If you try to sell or refinance and the title company flags a lien, your transaction stops until it's resolved. A lien is a legal claim someone holds against your property—usually because you owe them money. Understanding the common types and the clearance process keeps your timeline on track.
Common types of property liens
- · **Mortgage lien.** Your current lender has first position; when you refinance or sell, the payoff satisfies this lien and releases the title.
- · **Tax lien.** Federal, state, or local governments file liens for unpaid income tax, property tax, or special assessments. Property-tax liens take super-priority in most states, jumping ahead of even your mortgage.
- · **Mechanic's lien.** Contractors, subcontractors, or suppliers who weren't paid can file a lien against your home. Even if you paid the general contractor, an unpaid sub may still have a claim.
- · **Judgment lien.** A court awards money to a creditor, who then records the judgment as a lien. Common sources: credit-card lawsuits, medical bills, or small-claims disputes.
- · **HOA lien.** Homeowners associations can place a lien for unpaid dues, fines, or special assessments. Many HOA governing documents grant them foreclosure rights after prolonged non-payment.
How title searches uncover liens
When you apply to refinance or accept a purchase offer, the title company orders a title search—a public-records sweep of deeds, mortgages, judgments, tax rolls, and court filings tied to the property. Any recorded lien appears on the preliminary title report. If a lien exists, the title insurer won't issue a clear policy until it's paid or subordinated, so your lender won't fund and your buyer won't close.
Resolving or negotiating a lien
Pay it off. The cleanest path is full payment at or before closing. Mortgage and tax liens are satisfied from sale or refinance proceeds automatically; smaller liens come out of your net proceeds or you bring extra cash.
Dispute it. If a lien is incorrect—wrong property, already paid, or the creditor missed a deadline—work with an attorney to file a motion to discharge or expunge. Mechanic's-lien deadlines are strict; many states require filing within 90 days of the last work date.
Negotiate a release. Creditors holding old judgment or HOA liens sometimes accept less than the full balance in exchange for a lien release, especially if they know foreclosure or collection is unlikely. Get any settlement in writing and recorded.
Subordination. In a refinance, a second-mortgage or HELOC holder may agree to stay in second position behind your new first mortgage instead of demanding payoff. The new lender will require a signed subordination agreement before closing.
Consult a CPA or attorney; this is not tax or legal advice.
The Alliance take
Liens don't have to kill your transaction, but they do require advance notice and a clear plan. As soon as you know you want to sell or refinance, pull your own title report or ask your agent for a preliminary search. The earlier you spot a lien, the more options you have to clear it without delaying closing. Ready to move forward? Start an application and we'll coordinate title work from day one.