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Title & legal

Lien

In short

A lien is a legal claim against a property that secures a debt. It must usually be paid off before the property can be sold with clear title, and the creditor can force a sale in some cases.

Examples
Mortgage, tax, judgment, mechanic's
Where it's recorded
County land records
Priority
Generally by recording date
Exception
Property tax liens often come first

Common types of liens

  • Voluntary liens, which the owner agrees to, such as a mortgage or deed of trust.
  • Tax liens for unpaid property, income or other taxes.
  • Judgment liens from court judgments against the owner.
  • Mechanic's liens from contractors or suppliers who were not paid.
  • HOA liens for unpaid association dues.

Lien priority

Liens generally rank by when they were recorded: first in time, first in right. Property tax liens are a common exception and typically take priority over mortgages. Some states also give special priority to certain HOA or mechanic's liens. Priority determines who gets paid first from a sale and which liens survive a foreclosure.

Liens and foreclosure buyers

A foreclosure generally wipes out liens junior to the one being foreclosed, but senior liens survive. If a second mortgage or HOA forecloses, the first mortgage typically remains attached to the property. That is why a title search is essential before buying at a foreclosure auction. Lien rules vary by state, so consult a title professional or attorney when in doubt.

Example

Which liens survive?

A property has a first mortgage of $180,000 recorded in 2018, a second mortgage of $40,000 recorded in 2021 and a $7,000 judgment lien recorded in 2023. The second mortgage lender forecloses. The judgment lien, which is junior, is wiped out. The first mortgage, which is senior, survives. An auction buyer who pays $60,000 would still take the property subject to the $180,000 first mortgage.

Lien vs. Mortgage

Lien

A lien is a legal claim against a property that secures a debt. It must usually be paid off before the property can be sold with clear title, and the creditor can force a sale in some cases.

Mortgage

A mortgage is a loan used to buy real estate, secured by the property itself. If the borrower stops paying, the lender can take the property through foreclosure to recover what is owed.

The differenceA mortgage is one specific type of lien, created voluntarily to secure a home loan. Lien is the broader term for any legal claim against a property.

Frequently Asked Questions

Related terms

Tax LienTitle & legalA tax lien is a government's legal claim against a property for unpaid taxes. Property tax liens usually take priority over mortgages and can lead to a tax lien certificate sale or tax deed sale.Title SearchTitle & legalA title search is a review of public records to confirm who legally owns a property and to find any liens, judgments, easements or other claims that could affect ownership.Title InsuranceBuying & closingTitle insurance protects a buyer or lender against losses from ownership problems that existed before the purchase, such as undisclosed liens, forged documents or recording errors. It is paid once at closing.Foreclosure AuctionForeclosure processA foreclosure auction is the public sale of a property after a borrower defaults, where the highest bidder buys it, usually with cash and as-is. If no one outbids the lender, it becomes bank-owned.Lis PendensForeclosure processA lis pendens is a recorded notice that a lawsuit has been filed involving title to or an interest in a property, such as a judicial foreclosure. It warns buyers that the outcome could affect ownership.Deed of TrustTitle & legalA deed of trust is a security instrument used instead of a mortgage in many states. The borrower gives a neutral trustee legal title as security for the loan until it is paid off.Quitclaim DeedTitle & legalA quitclaim deed transfers whatever ownership interest the seller has in a property, if any, without any promise that the title is valid or free of liens.Deficiency JudgmentForeclosure processA deficiency judgment is a court ruling that makes a borrower personally liable for the remaining mortgage debt when a foreclosure sale brings in less than the amount owed.

Learn more in the knowledge base

Title, Liens and Due Diligence on Distressed PropertiesGuide · 9 min readDistressed properties often come with debts and paperwork problems attached. A title search, a clear understanding of which liens survive a sale and the right title insurance protect you from inheriting someone else's obligations. This guide explains what to check and when.Researching a Foreclosure Property Before the AuctionGuide · 6 min readAt a foreclosure auction you usually buy as-is, unseen and without contingencies, so research done before the sale is your only protection. This guide covers how to confirm the sale details, check title and liens, estimate value and repairs from the outside and turn it all into a maximum bid.Closing and Recording: How a Property Purchase Becomes FinalGuide · 7 min readSigning papers is only part of closing. Money has to change hands safely, the deed has to be recorded in the public records and title insurance policies have to be issued. This guide explains those mechanics, who handles each one, how to protect your funds from wire fraud and which records to keep once the purchase is complete.
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Disclaimer: The information on this page is for general educational purposes only and is not legal, financial, tax or investment advice. Laws, lending rules and market conditions vary by state and change over time, and any figures shown are estimates. Before you buy, sell, finance or bid on a property, consult a qualified attorney, financial advisor, lender or licensed real estate professional about your situation.