Author:Jeffrey Lehman, Shirelle Phelps

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A right given to another by the owner of property to secure a debt, or one created by law in favor of certain creditors.

A lien is an encumbrance on one person's property to secure a debt the property owner owes to another person. The statement that someone's property is "tied up" describes the effect of liens on both real and PERSONAL PROPERTY. Lien is a French word meaning "knot or binding" that was brought to Britain with the French language during the Norman Conquest in 1066.

Real Estate Liens

In many states a mortgage is regarded as a lien, not a complete transfer of title, and if not repaid the debt is recovered by foreclosure and sale of the real estate. Real estate is also affected by liens that favor local, state, and federal governments for real estate taxes and special assessments; state and federal governments for income and sales or use taxes; condominium and homeowners' associations; and general contractors, subcontractors, material suppliers, and laborers for the value of work or materials installed on real estate. The filing requirements and STATUTES OF LIMITATIONS for these liens vary according to the law of each state.

Perhaps the riskiest move a purchaser of real estate can make is to buy without making certain that there are no liens on the property or without obtaining title insurance against liens on the property. In many states liens are secret: that is, they are hidden from the public records until required to be filed.

The priority of liens on a construction project relates back to the first visible commencement of the work. This line of law makes the last work, perhaps landscaping, equal in priority to the first, excavating. This means that during the entire work of construction, the owner must obtain waivers of lien from each subcontractor and material supplier. Without these waivers the real estate is subject to liens of all such claimants, if the general contractor, though paid in full, fails

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to pay them. A waiver is a voluntary relinquishment of a known right. Waivers of lien must be in writing, give a sufficient description of the real estate, and be signed by the one claiming a lien. No payment need be made if the claimant agrees to release the land from the lien and rely only on the credit of the owner or general contractor for payment of the debt.

Lien claimants are protected in this way because...

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