Liens: Overview

A lien is a claim or encumbrance on property which constitutes security for the payment of a debt, obligation, or duty. It may be created voluntarily by the owner of the property or involuntarily by actions or proceedings at law. Generally, a court judgment becomes a lien against real property once an Abstract, Transcript, or certified copy of the judgment is recorded in the county where the property is located. However, in some states the lien may be created by entry of the judgment in the court. The laws and rules as to what constitutes a lien, how it is created, its duration, and where it can be searched for and discovered are all determined by applicable state law and may vary from state to state. The duration of a lien and the effect it has on real property depends, in part, upon the type of lien and the statutory provisions creating it. When insuring title to property encumbered by a lien, such lien must either be satisfied and released of record or subordinated to the interest being insured; otherwise it must be shown as an exception to title.