How To Search for Liens on a Property

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If you want to purchase a property, it’s important to know how to find out if there are liens on the property that you’re considering because you don’t want any surprises. 

A lien gives another party a legal claim to the property when it’s sold. That’s why you need to know a few ways to check property liens. 

Property liens can hinder your ability to sell your home in the future, and they can cost you a lot of money to resolve. Learning how to perform a property lien search is an essential skill for any real estate investor.

Let’s go over what a property lien is and how to search for liens on property so you’re prepared to invest and get the right deal.

What Is a Lien on Property?

Before getting into the details of how to check liens on property, it’s important to know what a lien is. A lien is about more than paying simple fees. In short, a lien is a financial claim placed by a person or a company on a property, which prevents the owner from selling the property outright until the lienholder receives their allotted payments.

There are two types of liens that can be placed against a property:

• Voluntary liens: This is a lien the homeowner agrees to, like a mortgage. There is usually a contract involved to place the voluntary lien on the property, and it doesn’t negatively affect the property, its title, or the homeowner’s ability to convey title.
• Involuntary liens: This is typically placed on a property due to unpaid obligations, like a tax bill or a home improvement invoice, which is sometimes called a mechanic’s lien. These are the liens that affect your ability to sell a property easily and are also more difficult to discharge from public record.

When the property lien on a house is paid off, the creditor has been satisfied. They wanted payment, and once they have it, they can remove the lien. 

While a home’s title can be conveyed without all property liens being paid, most retail buyers won’t purchase the property without a clear title. Certainly, no lender would approve the purchase with property liens, making it extremely important to know how to find liens on property.

What Are the Four Types of Liens on a Property?

These are the four types of liens that can be placed on a property:

1. Tax liens

If you fail to pay your taxes, the federal, state, or local county government can place a lien on your property. This isn’t just for property taxes—tax liens can be placed if you fail to pay any taxes. 

Tax liens will remain until you settle the debt. This type of lien always has the highest priority and will take first place if other liens are on the property.

2. Mortgage liens

These common liens are placed on any property with a mortgage. If you want to purchase a property that has a mortgage, some of the money you pay will go to paying off the mortgage lender. Many properties have a mortgage lien.

3. Mechanic’s liens

If a property owner fails to pay for a home improvement, a contractor has the right to place a lien on their property. This ensures they get their money if the homeowner attempts to sell or refinance the property before they settle the debt.

4. Judgment liens 

A judgment lien is placed on a property if the owner is party to a losing lawsuit and can’t pay the required damages. Going through the county recorder’s, clerk’s, or assessor’s office can help you check for liens on property.

How to Find Liens on a Property

As long as you know the property’s address, you can perform a lien search on that property. Here are some ways you can check property liens:

County recorder, clerk, or assessor’s website

Most of the deed information you need for a property is available through either the county recorder, county assessor, or county clerk’s office, and deeds are public records unless they’re protected by a court order. All you need to have is the name of the owner and/or the property’s exact address to access the property records. 

You can find most of this information online through the state’s website. You often need to create an account to access the information you’re seeking, but it shouldn’t cost anything.

County recorder, assessor, or clerk’s office

You can conduct property lien searches at the county recorder, assessor, or clerk’s office in person. These offices are sometimes located at or near the county courthouse. Generally, the people in these county offices are quite helpful, and they can even give you pointers. 

Make sure to bring some money with you, as you’ll most likely have to pay for any copies you need when doing your title deed search.

Contact a local title company

Title agents can be extremely helpful in many ways—finding voluntary and involuntary liens is one of them. Having a good title agent as part of your investing team is beneficial to buyers who are serious about ramping up their real estate investing strategy. 

Title companies specialize in many things related to property titles, so if you need to search for recorded liens on property and don’t have the time or desire to do the legwork yourself, a title company can work wonders and save you time. 

It’s always a good idea to seek legal advice if you’re not sure how to handle a property lien.

What Information Can I Get From Land Records?

Deeds on land are public records that you can easily obtain, but these records aren’t always going to tell you if a property has any liens. Only some liens are recorded by the land records office.

This means you’ll have to go beyond looking at land ownership records when you begin to search for liens on an investment property. But going to the land records office is a good place to start when you check liens.

Land records can tell you:

• The name of the person who legally owns the property
• When the property last changed owners
• The history of ownership of the property

You can also find out exactly how big the property is, including its boundaries and dimensions, and whether there are any easements or attachments on it. Some property lien information may be available if it’s filed through the land records office, but if a court orders the lien, it may not show up on a land record.

What to Do if You Find a Lien

Here are some tips for dealing with a property lien:

How to remove a satisfied lien

A voluntary lien, like a mortgage lien, won’t cloud a title. The seller’s loan is paid off at the closing table, and the lien is released during the closing process.

Government agencies that hold an involuntary lien, like tax or IRS liens, should automatically send you a lien release once the debt has been paid. If you don’t receive one within 60 days of the final payment, contact them to see when you can expect to receive it.

A mechanic’s lienholder or a child support lienholder may not be aware of their obligation to remove the lien after it’s paid, or they may be under the impression it will automatically be removed. Ideally, buyers should make the final payment for the property contingent upon the seller signing a release of lien.

How to negotiate a release from a lien

In some cases, you may need to negotiate a lien release. This usually involves talking to the lien holder and offering to pay the debt off with a flat fee or requesting a percentage off of the entire amount owed.

Lien releases must be notarized in order for the county clerk or recorder to accept them. With a smaller lienholder, like a contractor, property owners need to make the final payment before they can close the deal. They can have a bank notarize the lien release, and then one of the parties involved, either you or them, must submit it to the county recorder’s office. This will remove the lien from the property.

How to remove a lien that hasn’t been paid off

Some property liens can expire before they’re paid off, but the lien still has to be removed from the property title at the county recorder or clerk’s office. 

For example, if a company puts a lien on a property you want to buy but has since gone out of business, they may no longer have a legal claim on the property. However, as the new owner, you have to do the work of getting the lien removed from the title.

A judgment lien might stay on a property for up to 10 years, depending on the state law. The lien often has to be renewed after five years if the property owner hasn’t sold the home or paid off the debt.

Title Insurance and Property Title Search

If you’re getting a mortgage on your property, your lender will require you to purchase a lender’s title insurance policy. This insurance protecting their interests will benefit them should there ever be a title dispute. A lender’s policy only protects mortgage lenders—not property owners. Buyers must purchase owner’s title insurance for their own coverage.

The title insurance policy—whether it be the lender’s or owner’s—only comes after a thorough title search is performed by the title company. After the search is performed, a policy is written. The search should turn up any property liens, and the insurance policy protects against most liens not found, such as undisclosed heirs, errors, or omissions in transferring a deed, as well as forgeries.

This kind of insurance is a little different from most insurance policies. Other insurance policies protect you against future issues—for example, auto insurance covers damages and losses in potential accidents. Title insurance protects you against past instances that actually have nothing to do with you personally.

Make Finding Property Liens Part of Your Due Diligence

Clouds on titles pop up unexpectedly. Many times, the cloud is a surprise to the seller, especially if they skipped title insurance when they bought the property. Even if the sellers purchased title coverage, it may have missed previous clouds, especially since computerized county records are still fairly new.

Unfortunately, not everyone is 100% honest all the time. The seller is trying to sell the property, so they may conveniently “forget” about unpaid taxes. It’s possible that even the real estate agent doesn’t know a property has voluntary or involuntary liens on it. 

You want to trust the seller, but you must verify what they’re telling you. In other words, you have to check for liens on the property yourself.A quick property lien search can give you the peace of mind you need to feel confident buying a property. If you find a lien on a property you’re interested in buying, it might be a good reason to skip the purchase—or, at a minimum, hire a real estate attorney to help you determine if the asset can be purchased free and clear.