A title lien, also known as a title defect, is something a court can place on a property when the property owner has failed to pay someone for something.
Typical examples include a construction firm getting one because the homeowner has not paid them for the kitchen extension. That’s called a mechanic’s lien. Or a creditor who got a lien because the property owner declared bankruptcy while still owing money on an unsecured debt.
How do you tell if a property has a lien?
It’s one of the things you should hire someone to look for when closing on a property. Including a contingency clause in the closure agreement will allow you to back out if a lien shows up that is not easily solvable.
If the seller has not mentioned the lien, that does not mean they are trying to trick you. It might just be that they did not know about it or believed they had cleared it. Sometimes a paperwork error means that a lien still shows on a property despite the person having settled the particular debt.
You can file a quiet title action to clear things up
This isn’t a lawsuit. Rather it’s a request for a local court to clarify whether a lien still exists. If they find that the lien is still relevant, it doesn’t mean you can’t buy the place. It just means the seller will have to arrange to pay off their debt with the proceeds of the sale. Liens are just one of the reasons you should always take legal help when purchasing a property.