Based on legal priority and the ability to force a sale, tax liens (specifically property tax liens) are generally considered the strongest, followed closely by mechanic's liens in the construction industry.
A first lien has a higher priority than other liens and gets first crack at the sale proceeds. If any sale proceeds are left after the first lien is paid in full, the excess proceeds go to the second lien—like a second-mortgage lender or judgment creditor—until that lien is paid off, and so on.
The three main types of liens are Consensual, Statutory, and Judgment liens, classified by how they are created: consensual liens (like mortgages) are agreed to, statutory liens (like mechanic's or tax liens) arise by law, and judgment liens (from lawsuits) are imposed by a court order to secure debt after a legal ruling.
The lien is effective from the date on which the security interest is noted on the certificate of title for a period of ten (10) years, or in the case of a manufactured home for a period of thirty (30) years or until discharged.
A tax lien is the most common type of lien and is placed on your property by the government, specifically the IRS, when you owe unpaid taxes. The lien gives the government the right to seize your property if the debt is not paid.
A judgment lien expires after 5 years from the date it is recorded but may be rerecorded once for another period of 5 years not less than 120 days before the expiration of the initial judgment.
First Mortgage Lien: Typically takes precedence over other types of liens. Subsequent Mortgages and Liens: These may be subordinated to the first lien but still have priority over others based on their recording dates. Tax Liens: In many jurisdictions, tax liens take priority over other liens, even over mortgage liens.
Your county clerk's office charges a fee for processing the release of the lien on your property. Your payoff quote will show this fee, which you're required to pay to close your home equity line of credit.
There is no limit to the number of liens that can be placed on a property, but be aware that you will have to pay each of them, in order, if you sell your home or if it's foreclosed.
Under certain inter-institutional agreements, a lender or group of lenders (i.e., second-lien lender) agrees to hold a security interest or subordinated claim in collateral to be repaid after the first-lien or senior lender receives payment in full.
Lien is the right of an individual to retain goods and securities in his possession that belongs to another until certain legal debts due to the person retaining the goods are satisfied.
When it comes to liens with higher priority than the foreclosing lien, like property tax liens and federal tax liens, they usually persist after foreclosure. Property tax liens, held by county tax collectors for unpaid property taxes, take priority over other liens, including the foreclosing lender's.
When a business takes out a loan and uses its assets as collateral, the lender might insist on being in the "first lien" position. If the business struggles and can't repay the loan, the lender with the first lien gets the first crack at seizing and selling the assets to recoup their money.
Learn about property tax liens: Property tax liens are imposed by the government when property taxes are unpaid. These liens are automatically superior to other types of liens because they are tied to the government's authority to collect taxes.
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A century ago, Henderson's spiritual leaders were demanding enforcement of Kentucky's Blue Law, which dates to the earliest days of the commonwealth and prohibits most commercial activity on Sunday.
Mortgage Liens
The lien ensures the loan is secured by your house until the debt is fully paid off. This is the most common and expected type of lien for homeowners.
File a lawsuit to vacate the lien
"An owner of a property subject to a lien always has the right to challenge or dispute the lien through litigation," states Mantzaris.
The period for how long a lien can last will vary depending on your state. However, most liens remain on a title for up to 2 years.
The first lien is the lien that is recorded first. This is usually the homeowner's primary mortgage. The first lien position is important because if you sell your home or it goes into foreclosure, this loan gets paid first.
Mortgage Liens
First mortgages are almost always recorded before any other liens are, and are high on the lien-priority ladder. Second and third mortgages: More than one mortgage can be taken out on a property. Second and third mortgages will have a lower priority than the first mortgage.
Now that you understand the basics, we can give you a quick overview of different types of property liens.