Property ownership is more than just having the right to use and enjoy your land and any improvements. There are many responsibilities that come along with owning a real property that can come into play, when selling it down the road.
One of the most significant and often overlooked aspects of real estate law is understanding property liens. Whether you are buying, selling, or inheriting a property, it is absolutely essential to know what a property lien is, how it can affect your title, and what legal steps to take if one shows up in the real estate process.
That is exactly what we are going to discuss here.
What is a Property Lien in Real Estate?
A property lien can give the third party, the creditor, a contractor, a judgment the right to claim an interest in your property to take possession of the property or receive payment from the sale proceeds if the debt that is attached to the lien is not satisfied.
At the end of the day, a property lien is a way for someone to secure the money they are owed, using the property as leverage.
Additionally, there are broad categories of property liens that vary between states (Kansas and Missouri). There are two classic categories. A voluntary lien would be classified as a mortgage or deed of trust. Then, an involuntary lien would be classified as a tax lien, a mechanic’s lien, or a judgment lien.
Property liens become part of the public record and could cloud the property’s title, leading to it becoming difficult or impossible to sell or refinance until the lien is resolved.
Types of Property Liens Every Owner Should Be Aware Of
As touched upon above, there are many types of property liens that property owners and future property owners should be aware of, as all of them can affect real estate transactions.
Mortgage Lien
A mortgage lien is a voluntary lien placed by the lender when you borrow money to purchase the real estate property.
Tax Lien
A tax lien is filed by local or federal governments if property taxes or income taxes go unpaid.
Mechanic’s Lien
A mechanic’s lien is one that is filed by suppliers, subcontractors, or contractors who were not paid for their services or materials used on the property.
Judgment Lien
A judgment lien is the result of a court ruling that allows a creditor to collect debt through the property.
HOA Lien
An HOA lien is one placed by the Homeowners’ Association when dues or assessments go unpaid.
For a clean title to be convyed to a new buyer, each type of property lien must be satisfied or legally cleared beforehand.
How a Property Lien Can Affect a Real Estate Transaction
Property liens can be seen as major red flags in real estate deals. If a property lien is discovered during a title search, it can derail or delay the real estate transaction entirely. It is best to disclose any property liens or get them resolved before the sale altogether.
Most buyers and their lenders require a clean title before closing.
An unresolved lien can lead to delays in closing, cancelled deals, legal disputes over who is responsible for the debt, and price reductions or escrow holds.
It can be wise to partner with a real estate attorney to view your options. At Burns Law LLC, we have represented both buyers and sellers to ensure property title issues are resolved quickly so transactions can continue with no hiccups.
How to Remove or Resolve a Property Lien Legally
A property lien does not need to be a permanent issue on your property and occasionally are either not legally attached or not legally enforceable causing slander to the title of your property. If a property lien is attached to your property, you have a few legal options to remove or resolve it legally.
First, you can choose to pay the debt in full and obtain a lien release from the creditor. On the other hand, you could choose to negotiate a settlement for a lower payoff amount.
Additionally, you can choose to challenge the lien’s validity in court if it was filed in error. If you believe this to be the case, it is wise to partner with a real estate attorney before taking the first steps.
As the property owner, you can also file for lien removal after bankruptcy discharge, expiration of statutory timelines, and invalidity or improper placement of a lien.
Before choosing a route, if you have questions or wish to be legally supported through your venture, partnering with a real estate attorney first and foremost can be wise.
Property Liens in Kansas: What Homeowners Should Know
In Kansas, common liens are involuntary liens such as mechanic’s liens (including subcontractor liens) or tax liens.
Under Kansas Law, contractors must follow strict procedures, including providing notices and filing within specified timelines, in order to enforce a legally binding property lien. If these procedures were not followed, Kansas homeowners might find that the property lien is not enforceable in court.
Additionally, unpaid state income taxes and property taxes can lead to property liens attaching directly to a Kansas Property. If you are buying or selling a property in Kansas, be sure to conduct a title review that includes a search for liens at both the county and state levels.
At Burns Law LLC, we have helped many Kansas property owners through lien resolutions, quiet lien actions, and legal reviews to ensure real estate transactions are executed smoothly.
Property Liens in Missouri: Key Differences and Legal Risks
Missouri property owners often encounter similar property lien issues as those in Kansas.
However, in Missouri, property liens are subject to different rules. For example, a mechanic’s lien in Missouri must be filed within six months of completing the work. Missouri also allows judgment liens to attach automatically once they are recorded with the county.
Missouri law requires sellers to disclose known liens on the property and enforces that if there is a failure to do so, it could result in post-sale lawsuits or rescission of the deal.
Buyers and sellers should always work with a Missouri real estate attorney, such as Burns Law LLC, to review the title and obtain lien releases before closing.
Why You Need a Real Estate Attorney to Handle Lien Issues
It is essential to remember that title companies can help identify liens, but they can not provide legal advice or negotiate lien removal terms on your behalf.
That is where a real estate attorney in Kansas City, such as Burns Law LLC, becomes essential.
At Burns Law LLC, we can conduct detailed title and lien reviews, interpret legal documents attached to your property, help resolve or discharge liens, represent your interest in lien disputes, and guide you through quiet title actions.
Whether you’re facing a lien as a seller or uncovering one as a buyer, we’re here to make real estate law more approachable and legally sound for every client.
Property liens can be confusing, but they don’t have to stop your real estate plans. With the right legal guidance, you can resolve lien issues, protect your investment, and move forward with clarity. If you are selling or looking to purchase property in Kansas or Missouri, contact the team at Burns Law LLC.