A hold or claim that one person has on the property of another to secure payment of a debt or other obligation is called a lien. Common examples are property tax liens, mechanic&#039;s liens, judgment liens and mortgage liens. From the standpoint of the property owner, a lien is an encumbrance on a title.
Property Tax Lien
Property tax liens result from the right of government to collect taxes from property owners. At the beginning of each tax year, a tax lien is placed on taxable property. It is removed when the property taxes are paid. If they are not paid, the lien gives the government the right to force the sale of the property in order to collect the unpaid taxes.
Strata of Liens
Liens do not transfer title to property. In most states, the debtor retains title unless the lien is foreclosed. When there is more than one lien against a property, the lien that was recorded first usually has the highest priority in the event of foreclosure (exceptions to this rule are mechanic's liens, property tax liens and subordination agreements). Property tax liens are always superior to other liens.
Voluntary and Involuntary Liens
A voluntary lien is a lien created by the property owner. A mortgage lien is an example of a voluntary lien; the owner voluntarily creates a lien against property in order to borrow money. An involuntary lien is created by operation of law. Examples are property tax liens, judgment liens and mechanic's liens.
The party holding the lien is called the lienor. Examples of lienors are mortgage lenders, judgment holders and tax authorities. The party whose property is subject to the lien is called a lienee. The terms lienor and lienee apply whether the lien is voluntary or involuntary, specific or general.
Special and General Liens
A special lien is a lien on a specific property. A property tax lien is a special lien because it is a lien against a specific property and no other. Thus, if a person owns five parcels of land scattered throughout a given county and fails to pay the taxes on one of those parcels, the county can force the sale of just that one parcel; the others cannot be touched. Mortgages and mechanics's liens are also special liens in that they apply to only the property receiving the materials or labor. In contrast, a general lien is a lien on all the property of a person in a given jurisdiction. For example, a judgment is a lien on all the debtor's property in the county or counties where the judgment has been filed. Federal and state tax liens are also general liens.
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