Selling your home can be stressful enough even if you do not need to deal with a lien that has been placed on your home. You might not even know that you have a lien on your home until you go to sell it and finding that this legal action has been taken against your property can be very frustrating. If you have found that there is a lien in place on your home, you might not be sure what will happen to the sale of your home.
Liens can prevent the sale of your home and you might have to submit to an extensive process to have the lien lifted from your property so that it can be sold. You will find that lien processes are not usually highly complex but they can be time-consuming to resolve due to paperwork and delays related to the mortgage on your home.
If you are worried that there might be a lien on your home that could prevent the sale of the property, you will want to be sure that you are aware of the lien process and what it can mean for you.
If you are ready to learn more about how a lien can impact the sale of your home, read on!
What is a Lien?
A lien is a claim or legal right against assets that are established against your property after non-payment on the property or another bill has not been made. Some medical organizations and other companies will take out a lien against your home if you do not pay the money that is due to them in a timely fashion.
Liens guarantee an underlying obligation like the repayment of a loan. If the obligation has not been satisfied, the party that has not been paid will have to seize the asset, which could be your home.
Liens can prevent many kinds of interactions between other companies and yourself in the future. Liens that have not been satisfied indicate that the bills they are associated with have not been paid. This is considered a fair warning for those who are offering your additional credit. Liens will also damage your credit, making it hard to get loans in the future.
Types of House Liens
There are three types of liens that might be placed on your home. These types are consensual, statutory, and judgment. The judgment lien is the most difficult form of this kind of lien but it can still be satisfied just like the other liens. Consensual liens are voluntary and are items like mortgages that are offered to help you buy expensive items.
Statutory liens are leveled against your property for nonpayment of medical bills and other kinds of large amounts of money due. You will find that these liens are easy to remove by paying back the amount of the debt, but you might sometimes have to follow up to be sure that your credit report reflects that the issue has been taken care of.
Does a Lien Hurt Florida Homeowners?
Liens do hurt homeowners because they are impediments to the sale of the home and they can impact your credit. Liens are meant to force you to make payment and the penalties for leaving them in place can really add up. Being unable to get new credit for things like cars or a new credit card can be very frustrating as well as limiting for those with liens on their home.
In addition, the duration of the lien can impact your credit in significant ways. You will find that liens can be very hard on your credit and it can take years to erase the damage done by the lien process to your home. If you are concerned that there is a lien on your property that will damage your credit or keep you from getting new loans and lines of credit you need to make sure that you satisfy the debt that is owed before it grows bigger or hurts your credit more.
Liens can be very bad for your credibility as well as your ability to seek new credit or use the credit that you do have with ease. Liens can be an unfortunate consequence of bills that you were unaware were not paid in full or might be related to items that you are aware you have not paid.
No matter the reason for the lien, you should make sure that you work on the repayment process so that you are not damaging your credit and harming your ability to buy a new home or other large purchase when it is needed.
What Happens if you Don’t Pay a Property Lien?
If you are not addressing a property lien either through a dispute that is being assisted by a lawyer or through other means of outreach to the entity that has placed the lien on your home, you might lose your home. Liens are intended to force you to make payment on a debt and they are a legal means by which the other entity can force you to lose your home if you do not pay the debt in question.
While you will have some recourse that could prevent the sale of your home to satisfy the debt in question, ignoring the lien and hoping it will go away will never help you in this goal. If you find out that there is a lien against your home that has not been satisfied, you will need to be sure that you get the help of an attorney so that you do not lose your home due to an unpaid bill.
You should be aware that many medical providers and other large business entities will often be willing to work with you to set up a payment installment plan if that is what is required to get the debt that is owed paid off. You will not always be forced to pay for the amount that is owed in one lump sum and your attorney will help you to avoid this outcome for your payment process if you have been told that this is the only way that payment can be accepted.
How Do You Get a Lien Off Your Florida Residence?
The first step in this process is to pay the debt that has caused the lien. Many entities will release the lien from your property as soon as the debt is paid, but some will have a slower turnaround time due to the size of the company and the number of liens and payments that are handled each day.
You will have to be sure that you get a letter that states that the lien has been satisfied and paid off. This letter should be notarized and there should be a corresponding notice that comes from the local Florida court that says the lien has been satisfied as well.
These documents will be essential if you have wanted to sell your home and the lien that was in place is preventing the sale. It can take a few weeks for the documents to be made available online and to be attached to your case at the business in question, so having the letters that show that the lien has been satisfied can make it possible to proceed with the sale of your home.
If you are negotiating a partial pay-off, you will have to work with the entity that put the lien in place to make sure that they will write off the remainder of the debt once you have made this agreed-upon partial payment.
This is one of the kinds of lien pay-off agreements that require that you definitely get the right documents to prove that the lien has been taken care of. These kinds of payment processes are more like settlements and can be improved by having the help of an attorney.
If you feel that the lien has been placed against your property unfairly and you think that you do not owe the debt in question, you might need to go before a judge and argue against the validity of the lien. You will need to wait for a court date and have an attorney if you are not versed in the legal aspect of this process.
If you are not trying to sell your home and you do not mind that your credit is impacted, you can wait for the statute of limitations to expire on the lien. This period varies depending on the state that you live in, but you should be aware that the entity that placed the lien on your property will have the right to renew it if they choose to do so before the time period is up.
Filing for bankruptcy will also remove a lien against your home. You will want to use this option as a last resort, but it can be the only way for some people to get out from under a lien that they cannot get satisfied through repayment.
How do Property Liens Work in Florida?
Property liens are put in place when a company or business feels that you owe them a large sum of money that has not been repaid. The lien process is simple in most states and requires only that a legal document be filed by the entity that states the amount of the debt that is owed, the date that it was incurred and the name and address of the person that the lien is being placed against.
Property liens are then sent into the local court or filed in person and the court keeps a copy of the documents as well as providing a notary stamp on the originals that have been created. The original with the stamp will often be sent back to the entity that placed the lien and they will send you a copy of this notarized lien document that states that you might lose your home if you do not pay what is due.
The lien will be on file as active with the court in your area until the debt has been paid. When you try to sell your home, the realtors involved will check for liens that are filed in your county or state to be sure that your home can be sold. These documents are provided by the court to requestors so you will not be able to hide that there is a lien on file for your property.
When you pay off the lien, another notarized document will be sent to you that shows that the lien has been satisfied and paid in full. These documents are very important for the sales process of your home and you will need to provide them in many cases to be able to finalize the sales process.
What Kind of Liens Can Be Placed on a Florida Home?
There are a few kinds of liens that can be placed on your house.
- Mortgage Lien
This is a lien that is the most common type that might be placed against your home. The mortgage lender will put this in place when someone closes on a loan and it is part of the sales documentation that is used in most states to finalize a sale and initiate a mortgage against the property.
- Tax Liens
These liens are placed when you are not paying your real estate taxes. If tax liens are not satisfied, the government can actually seize your home and sell it at auction to recover the money that is due for back taxes.
- Mechanics Lien
If you hire someone to work on your property and then do not pay them, they can file a mechanic’s lien against the property to get the amount that they are owed from you for their work. This is common in construction jobs where payment is not taking place as it should.
- IRS Lien
This lien is filed by the government for nonpayment of taxes. The government can seize your home if you do not pay the back taxes that are due and sell it at auction to recover the amount that it is owed.
- Judgement Lien
This lien is placed on your home when a judge states that the property owner has lost a court case. Those who do not pay the amount that is due after losing a lawsuit can lose their home to foreclosure.
- Child Support Lien
Not paying your child support can lead to a lien being placed on your property. This lien can lead to the loss of the home if the missed child support is not paid back. You can sometimes arrange a repayment plan for child support liens that will allow them to be removed.
Can You Have a Lien on Your House From a Previous Owner?
The title search process that is done for any home that is for sale and has someone interested in buying it should always turn up existing liens that are on the property. You cannot buy a home that has a lien on it and the proceedings of the sale should always be halted until this process has been completed.
There are rare instances that a lien might not be correctly recorded and therefore will not turn up on the search for liens against the property. This can lead to a need for a lawyer to help you to get this incorrect lien removed from your property since you are now the owner. Incorrectly filed liens will almost always be considered null and void.
Liens Can Impact Your Credit and the Sale of Your Home in Florida
It is always wise to attend to a lien against your property as soon as you are aware that one has been put in place. Your home sale process can be hindered greatly by having a lien in place on the property and your credit will be impacted negatively as well. Liens are meant to force you to pay your debt or lose your home and you should get an attorney if you think that you cannot pay back a debt that might lead to you losing your home.
There are many options that can be explored to help you to keep your home and to pay back the debts that are owed and liens can often be satisfied more easily than you think. Avoiding attending to them out of fear about how much you will have to pay upfront for your debts is not wise. You will always be more likely to be able to keep your home if you get help with the lien removal process and take care of all of the steps that are needed right away.
Even if you are not planning to sell your home right now, you should not let a lien stay in place against the property so that you are not prevented from getting new credit and so that your overall credit score is not damaged.