Have a lien on your house, or want to put a lien on a house, and need to know more about what that means? Here’s a quick guide to liens. If you need to chat with a real estate lawyer to find out more or get help with your lien, contact Farah Law Firm now!
What is a lien on a house?
If there’s a lien on your home, that means that someone (your creditor) has claimed a piece of your home equity. Your home equity is the value of your home minus the debt you owe on it. So, if your home is valued at $150,000 and your mortgage is down to $50,000, your home equity is $100,000. That’s the piece of your home that you officially own – your equity. A lien is the piece of your equity that has been claimed by someone that you owe money to.
Or, if you’re on the other side of a lien, it’s a useful tool to utilize when you’re owed money by a homeowner whose bill is past due. If you’re a contractor who has done work on a home but hasn’t been paid, that’s a great time at which to implement a lien.
What kinds of liens are there?
There are a couple different situations in which liens can be used.
A mechanic’s lien is when a contractor does work on a home and isn’t paid in full. The contractor can place a lien on the home until he is paid the amount he’s owed by the homeowner.
A judgement lien is when you’ve been taken to court and ordered to pay money by a judge. If you are unable to pay but you own a home, a lien is commonly used until you can pay off your creditor.
A tax lien is implemented by the government if you owe taxes and are unable to pay.
I’m a homeowner. How can I remove a lien on my property?
If the lien is justified and you rightly owe money to your creditor, the best way to remove the lien is just to pay it off. If that’s not an option for you, you can try negotiating with the creditor to come up with a plan for paying off your debt. You may need a real estate lawyer for this – contact us today to talk about your lien!
If you believe that the lien is not justified and you do not owe the creditor who placed the lien, you’ll want to contact a real estate lawyer to help you with your case. We’ll help you file a lawsuit to have the court order a lien removed.
I’m a contractor. How do I place a lien on a home?
Although the process of placing a lien is a fairly straightforward one, there’s a lot of paperwork and rules to deal with. You best plan of action is to contact a real estate lawyer today.
What happens if I just don’t pay the lien?
If you plan to one day sell your home, it’ll be very difficult to sell without paying the lien. Homebuyers do not want to buy a home that has a lien on the title, as they would then owe the money that you didn’t pay. So, you probably won’t be able to find a buyer unless you’ve either already paid off the lien or will do so with the money you make from selling the home.
Need more information about paying a lien, filing a lawsuit against one, or implementing one on a debtor? Contact Farah Law Firm today!