Liens: What They Are, What They Do

By Jedidiah McKeehan

The Webster’s Dictionary definition of the word, “lien,” is: a legal claim that someone or something has on the property of another person until a debt has been paid back.

Sometimes the dictionary doesn’t do a great job describing legal issues or phrases, but it did pretty well in this instance.

In its simplest form, a lien is a piece of paper owes you money.  How is it different from a promissory note, a deed of trust, or a good old fashioned IOU?  Well, a lien is almost always something that is filed at the Register of Deeds office.

There are two way to use a lien to get back the money you are owed. The first is to file a lawsuit and get a judgment against someone. If that judgment is not paid off, you can file a certified copy of that judgment to the Register of Deeds in the county in which the judgment was granted, or in which the debtor (the person who owes money) resides or owns property. That prevents the debtor from buying or selling property in that county until the debt is paid.  How long is the filing of judgment lien good for?  Well, a judgment is only good for 10 years, and then you have to renew it if you want it to stay in place, so no more than 10 years.

The second way you most often see a lien is when there is one placed on specific piece or property by a contractor who performed work on the property.  The contractor must file a lien, and then file a lawsuit within a certain period of time to recoup the money they are owed. This is typically what happens in situations where construction or maintenance work is done on a house and the service provider is never paid.  The service provider has either 90 days or a year to file the lawsuit, depending on whether they are a subcontractor or a contractor.

The bottom line is that a lien prevents someone from buying and selling property without paying off their bill to you first and acts as a strong incentive for debtors to pay their debts.

 

Jedidiah McKeehan is an attorney practicing in Knox County and surrounding counties.  Visit attorney-knoxville.com for more information about this legal issue and other legal issues.

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