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Mortage Loans and Other Liens

Mortgage Loans and Other Liens

In general, liens are claims against one’s property that are made by someone in order to secure payment of a debt. In the world of liens, there are voluntary and involuntary liens. A voluntary lien is imposed by agreement between the creditor and the debtor, such as when a lender holds a mortgage on a property. The lender, in essence, has a lien against the home. Involuntary liens, however, are imposed by law, such as when a lien is placed on property for unpaid taxes or other unpaid debts. A skilled Orange County real estate lawyer can further assist you if you need more information about how a lien might affect your particular situation.

More specifically, voluntary liens on real estate can include not only mortgages, but also mechanic or construction liens, which are utilized to secure payment for work that was done on one’s property or land. Further, in addition to tax liens, involuntary liens on real estate can include demolition liens that are assessed by the government as a way to remedy against properties that are nuisances or public hazards; unpaid child support; and in divorce cases, the court might give one spouse the marital home but grant the other spouse a lien in the home that amounts to his or her interest in the home at the time of the divorce.

A well-versed Orange County real estate lawyer will also tell you that liens may be perfected or unperfected. Perfected liens are those liens for which a creditor has proven that it has a priority right in the encumbered property with respect to third-party creditors. Perfection is usually achieved by taking certain steps as mandated by law to give third-party creditors notice of the lien. The mere fact that the property is in the creditor’s hands usually constitutes perfection; however, in cases where the property remains in the hands of the debtor, additional steps must be taken, such as recording a notice of the security interest with the appropriate office in the state.

Furthermore, if you intend to sell property that has a lien on it, it is unlikely that the sale will close until the debt is taken care of because buyers will expect liens to be paid in order to allow for the transfer of a clear title. The law, however, does not mandate that liens be removed before title to property can be sold or transferred. If the property is somehow transferred without the lien being taken care of, it will remain on the property.

If you need the services of a knowledgeable Orange County real estate lawyer to assist you with your real estate lien issues, please call Daily Aljian LLP at (949) 861-2524 for a free consultation.