How to Get a Real Estate Lien Removed

Use these links to jump to different sections:

• What Is a Real Estate Lien?
• Common Types of Liens
• Requirements for Lien Removal
• Legal Grounds for Disputing a Lien
• The Legal Process to Remove a Lien
• Cost of Removing a Lien from Real Estate
• Hiring a Lawyer for Lien Removal
• Find Experienced Legal Help

Having a lien on your real estate can hinder your ability to sell it. While you are the property owner, there is a creditor who has an interest in the property’s title. To regain ownership freedom, you need to remove the lien. There are several methods for removing a lien. Understanding the legal options will help borrowers know the best method for the removal of their lien.

What Is a Real Estate Lien?

A real estate lien is a claim by a creditor to the debtor’s property. This legal claim gives the creditor the right to seize and sell the property to pay off the unpaid debt. Property liens can be voluntary or involuntary, depending on the type of debt. Typically, the homeowner must pay their debt in its entirety to have the property liens removed. Becoming delinquent with the debt can put the homeowner at risk of foreclosure.

Valid liens must be recorded with the county recorder’s office where the real property is located. This puts anyone looking to buy the property on notice that a creditor has a claim to it. The current owner would need to have the lien removed to have a clear title. While a buyer could purchase the property with the lien, buyers rarely want to take on the responsibility of someone else’s debt.

Common Types of Liens

Liens fall into two categories: voluntary and involuntary liens. Voluntary liens are automatically created by the homeowner, such as when they take out a mortgage to buy the property. Involuntary loans are liens placed on the property by an outside party, such as a judgment lien issued by a court, a federal tax lien placed by the Internal Revenue Service (IRS), or a mechanic’s lien initiated by a contractor. 

Mortgage Liens

When buying a house, you take out a loan called a mortgage. The lender will place a lien on the property because it is the collateral for the loan. The lender wants to protect itself because lending a large amount of money is risky. It will have a title company perform a title search to ensure no one else holds a lien on the property that could have priority over it. Should the buyer default on their mortgage, the lender can foreclose, taking ownership and selling the property.

Homeowners’ Association Liens

Homes in a homeowner’s association (HOA) community must comply with the HOA’s regulations, covenants, and bylaws. If you don’t pay your HOA dues, fees, or fines, the HOA can attach a lien to the property. State laws vary significantly and routinely change. Many strictly define the powers afforded to HOAs. It is best to consult with an attorney if you are facing an HOA lien.

Property Tax Liens

As a property owner, you must pay annual property taxes. Failure to do so will result in a property tax lien. This type of lien takes priority over all other mortgages and liens, even when placed on the property after the other liens. These are taxes not paid to the local government. If you fail to pay, the government can foreclose and take your property to pay the outstanding owed taxes. When there is a mortgage on the property, the lender has an interest in preventing a property tax lien from getting initiated. If the government takes the property, the lender risks losing out on their ability to foreclose and seek recovery for their lien. Often, a mortgage lender will pay the property tax on behalf of the borrower and then add this amount to the mortgage.

Judgment Liens

Certain types of lawsuits can result in a judgment lien on your property. For this to happen, an unsecured creditor that you owe money to can file a lawsuit against you. Lenders of personal loans, medical bills, and credit card companies are the most common types of lawsuit filers for these liens. If the court rules in their favor, they will get a monetary judgment against you. The creditor can then take that judgment and seek a judgment lien against your property. The rules and procedures for this type of lien vary by state. If you are facing this type of lien, it is best to speak with an attorney. They can explain your rights and legal options for getting it removed.

Mechanic’s or Materialman’s Liens

If you hire someone to do work on your home, you must pay them. If you fail to do so, they can file a mechanic’s lien on your property. In some situations, this type of lien takes priority over your mortgage lender’s lien. Contactors, subcontractors, and materials suppliers can all file this type of lien.

Tax Liens

Americans must pay their federal income taxes annually. Failure to do so can result in a debt that the IRS pursues payment of. If you fail to pay the outstanding federal tax debt, the IRS will seek to secure payment through the individual’s personal assets. This includes attaching a lien to real property, bank accounts, or other valuable personal property. If the taxpayer continues to refuse to make payment, the IRS could initiate foreclosure procedures on the property.

Some states collect income tax, which you may be required to pay. If you fail to do so, the state can place a lien on the property. Similar to a federal tax lien, the state lien can also lead to a foreclosure.

Child Support Lien

Paying child support is a common responsibility of divorced parents. If a parent fails to make the required payments, the state’s Child Support Enforcement Agency can place a lien on the individual’s property. The lien must be paid before the property can be sold.

Alimony Lien

As part of a divorce decree, one spouse may be ordered to pay alimony to the other. If the ordered spouse fails to make the payments, the ex-spouse or the court can place a lien on the property. The non-paying spouse would be forced to pay any outstanding alimony debt before they can sell the property.

Requirements for Lien Removal

In order to get a lien removed, you must resolve the debt in some manner. This could be meeting the lien’s requirements by paying the creditor what you owe. By fulfilling your side of the contract, the creditor must perform their side of the contract and issue a release-of-lien form. If you cannot satisfy the lien, you can meet the lien requirements but come to an alternative arrangement with the creditor.

Once you have obtained written proof that the creditor is releasing their lien claim, you must file it with the county recorder’s office. Doing so makes the lien release part of the public record. That way, anyone performing a title search can see that the lien is no longer attached to the property. Without filing, there can be discrepancies later about whether the lien is still active.

The more time that goes by, the harder it will be to correct the issue of a satisfied lien that shouldn’t be attached but still is. Be aware that there could be fees associated with filing the lien release. You must pay these in order to have your lien release recorded.

Legal Grounds for Disputing a Lien

Just because someone puts a lien on your property does not mean you have to accept it. As the property owner, you have legal rights to dispute a lien.

Satisfied Lien

The most direct defense to a lien is that it should no longer exist because you satisfied the debt. You could show that you fully paid the creditor, so they must remove the lien. Typically, the creditor will issue a lien satisfaction or lien release document. Another common situation is a mortgage lien remaining that should have been released at the time of the property sale. As the new owner, you can show proof of sale proceeds and argue that the lien should have been released. Finally, liens can expire. If the lien you are disputing has a statute of limitations, you can argue that this time has expired, and the lien should be removed.

Incorrect Lien

Another common defense of a lien is that there is a material error that results in the lien being incorrect or invalid. For example, there could be a legal error in the filing procedure or documentation, or the lien could be fraudulent. The amount listed on the lien could be incorrect. In this situation, you may seek a correction instead of a full removal.

Agreement Already Reached

You may have gone through alternative methods to resolve the debt in some situations. You may not have outright paid the debt, but the creditor has agreed to accept another outcome that should result in the lien removal. You can present your documentation of this alternative agreement to have the lien removed. For example, you could have gone through legal dispute resolution to negotiate an agreement through mediation or arbitration. You could have had the debt discharged in bankruptcy proceedings. The creditor could have agreed to a settlement payoff. There could be a court order that dismisses the debt or orders the removal of the lien.

The Legal Process to Remove a Lien

The legal process for lien removal will depend on whether the lien is contested or not. A voluntary removal is when both parties agree that the lien should be removed. A contested removal is when the property owner wants the lien removed, but the creditor does not.

Voluntary Lien Removal

The process for a voluntary lien removal is to pay off or satisfy the debt in some way. This could be paying it in full, refinance, settlement, or some other method. The lender will send you a release of lien document that states the debt is satisfied. File a copy of this letter with the county recorder’s office where the lien was recorded. This is typically the county where the property is located. Wait for the estimated amount of time the recorder’s office states they need to process documents. This could be anywhere from immediately to 30 days.

Check the public records to confirm the lien gets removed correctly. If there is an issue, address it immediately. You may need to do this with the lien holder or the recorder’s office. Always retain a copy of every document you have in relation to your loan, payoff, and lien. That way, if an issue arises in the future, you can quickly resolve it.

Contested Lien Removal

A contested lien removal is more complicated because the parties do not agree about the removal. You may need a real estate lawyer to assist you with your legal claim. Start by gathering your documents and contacting the lien holder. Attempt to resolve the issue with them directly. If this fails, you can file a formal complaint with the appropriate agency or in local court.

Continue to gather your evidence to validate your legal dispute with the lien. You and your attorney will attend court hearings, and a pre-trial mediation will likely occur. If this fails, your lawsuit will move forward in the legal process to a trial before a judge. Here, both parties will present their evidence and arguments.

If you are successful, the court will rule in your favor and issue a court order for the lien removal. Take this court order to the county recorder’s office and have it filed. The recorder’s office must follow the court order and remove the lien. You will then need to verify that the lien was removed correctly. Keep a copy of every document throughout the entire process. You need this for your records in case there is an issue in the future.

Cost of Removing a Lien from Real Estate

Lien removal cost can vary significantly depending on how much you owe and your chosen method for lien removal. The cost could be you paying the amount you owe. If you decide to fight the lien, you will incur attorney fees and court costs. Attorney fees can be a few hundred dollars to several thousand. Court costs could be as little as $50 or add up to several hundred dollars. You may also have to pay the county recorder’s office a recording fee to have the lien release document recorded. This will make it official in the public record that the lien is no longer attached to the property. Recording fees vary significantly from $10 to $100.

Hiring a Lawyer for Lien Removal

While removing a lien should be a straightforward process, this is often not the case. Hiring a lawyer to assist you can help you address legal issues that arise. An attorney can explain your legal rights, advocate on your behalf with lienholders, and prepare necessary documents. Should you file a lawsuit, your lawyer can represent you during hearings and trial.

Alan Nochumson represents clients in a broad range of real estate matters for the firm of Nochumson P.C. in Philadelphia. He discusses the importance of looking for an experienced lawyer—those who have worked in real estate law and can anticipate and plan for potential pitfalls. “I tell my clients this: It sounds more impressive when it’s a $10 million deal versus a $100,000 deal because there are more zeros. But it has the same basic framework. There can be bumps along the way. You’ve just got to protect yourself and anticipate. I like to think two steps ahead. My clients are never ones who are suddenly shocked to be in a certain situation. I lay out where the transaction is going and where the potential minefields are. We don’t try to react four steps ahead, but we’re at least mindful of it and what potential solutions there would be.”

Find Experienced Legal Help

Seeking legal advice before you attempt to remove a lien can give you valuable insight. A real estate attorney with years of experience can advise you on your legal rights and options. With their guidance, you can effectively resolve your outstanding debt to obtain a lien release from your property.

Visit the Super Lawyers directory to begin your search for an experienced real estate attorney. For more information, read our real estate law overview.