placed on your property. And we’ve streamlined the process down to the following simple steps:
- Contact us at 951-331-3844 or fill out the short form below to request your fair cash offer. Note: If you’re dealing with liens on your property, don’t worry. We have experience handling such situations, and we’ll do our best to find a solution.
- Await our prompt response to discuss your property and the liens in greater detail and schedule a one-time inspection. Note: Dealing with liens requires a comprehensive understanding of the situation, and our team will work closely with you to assess the property’s condition and lien status.
- Our in-house inspector will assess your property and liens to determine a fair cash offer based on the market value and the lien amounts. Note: The presence of liens may impact the final cash offer, but we’ll strive to provide you with the best possible solution to resolve the liens and purchase your property.
- If you’re on board with the offer, we’ll work diligently to address the liens and facilitate the sale process. Note: Resolving liens can involve negotiations and legal procedures, which may extend the timeline. We’ll work with you to find the most suitable closing date.
Throughout the process of selling your house with liens, we’ll handle the complexities and work towards resolving the liens to ensure a smooth transaction. While liens can add intricacies to the selling process, our experienced team is here to guide you through the steps and find a solution that works best for you.
Reach out to us today to discuss your situation further and learn how we can help you sell your California house with liens.
FAQs
Which lien affects all real and personal property of a debtor?
The kind of liens that can directly affect your personal property include mortgage, judgment, attachment, estate tax, Federal tax, bail bond, municipal utility and vendor’s liens but can also include corporate franchise tax (if you own a business), mechanic’s or vendee’s (if you work in the building industry).
Is a mechanic’s lien a general lien?
No, mechanic’s liens are not general liens. Instead, these liens are involuntary and specific and apply only to the actual properties the mechanics or repair people worked on. If the property owner fails to pay the debt on the work, a lien can be placed on the specific property.
Is a mechanic’s lien voluntary?
No, a mechanic’s lien is not voluntary. When a homeowner hires a mechanic or another kind of repair person to work on their home, they are required to pay for that work. If the bills go unpaid, the mechanic can file an involuntary lien against the homeowner.
Which lien is classified as a voluntary lien?
You enter a voluntary lien of your own choosing, and a prime example is your mortgage. When someone takes out a mortgage on a home, the borrower agrees to pay a specific amount of money in exchange for taking possession of the property. The lien acts as the lender’s collateral.
What is a special lien?
A special lien is another name for a specific lien. It refers to a lien – generally based on payment of a debt – that attaches only to the property to which the debt applies. For example, the mortgage lien on your home applies only to that property.
