for common expenses in a timely manner. They vary by state. Consult with a local attorney for more information.
HOW A LIEN AFFECTS YOUR PROPERTY
A seller needs a clear title to undertake a property transaction, including sale and financing. A lien charged to your home makes the title unclear. While under contract for sale, the title company will perform a search for liens that may have been filed against the property. Where a lien is discovered, the transaction is put on hold. A lender will not finance a property until the lien is satisfied, or paid off, which is the seller’s responsibility. In most cases, the seller will act swiftly to resolve the debt. However, the seller could refuse to pay or contest the lien. If this happens, the sale will await a definitive outcome. The buyer has two options if a seller refuses to pay the lien. The refusal can be viewed as a breach of contract; this allows the buyer to cancel the sale without losing the earnest money deposit. Or, the buyer can accept financial responsibility for any liens to move the transaction along. In a cash transaction, the buyer and the seller are free to come to a resolution on their own terms.
HOW CREDITORS COLLECT ON LIENS N LIENS
A lien holder doesn’t obtain any ownership or hold the property title. However, a lien holder is granted certain rights regarding the property—namely, a share in the sales proceeds if the loan isn’t paid off and the property is sold. Lien holders generally can’t place themselves on to the title to obtain ownership. The main right of a lien holder is to have priorities from the proceeds of a sale if there is a default on payments or a foreclosure.
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