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A lien is a right or claim against the property of another as security for the payment of a debt or for the performance of an act. A lien can be created by statute, common-law or the consent of the parties. State statutory law governs a variety of liens and requirements vary according to the type of lien. Common law liens are based on the relationship and the actions between the parties. Parties may consent to a lien by entering into a contract, either express or implied. The more common types of liens include mechanics’ or construction liens, tax liens and judgment liens. A person may release his or her right to a lien claim through an agreement between the parties or a lien waiver. Full payment on a lien is not always guaranteed. For example, a lien may not attach in a timely manner to obtain sufficient payment, other security interests may exist that take priority over the lien and/or the lien may fail to cover all damages and costs.
Most states have statutes dealing with mechanics’ or construction lien. A mechanics’ lien is a lien created by law that applies to real estate, including the building and the land, to secure payment for work performed and materials furnished in the construction or improvement of the property. Mechanics’ liens are used to enforce payment for mechanics, material men, tradesmen, suppliers and other persons who provide service, labor or material. A mechanics’ lien typically attaches at the time the work is commenced or the materials are furnished and continues for a specific amount of time according to state law. Some states require mechanics’ lien claims or lawsuits to be filed in the local court clerk’s office within a certain period of time. State law may require that a certain amount of work be done or materials furnished before a mechanics’ lien can be created. Some states extend the right to claim a mechanics’ lien to subcontractors.
Tax liens are also statutory and are placed on the real property of a person for the payment of federal, state or local taxes. The real estate subject to a tax lien may be foreclosed against by a court judgment or a forced sale of the land. Federal and state law governs the filing of the notice of a federal tax lien. Most states have adopted the Uniform Federal Tax Lien Registration Act that sets forth filing, notice and fee requirements according to provisions of the Internal Revenue Code. Generally, states require tax liens on real property to be filed in the property records in the recorder or clerk’s office in the county in which the property is located. If a state does not specify an office for filing, the notice of the lien must be filed in the United States District Court clerk’s office for the judicial district in which the property is located.
Judgment liens have the effect of transforming a general court judgment for payment by a debtor into a lien against the property of the debtor. If a debtor does not make payment, the judgment can then be enforced th...
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