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McHenry County Real Estate Lawyers

A real estate lien is a legal claim that grants the lienholder payment from the proceeds resulting from the sale of the liened property. Often, they are used as collateral to ensure that a lender receives a repayment of the debt the borrower owes. The most common example of this is a mortgage. Although liens can be placed on properties of delinquent borrowers, they are not always used in this manner.

Before purchasing real estate , it is important to work with an experienced real estate lawyer to help you become familiar with the types of liens that may exist on the property you intend to buy.

Types of Real Estate Liens

There are many different types of liens that can be attached to real estate. One specific type, a judgment lien, can only be placed on a property after the creditor files a lawsuit against the borrower and the court rules in the creditor's favor. This type of lien can be placed without the borrower's consent.

Other types of property lien do not require a court judgment to place. These include the following:

  • Child support liens. Individuals with outstanding child support debt can have liens placed on their properties that are only lifted once they satisfy their debt
  • Mechanic's liens. When a contractor does work on a property and does not receive payment, he or she may have a mechanic's lien filed against the property. In Illinois, a contractor has four months following the completion of work to record a mechanic's lien, which for the contractor must enforce within two years thereafter
  • Property tax liens. In Illinois, property taxes always appear as a lien on title. When a property owner fails to pay his or her property taxes, the government may sell the debt to a third party tax buyer. If the sold taxes are not timely redeemed (i.e. paid in full with interest and other costs), then eventually the tax buyer may obtain full legal title to the property., and
  • IRS liens. Like a property tax lien, an IRS lien is a lien placed on an individual's property to recover delinquent income taxes he or she owes to the Internal Revenue Service (IRS).

When a lien is not repaid, the lienholder may initiate foreclosure proceedings on the property. However, the manner in which the property is titled may provide some protection against that type of enforcement action.

Determining if your Property Has a Lien

Liens are a matter of public record and may be searched by visiting the office of the appropriate County Recorder. Some counties now have searchable online repositories for all recorded documents. However, probably the best way to determine whether any liens have been recorded is to obtain either a tract search or a title report for the subject property. If the property is being sold, then the contract will generally require the seller to obtain a title commitment or title abstract, which will reveal whether specific liens exist which affect that particular property. Once available, those documents should be reviewed by an experienced real estate attorney. With the exception of any liens which "run with the land" (e.g. real estate tax liens), the Seller will need to satisfy all other liens no later than closing.

What to Do if there is a Lien on the Property you Intend to Purchase

Your experienced BGL real estate attorney will review the title commitment and advise you about any existing liens on a property you intend to purchase. This could be a deciding factor in whether you choose to pursue a property. In most cases, the seller will be able to obtain payoffs and satisfy any liens at closing from the sale proceeds. However, if you should happen to purchase a home with an unreleased lien, which could occur if you close without legal representation, then you may find yourself facing collection attempts on the lien.

Work with an Experienced McHenry County Real Estate Lawyer

Real estate law can be complicated, and property liens are just one of the many issues that are best handled with the guidance of an experienced Crystal Lake real estate lawyer. To learn more about real estate liens and what to do if you are facing one, contact our team at Botto Gilbert Lancaster, PC today to set up your initial consultation in our office.

Illinois State Bar Association State Bar of Wisconsin Crystal Lake Chamber of Commerce Illinois Trial Lawyers Association McHenry County Bar Association
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