The process of selling a house comes with many challenges. There is getting the house cleaned up, finding an agent, and negotiating back and forth with buyers. These things alone can be stressful. If you add to it having to deal with liens on a property, it can be overwhelming.
What is a lien?
A lien is a legal claim against a piece of property that is recorded with the local county, giving the lienholder a legal interest in a property. A lien creates a could on title and will appear in public records for a property. In more simplistic terms – A lien is a notice that attaches to your property, telling the world that a creditor claims you owe them some money.
What liens can be put on a house?
There are two different types of liens that can be attached to a house: involuntary liens and voluntary liens.
What are voluntary liens on a house?
Voluntary liens are liens that you have signed off to attach to your property. Some examples of these would be a mortgage, a home equity loan, and a solar lien.
When you purchase a house using money from the bank, the bank will record a lien on your property. This serves as collateral for your mortgage and ensures the lender gets paid if you decide to sell the house. In addition, if you fail to make payments on your mortgage it gives the bank the right to the property if it is foreclosed on.
Home equity loan lien:
A home equity loan is when you borrow money against the equity you have in your house. In the same way that your mortgage protects the bank, the loan is also secured to the house using a lien.
If solar panels are purchased for a house, the solar panel company will likely place a lien on the house if the panels were financed.
What are involuntary liens on a house?
There are many different liens that can be placed on a house. Some examples of these are mechanics liens, child support liens, tax liens, and judgment liens. It is important to note that some liens are not allowed to be placed on a property if it is a homestead.
A mechanics lien is filed by someone who has done work on a house, but claims they have not been paid. This can be a roofer, a plumber, or any other person or business that claims they have done work to improve your property (done work on your house) and were not paid.
A judgment lien can be the result of things like unpaid medical debt or credit card debt.
Child Support lien:
A lien can be placed on a house if the owner fails to make child support payments or alimony.
A tax lien on a house can be the result of the homeowner failing to pay their income tax, property tax, or other taxes.
Texas state law gives your homeowners’ association or condo associations the right to put a lien on your property if you fail to pay assessments, fees, or fines. An HOA lien is a judgment lien that results from a court-ordered money judgment. In essence, an HOA will go to court over a homeowner member’s delinquent dues and attempt to convince the court to issue a judgment.
A utility lien is placed on a house when payments are not made for a certain utility, like water for example. There are some restrictions on utility liens in Texas. You cannot place a utility lien on a homestead. In addition, you cannot place a utility lien on a house where it is in a tenant’s name.
How can you tell if a house has a lien on it?
It is actually easy to find out if a property has a lien on it. Since property liens are public information you can search the property records on the county clerk’s website, or if the information is not online, you can contact the county clerk or recorder of deeds. In addition, you can pay a title company to do a title search.
Can I sell a house with a lien?
In order to clear the title to a property, all liens must be removed. Since the purpose of the lien is to protect the lienholder, the lien will stop a title company from issuing title insurance, which would stop a potential buyer from moving forward.
How do you remove a lien on a house?
If you have had an involuntary lien placed on your property you first need to determine if the lien is legitimate. See if you recognize the name of the plaintiff (person or company who has filed the lien). If you don’t recognize the lien, you can call whoever is listed as the plaintiff and find out more information. If you find out the lien is legitimate, then you can remove it by paying it off. In some cases, you can negotiate to reduce the lien.
If the lien is not legitimate, you will likely need to seek legal action.
Sell a house with a lien
If you don’t want to deal with the hassle of clearing a lien or don’t have the money to do so, we can help. We buy homes in all conditions, including homes with all types of liens on them.
Get in touch with us by filling out the form below, or by giving us a call at 713-903-2582.