What Is a Lien And How Is It Removed?

Investing in a home is a major undertaking. You’re not only buying a property for the long term, but you’re also putting money into a property that could someday be sold down the line. In fact, some buy properties specifically to sell them in the future. With that in mind, it’s obviously important to keep in mind a future return on investment, the types of renovations and changes that can increase a home’s value, and the location of your home.

While an estimated 68% of all Florida home sellers reported that they were very satisfied with the selling process in 2019, there are complications that can occur as you attempt to sell a house. Some of these complications can occur due to property tax history issues and liens. Liens can really hinder your ability to sell a home. A lien is basically a claim against assets used as collateral, so a lien against a home can keep you from selling your house until the matter is resolved. You need to how best to find a property’s complete tax history before you buy it, as well as how to best perform a property lien search. Let’s look into why liens matter when you buy a property and how you can search for them.

Why Do Liens Matter?

Why do we need to perform municipal lien searches and why is understanding a complete tax history so crucial? There are actually two different types of liens to consider. One is a voluntary lien agreed to by the homeowner, which can be compared to a mortgage. A contract is involved to place this voluntary lien against a home and it doesn’t negatively affect the property in any way. Its title is not affected, nor is the homeowner’s ability to convey or transfer the title. You don’t necessarily have to be as concerned about a voluntary lien as you do about the other type of lien, which is an involuntary lien.

An involuntary lien is placed upon the home due to unpaid debts, like a tax bill or even an invoice for a renovation. The latter is sometimes referred to as a mechanic’s lien. These liens are more difficult to discharge from the public record. They actually can impede the ability to sell a home. While a home can still be sold with a lien against it, the process is more difficult. The creditor is obviously satisfied once a lien has been paid off. However, that doesn’t mean that the lien is automatically removed. A lender usually will not approve a home loan for a property with a lien against it.

How Do I Conduct a Property Lien Search?

When you wish to conduct a search for a complete tax history or more specifically a lien, there is a process that you can follow. For one thing, there are lien search companies available that can conduct this search for you. It’s much easier for you to let a company handle this for you, as they can do so properly and efficiently, cutting down your search time significantly. This way, you can move forward either with the property in question or another property entirely.

If you don’t work with a lien search company, you may find yourself dealing with a county recorder, clerk, or assessor’s office yourself. You may even need to go there in person. This can lead to you making mistakes that will complicate the process significantly.

How Can I Remove a Lien?

After you’ve found a lien and complete tax history, the lien can be removed through the payment of debts. If the lien can be released by the IRS, it will be within 30 to 60 days. However, mechanics’ liens need to be released by the creditor. They may not be aware of the need to do so and need to be alerted if they haven’t moved forward in the process.

Do not buy a home until the lien release has been signed. Though you can move forward with buying a home that has a lien against it, you must first make sure that the lien has been removed.