A lien is a right to a property granted by the owner to secure a debt. Essentially, the property acts as collateral for the loan. This means the lienholder has a right to take possession of the property if the debt is not repaid or the terms of the debt are violated, just like when collateral is forfeited if a loan is not repaid. Sometimes, property owners will attempt to sell a property without knowing or disclosing that there is a lien on the property. Liens can make themselves known at inopportune times and dealing with them can be difficult. A property with a lien on it cannot be sold or transferred without the lienholder being notified and agreeing to the transaction. Sometimes, the lien will simply transfer to the new owner. Other times, the lienholder may wish to take full possession of the property and do with it as he or she sees fit. Obviously, this can create problems and frustrations for both the seller and the prospective buyer.
To find out if a property has a lien on it, and to find out who the lienholder is, you can go to the county recorder’s office. Liens are a matter of public record, so the staff at the recorder’s office will be able to help. Additionally, in California, many county offices also maintain online databases of liens, which you can search from the comfort of your own home. Just contact your county’s office for further instruction.
In addition to making property transactions more difficult, liens can impact your credit score and even your ability to obtain employment. If you have a lien on your property, it is important to deal with it as soon as possible. An attorney can help you work with the lienholder to establish mutually agreeable terms to service the debt and get the lien removed from the property so that you can go about the business of selling it, rebuilding, or whatever it is you wish to do with the property.
If you are considering purchasing a property, it would be a good idea to check to see if the property has any existing liens on it before you get too far in the process. It does not make sense to spend the time and effort researching and gathering capital for a property if a lien will derail the process before it even gets going. Title representatives can be very helpful when tracking down liens on a property. Many property investors make title representatives an integral part of their investing team.
Contact information for California county offices can be found on the California Franchise Tax Board website. As always, be sure to contact an experienced real estate attorney to help you deal with property liens and provide expert advice.
This post was written for Housing Sacramento by Stephen Hachey. Stephen is a Florida foreclosure attorney at http://floridarealestatelawyer.org/ specializing in loan modifications, short sales, foreclosure defense and much more. He is also the owner of his own practice, the Law Offices of Stephen Hachey, PA. This article is for general informational purposes only and does not establish an attorney-client relationship. Please contact a licensed attorney in your state of residence. For more information on our services, please visit our website at www.floridarealestatelawyer.org/. The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.