House Sold With a Lien: Can I Sue?

For many people, their house is one of the largest single investments they will ever make. Because of the scale of personal investment involved, any issues regarding the financial aspect of homeownership can be unnerving, especially any potential restrictive liens.

Discovering a lien on your property can be a shock. It is essential to take the time to understand what liens are, how they function, and your options to resolve any issues that arise.

What is a lien?

If someone is unable to pay their debts, a creditor is someone that has not been paid and may want to collect money from the debtor by claiming a share of something of value that the debtor owns. That claim on the debtor's property may become a lien. If a lien is placed on the property, the creditor may get reimbursed if the property is sold.

Liens can be placed on all kinds of property, but they are usually placed on the most valuable items a debtor owns, like real estate, vehicles, boats, etc., because this type of property will usually cover or significantly contribute to the amount owed.

What does a lien do?

Once it has been filed, a lien limits the property owner's ability to transfer ownership of the property's title; the lien must be satisfied before the lien property is sold. Additionally, there are different types of liens. Some of the common types of liens include:

• Judgment lien
• Mechanic's lien
• Involuntary lien
• General lien

Who can put a lien on your house?

Just as there are many types of liens, there are many types of people and institutions that can put a lien on your property. When talking about who can put a lien on your property, it is worth being aware of both voluntary and involuntary liens.

If you have taken out a mortgage, the creditor may have put a lien on your house as collateral. This mortgage lien is a voluntary lien into which the debtor has knowingly entered.

If you have failed to pay for work you have had done on your property, the contractor you hired could put a lien on your property to pay for their labor and materials. If you have not paid taxes, the government may put on lien on your property to cover those unpaid taxes. These are both examples of involuntary liens.

Can you sue if your house had a lien on it when you purchased it?

Generally, a title search will determine whether a property has a lien on it. It is uncommon for people to purchase property with a lien on it because property usually cannot be sold until any liens are satisfied. However, liens in the name of previous owners can sometimes go unnoticed in a deed.

These types of situations become complicated quickly and trying to navigate this type of legal territory alone can be a challenge. If you are having issues with liens on your property, a legal professional with experience in these types of issues is a valuable resource and may make all the difference.