In the field of real estate law, when carpenters, plumbers, painters, or other types of general contractors do work on your home, they can place what’s known as a “mechanic’s lien,” or a legal notice on the home (as an asset) in order to ensure that they get paid. Once a lien is placed on a home (as a consequence of an unpaid debt), it can drastically slow down a real estate transaction.

In real estate, liens occur more frequently than many buyers and sellers realize, precisely because they are often due to unpaid bills, taxes, or a judgment made in court; all of which often occur when it comes to buying, selling, or managing residential or commercial property.

Types of Liens

In addition to mechanic’s liens, there are also:

  • Judgment liens: liens linked to losing in court, where a judgment has been entered against you. This can be filed against your home until you pay the judgment; and
  • Tax liens: liens filed against your home if you fail to pay county, state, or federal taxes.

Contesting Liens & Transaction Delays

A lien will place a real estate transaction on hold if, when the title company performs a search on a home placed under contract, any liens have been filed against the property. A mortgage company will then typically finance the property until the lien is satisfied by the seller. However, if the seller decides to contest or otherwise avoid paying the lien, the sale can be put off indefinitely.

To a buyer, the seller’s refusal to pay the lien can be interpreted as a breach of contract, warranting either walking away from the transaction or accepting responsibility for the lien itself in order to secure the transaction. For example, buyers purchasing homes that are the subject of foreclosure may have to pay off the debt. Under these circumstances, real estate attorneys must typically get involved in order to help the parties come to an agreement.

In addition, if you are a seller and are dealing with especially complicated liens on your home, you will want to seek legal counsel in order to start resolving the issue as soon as possible.

Experienced Birmingham, Hoover, and Mobile Real Estate Attorneys

When it comes to real estate transactions, there are so many details involved in that having an experienced real estate attorney on your side who knows the applicable federal and state laws can help ensure that the process goes smoothly.

The attorneys at Cloud Willis & Ellis provide excellent real estate attorney services. From investigating and resolving complex title issues, to helping deal with liens, we strive to handle every aspect and answer your questions and concerns with a strong commitment to professionalism and service. Contact us today to find out more.