What is a Lien in Real Estate?

A lien is a legal claim or encumbrance placed on a property as security for a debt or obligation. A lien gives the creditor (lienholder) the right to have the property sold to satisfy the debt if the owner fails to pay. Liens are categorized as either voluntary (created by the property owner's agreement, such as a mortgage) or involuntary (imposed without the owner's consent, such as tax liens or mechanic's liens).

They are also classified as general liens (applying to all property owned by the debtor, like judgment liens) or specific liens (applying only to a particular property, like a mortgage or property tax lien). The priority of liens determines the order in which creditors are paid when a property is sold at foreclosure. Generally, property tax liens have the highest priority regardless of when they were recorded, followed by other liens in the order they were recorded (first in time, first in right).

Special assessment liens typically share the same priority as property tax liens. Mechanic's liens are placed by contractors, subcontractors, or suppliers who performed work or provided materials for property improvements and were not paid. The process for filing and enforcing mechanic's liens varies significantly by state.

Liens run with the land, meaning they remain attached to the property even if ownership changes, unless properly released or extinguished.