What is a Real Estate Lien? A Complete Guide for Homeowners

Written by: Daly Kay DiNatale

Date: Jun 24, 2025

A real estate lien is a legal claim attached to a property, notifying creditors and the public of an unpaid debt. Liens are typically recorded in county public records for real property or with the Secretary of State for personal property. This claim “clouds” the property’s title, preventing the owner from selling or refinancing until the debt is settled. At Capital Funding, we help property owners navigate liens to secure clear title and achieve their financial goals.

Why Do Liens Matter?

Liens protect creditors by ensuring repayment before a property changes hands. If a lien remains unpaid, certain lienholders may initiate foreclosure, forcing a property sale to recover the owed amount. Understanding liens is crucial for homeowners to avoid legal and financial complications.

The 7 Most Common Types of Real Estate Liens

Liens vary by origin and impact. Below are the seven most common types of property liens homeowners may encounter:

1. Property Tax Lien
   When property taxes go unpaid, local governments (city or county) can place a lien on the property. Unresolved tax liens may lead to a forced sale.
   Solution: Pay overdue taxes or negotiate a payment plan with the taxing authority.

2. IRS Lien
   The IRS files a lien for unpaid federal taxes. If the property has equity, the lien can be settled from sale proceeds. For short sales, taxpayers can request an IRS lien discharge or subordination to facilitate refinancing.
   Learn More: Explore tax lien resolution options.

3. Mechanics’ Lien
   A mechanics’ lien secures payment for labor or materials used in property improvements (e.g., renovations). These “super liens” may take priority over existing liens, including mortgages. State laws dictate filing requirements.
   Tip: Verify contractor payments to avoid mechanics’ liens.

4. HOA Lien
   Homeowners’ associations (HOAs) impose liens for unpaid fees or special assessments (e.g., for landscaping or community repairs). Delinquent HOA liens can cloud title and lead to foreclosure.
   Avoid Issues: Stay current on HOA dues and assessments.

5. Judgment Lien
   A judgment lien arises from a lawsuit won against the property owner, attaching to the property to secure payment upon sale.
   Next Steps: Consult a legal expert to address judgment liens.

6. Utility Lien
   Cities or utility companies file liens for unpaid bills (e.g., water, electricity). These liens can complicate property transactions.
   Solution: Settle utility debts promptly.

7. Divorce Lien
   A lien may be placed on a property as part of a divorce settlement to ensure equitable distribution of assets.
   Need Help?: Contact Capital Funding for lien resolution support.

Are All Liens the Same?

No, liens differ in type and priority. Priority determines which lienholder gets paid first in a foreclosure or sale. For example, a first-priority lien (like a primary mortgage) takes precedence over junior liens. Senior lienholders receive repayment before others, and foreclosure may extinguish junior liens. Understanding lien priority is critical when financing or selling a property.

What is the Foreclosure Process for Liens?

The foreclosure process varies by state. In Florida, a judicial foreclosure state, the process involves:

1. Lawsuit Filing: The lender files a complaint with the court, serving the borrower and junior lienholders to clear inferior interests.
2. Borrower Response: The borrower has 20 days to file an answer. Failure to respond may lead to a default judgment.
3. Summary Judgment: If no material disputes exist, the lender may file for summary judgment to expedite the case.
4. Final Judgment: If the lender prevails, the court sets a foreclosure sale date (typically within 60-90 days).
5. Public Auction: The property is sold to the highest bidder, with the lender credited up to the judgment amount. Publication of the sale date ensures transparency.
6. Post-Sale: The borrower has 10 days to object. If no objections, a new certificate of title is issued.
7. Eviction (if needed): If the homeowner doesn’t vacate, the new owner can request a writ of possession, enforced by the sheriff.

Curious about foreclosure in your state? Contact Capital Funding for personalized guidance.

How to Resolve a Property Lien

To clear a lien and restore clean title:

• Pay the Debt: Settle the owed amount and file a lien release with the county.
• Negotiate: Work with the lienholder for a payment plan or reduced settlement.
• Dispute Invalid Liens: Consult a real estate attorney if the lien is erroneous.
• Seek Professional Help: Partner with experts like Capital Funding to navigate complex lien issues.

Protect Your Property with Capital Funding

Liens can be overwhelming, but you don’t have to face them alone. At Capital Funding, we specialize in helping homeowners resolve liens, avoid foreclosure, and secure financing. Whether you’re dealing with a tax lien, mechanics’ lien, or HOA lien, our team is here to guide you.

Ready to clear your property’s title? Contact us today for expert lien resolution and real estate financing solutions.