You want information on how to establish a lien on a property. When someone owes you
money and refuses or just partially pays, a lien is created.
Clearly, they are not instantaneous occurrences, and various jurisdictions have varied rules controlling liens. This is why it is important to seek expert legal counsel.
What are Liens?
A lien is a claim or legal right against property that is often used as security for a debt. If the debtor has real property, you can take action by putting a lien on the property. Some states permit liens after a judgment has been obtained, but others require the judgment creditor to record the judgment with the county prior to filing a lien.
The filing fee for a lien varies by state from $5 to $345. Privately hiring a lawyer may cost thousands of dollars, which is why a LegalShield membership makes so much more sense.
What use Does a Lien Serve?
The goal of a lien is to exert pressure on the individual who owes you money to pay you back. Because, if they fail to repay their loan, the lienholder may be entitled to seize their property.
Different Types of Liens
The most frequent lien, a mechanic's lien, is also known as a construction lien and is typically filed by unpaid contractors or subcontractors (roofers, carpenters, etc.). A mechanic's lien is typically utilized when someone is contracted to perform work on a property, completes the work, and is not paid in full.
They file a mechanic's lien in the county where the property is located and attach a copy of their invoice. The lien is then replied to, and a court date is scheduled. If the court agrees with the contractor, the lien is affirmed, and the contractor would have the right to take possession of the property if the debt is not paid by a certain period.
This sort of lien functions similarly to a mechanic's lien in that it permits a creditor to take possession of another's property. This lien, however, is filed when an individual has not been paid for reasons other than labor accomplished.
Instructions for Placing a Lien on a Property
If the creditor ignores your repeated demands for payment, you should initiate the lien procedure. As stated above, the method varies per state, however, the main phases are as follows:
You may be obligated to provide the debtor with preliminary notice that you intend to establish a lien on their property. Depending on where you reside, there may be a form to fill out and time constraints.
Review timelines - Ensure that you adhere to the timeframes for filing liens. Some states offer you only 60 days to file after the completion of the work, while others give you up to a year.
Investigate the property - Confirm that your debtor is the owner of the property by doing a title search. If there are currently other liens on the property, you will collect after them.
Draft and record the lien - Liens are typically brief and contain information on the creditor, debtor, and property. Certain states also need you to file affidavits (sworn declarations).
Notify parties — Notify all parties that the lien has been filed. This includes any additional lienholders.
Enforce - If the obligation is not paid, you can enforce the lien by filing a lawsuit against the property owner and compelling the sale of the property to collect the unpaid balance. Check with a LegalShield provider law firm to determine your state's statute of limitations.
Comments