A lien is a legal claim against a property that secures a debt, and a judgment lien is a court judgment recorded against the debtor's property. Liens attach to the property and travel with it, which is why title searches exist: to find them, evaluate them, and clear them before closing.

What a Lien Is

A mortgage is a voluntary lien the owner agreed to. Involuntary liens, like judgment liens, tax liens, and mechanic's liens, attach without the owner's consent. All liens encumber the property and must be paid or released before a clean title can pass to a buyer.

  • Voluntary liens: mortgages and deeds of trust.
  • Involuntary liens: judgments, taxes, and mechanic's liens.
  • Liens attach to the property, not just the owner.

How Judgment Liens Work

When a court awards money against someone, the judgment can be recorded in the county where the debtor owns real estate, creating a lien on that property. The lien must be satisfied before the property can be sold with clean title. Recording requirements and enforcement rules vary by state.

  • The judgment must be recorded to attach to real property in many states.
  • The lien attaches to property the debtor owns in that county.
  • Satisfaction of judgment must be recorded to release the lien.

How Title Searches Find Liens

The title search examines the public record for liens and encumbrances. The preliminary title report lists them as exceptions, and the closing team works to clear them: obtaining payoff statements, recording releases, or negotiating escrow holdbacks. The goal is a title that can be insured.

  • Preliminary reports list liens as exceptions.
  • Payoffs and releases clear most liens.
  • Some liens can be insured over with the underwriter's approval.

What Happens at Closing

At closing, the seller's proceeds pay off the liens, and the lienholders record releases. If the lien amount exceeds the proceeds, the parties negotiate: the buyer may accept the property subject to the lien, or the deal may fall through. Title insurance protects against liens that were not discovered.

  • Payoff statements are obtained from lienholders.
  • Proceeds are disbursed to satisfy the liens.
  • Releases are recorded after closing.

Liens on Investment Properties

Investors face the same lien rules as any owner, plus the liens that come with business: contractor liens from renovations, judgments from business disputes, and tax liens. Because investors buy and sell frequently, a lien discovered late can kill a deal that was otherwise ready to close.

  • Check the record before every purchase and sale.
  • Resolve contractor liens promptly.
  • Keep satisfaction and release documents organized.

The Bottom Line

Liens are a normal part of real estate, and most are resolved routinely at closing. The danger is discovering them late. A title search early in the process gives everyone time to clear the record before the closing date.

  • Read the guides on HOA liens and tax liens for those specific types.
  • Read the blog article on selling a house with a lien.
  • Request an exact title and escrow quote when you have a property under contract.