In some jurisdictions, a seller of real estate who has not been paid the full purchase price and does not take any lien or security beyond the personal obligation of the purchaser is recognized as having an implied equitable lien upon the land conveyed. This lien may be enforceable not only against the vendee (purchaser), but against any purchaser who may have had notice that the full consideration has not been paid.
A vendor’s lien may be evidenced of record by a notice of contract or similar instrument, or the lien may be reserved in a conveyance. However, a vendor’s lien may also be shown by unrecorded documentation such as escrow documentation or disclosure by the proposed insured or another party. Generally, a recorded notice of a vendor’s lien has the same priority as a purchase money mortgage and is superior to any liens existing at the time the vendor’s lien is created, except for Federal Abstracts of Judgment. Before insuring title to a property where a vendor’s lien exists, the lien must be properly released, quitclaimed, subordinated, waived, or determined to have expired under the statute of limitations.