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2022 EnVision Boards

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Yaroslav Subbotin
Yaroslav Subbotin

Liens LINK

A lien refers to a legal claim against property that can be used as collateral to repay a debt. Depending on the type of debt owed, liens can be attached to real property, such as a home, or personal property, such as a car or furniture.


For example, mortgages or property tax liens are attached to the real property on which the mortgage or taxes are owed. Personal property such as a car might have a lien on it if the owner is still paying off the auto loan they used to purchase the vehicle. Judgment liens can generally be attached to both real and personal property.

When a property with multiple liens on it is sold, each lien holder typically has a right to the proceeds. Usually, liens will be paid according to when each lien holder recorded their lien; the first person to have recorded their lien will be paid first, and so on. However, other lien types, such as property tax liens, may take priority regardless of when they were recorded.

A judgment lien is the result of a court judgment against you. If you owe someone money and refuse to pay, they can sue you. If the court rules in their favor, they can file a judgment lien on your real property and, in many cases, any personal property you own. Judgment liens can also attach to property you acquire after the lien is filed.

Contractors, subcontractors, laborers, and material suppliers can file what is called a "mechanics lien" on a homeowner's property if they don't get paid. Property owners need to be aware of the process so they can avoid financial and legal pitfalls. This section describes mechanics liens and steps that can be taken to avoid them.

Within these categories, many liens have specific names that usually stem from the type of creditor involved. See, e.g., Artisan's lien, Carrier's lien, Floating lien, Mechanic's lien, Storage lien, and Tax lien.

Nonconsensual liens typically arise by statute or by the operation of the common law. Those laws give a creditor the right to impose a lien on an item of real property or a chattel by the existence of the relationship of creditor and debtor. Those liens include

Liens are also "perfected" or "unperfected" (see Perfection (law)). Perfected liens are those liens for which a creditor has established a priority right in the encumbered property with respect to third party creditors. Perfection is generally accomplished by taking steps required by law to give third party creditors notice of the lien. The fact that an item of property is in the hands of the creditor usually constitutes perfection. Where the property remains in the hands of the debtor, some further step must be taken, like recording a notice of the security interest with the appropriate office.

In the United States, references to an "equitable lien" is a right, enforceable only in equity, to have a demand satisfied out of a particular fund or specific property without having possession of the fund or property. An equitable lien is actually a legal remedy, rather than a security interest created in contemplation of or in support of a transaction. In U.S. law, such liens characteristically arise in four circumstances:[6]

Outside of the US, a common-law lien may be defined in general terms as a passive right to retain a chattel (and, in certain cases, documentary intangibles and papers) conferred by law. Modern law has generally left the legal lien to cases where it has been historically established without any real effort being made to make it applicable to modern conditions. In Tappenden v Artus [1964] 2 QB 185, Diplock LJ referred to a lien as a "self help" remedy, like "other primitive remedies such as abatement of nuisance, self-defence or ejection of trespassers to land". Equitable liens are an unusual species of property right, usually considered sui generis.

Common-law liens are divided into special liens and general liens. A special lien, the more common kind, requires a close connection between the property and the service rendered. A special lien can only be exercised in respect of fees relating to the instant transaction; the lienor cannot use the property held as security for past debts as well. A general lien affects all of the property of the lienee in the possession of the lienor, and stands as security for all of the debts of the lienee to the lienor. A special lien can be extended to a general lien by contract, and this is commonly done in the case of carriers.[10] A common-law lien only gives a passive right to retain; there is no power of sale which arises at common law,[11] although some statutes have also conferred an additional power of sale,[12] and it is possible to confer a separate power of sale by contract.

In common-law countries, equitable liens give rise to unique and difficult issues. An equitable lien is a nonpossessory security right conferred by operation of law, which is similar in effect to an equitable charge. It differs from a charge in that it is non-consensual. It is conferred only in very limited circumstances, the most common (and least ambiguous) of which is in relation to the sale of land; an unpaid vendor has an equitable lien over the land for the purchase price, notwithstanding that the purchaser has gone into occupation of the property. It is seen as a counterweight to the equitable rule which confers a beneficial interest in the land on the purchaser once contracts are exchanged for purchase.

It is a matter of conjecture how far equitable liens extend outside of the unpaid vendor's lien. Equitable liens have been held to exist in a number of cases involving choses in action, but not yet in relation to chattels.[17] The Australian courts have been the most receptive towards equitable liens in relation to personal property (see Hewett v Court (1983) 57 ALJR 211), but a review of the cases still leaves a lack of clarity in relation to the principles upon which an equitable lien will be imposed.

Certain statutes provide for a passive right to retain property against its owner as security for obligations. For example, section 88 of the Civil Aviation Act 1982 of the United Kingdom permits an airport to detain aircraft for unpaid airport charges and aviation fuel. Although this right has been treated as a lien under UK insolvency law,[19] it has been argued that such statutory rights are not in fact liens, but rights analogous to liens,[20] although an argument may be made that this is a distinction without a difference.

It has also been argued that an agreement by contract that one party may retain the goods of another party until paid is not a lien,[20] as under the common law, liens could only be non-consensual. However, it appears that under insolvency law, such rights will be treated as liens even if they are not expressed to be liens.[19]

A maritime lien is a lien on a vessel, given to secure the claim of a creditor who provided maritime services to the vessel or who suffered an injury from the vessel's use. Maritime liens are sometimes referred to as tacit hypothecation. Maritime liens have little in common with other liens under the laws of most jurisdictions.

Throughout the world, there are a large number of different types and sub-divisions of liens. Not all of the following liens exist in all legal systems that recognise the concept of a lien. The following are descriptions that are not necessarily mutually exclusive. Types of lien include

Assessments can be for water and sewer, street improvements, sidewalks and nuisance abatements. Assessments are liens that are attached to the property, NOT to the owners of the property. A lien is the right to take and hold or sell the property of a debtor as security or payment for a debt. Assessment bills are sent during August of each year to the current owners of the property. A lien attaches to the property until the assessment is paid. Assessments can result in foreclosure of the property if the tax and interest become delinquent.

As of November 1, 2019, the SCDOR records state tax liens online in our comprehensive State Tax Lien Registry at The registry includes all unpaid state tax liens that were previously filed with county offices. State tax liens are now issued and satisfied with the SCDOR, not county offices.

(B) Notwithstanding sections 1311.02 to 1311.22 of the Revised Code, all liens, except mortgage liens, that secure payment for labor or work performed or materials furnished in connection with a home construction contract or in connection with a dwelling or residential unit of condominium property, that is the subject of a home purchase contract are subject to the following conditions:

An owner, part owner, or lessee may file with the county recorder of the county in which the property that is the subject of a home construction contract or a home purchase contract is situated an affidavit that the owner, part owner, or lessee has made payment in accordance with this division. Except if the owner, part owner, or lessee is guilty of fraud, any lien perfected on the property by any subcontractor, material supplier, or laborer for labor or work performed or for materials furnished is void and the property wholly discharged from the lien, if the lien was perfected after full payment was made in accordance with this division. The recorder shall index and record the affidavit in the same manner that releases of mortgages and other liens are indexed and recorded, and shall receive the same fees for indexing and recording the affidavit that are provided for the recording of leases.

(2) If the original contractor has not been paid in full as provided in division (B)(1) of this section, no subcontractor, material supplier, or laborer has a lien to secure payment for labor or work performed or materials furnished by the subcontractor, material supplier, or laborer for an amount greater than the amount due under the home construction contract that has not been paid to the original contractor for the work, labor, or materials or for an amount greater than the amount of the home purchase contract price that has not been paid to the original contractor. The total amount of all liens for labor or work performed or for materials furnished in connection with a home construction contract that may be enforced in lien foreclosure proceedings shall not exceed the amount due under the home construction contract that has not been paid to the original contractor or the amount due under the home purchase contract that has not been paid to the original contractor. 041b061a72


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