Before diving into the discussion of how to discharge a holding lien , it is helpful to know some basic information about holding liens.

A holding lien is a legal claim that is brought by a creditor against a tract of land or existent estate property. The lien gets attached to the holding to bespeak to others that the landowner or property holder owes money to a creditor.

In one case the lien is attached, it is by and large filed with the county records department of where the property is located and thus becomes a public record that puts everyone on notice of the landowner'south debt.

The debt that the landowner owes the creditor is ordinarily incurred at the fourth dimension that the holding is purchased. This is because it is the creditor's funds that are usually what enables the buy to happen in the showtime place.

The lien also serves as a style to ensure that the landowner repays the debt owed. If the landowner does not repay the creditor the money that they borrowed, then the creditor can use the lien to accept possession of the property. They are also immune to resell it in order to recover the funds owed by the landowner.

The nearly common type of property lien is a mortgage lien . Regardless of the blazon of lien placed on the property, all liens are considered legal documents that are enforceable in a court of police.

How Does a Belongings Lien Affect the Belongings?

Any fourth dimension that a property owner purchases a real estate property using the traditional financing method of a mortgage, it will basically ensure that the lender gets repaid. This is because of the fact that if the person ever decides to sell that belongings, their title must be clear or it will forestall them from doing so. The landowner'due south debt puts a "cloud" on their title, meaning information technology will not be clear.

Before a piece of belongings is e'er sold or refinanced, a championship report must be conducted on the belongings to determine whether there are whatsoever encumbrances, such as a mortgage, on the property. Thus, if a mortgage has not been repaid in full by the time a title search is performed, and so the lien will show up on the title report.

In order to and so sell the "burdened" property, the landowner must pay off the rest of the mortgage. Although this can pose an upshot for the seller, it is oft completed during the sale of the property, then that the seller can utilise the proceeds they collect from the new buyer to pay off whatsoever of their remaining debts .

What Happens If I Cannot Pay My Mortgage?

If a landowner is unable to go along upwards with their monthly mortgage payments, then the property lien volition provide a way for the creditor to secure repayment. The creditor or lender will be immune to start the foreclosure procedure and they can sell the property to the highest applicant in order to recoup the repayments.

A creditor is entitled to receive the initial funds provided, along with any interest that accrued on the mortgage, from the sale's proceeds. They too can collect any additional equity that is paid to the landowner as outcome of the sale.

However, if the proceeds of the sale are less than the corporeality remaining on the mortgage, so the creditor may endeavor to obtain a deficiency judgment against the landowner.

Can My Property Lien Be Discharged?

There are certain circumstances that permit a belongings lien to be discharged. When a property lien gets discharged, information technology will no longer appear on the title written report or in the records kept past the canton recorder's function. This ways that the property volition also no longer have an encumbrance on information technology and therefore, information technology can be sold because the championship is now clear.

At that place are three primary reasons why a debt may exist discharged, which include the post-obit:

  • Belch by Payment: If a debt is repaid in full (also known as a " satisfaction of debt "), the property lien will exist officially discharged. This unremarkably occurs when the property is sold for more than the amount of the debt or if the land holder pays off the debt through monthly payments over a sure catamenia of fourth dimension.
    • Once the lien is satisfied under this method, it is important that the debtor receives written confirmation from the creditor that information technology has been paid off. They must too file it with the county recorder'due south office, and so that title becomes marketable and clear.
  • Discharge by Expiration: Property liens may have to be paid off inside a specific menstruation of time. If that time lapses before a creditor renews the lien, the lien will expire and will no longer exist considered an encumbrance on the property. The amount of time that must lapse before a lien expires varies co-ordinate to the laws of each land.
  • Belch by Debt Forgiveness: This is the rarest of the three reasons why a debt may be discharged. In extremely limited circumstances, a creditor may choose not to collect on the debt and will relieve the land holder from their obligation to pay off the loan.
    • As with discharge by payment, it is likewise important that the landowner receives written confirmation from the creditor every bit evidence that the debt has in fact been discharged. They must also be sure that the confirmation is so filed with the county recorder'southward function to ensure that the title to the belongings is marketable and clear once again.

One other manner that a holding lien can be discharged is through a court order. A guess may order that a holding lien be discharged. For example, depending on the type of bankruptcy proceeding, a defalcation guess may social club that the bankrupt landowner'south lien be discharged.

Should I Rent an Attorney for Help with Discharging My Property Lien?

The process of discharging a lien can create many challenges. If it is non done properly, and then it could have a serious impact on the championship to a property. Every bit such, it is very important that you proceed charily, create a written document of the discharge as proof, and file it with the canton recorder'due south part.

In club to ensure that all of this is taken care of, you lot should strongly consider hiring a local foreclosure lawyer for help with this process.

A qualified property lawyer will exist able to review any relevant real estate documents, can aid you fix any paperwork that is necessary for a lien discharge, and can make sure that they are properly recorded in accordance with the laws of your detail land.