Owning property can bring immense pride—but discovering a lien on a house can quickly turn that pride into panic. Whether facing financial difficulties or unexpected legal issues, the stress of managing liens can feel overwhelming.
In California, liens are legal claims against property, often arising from unpaid debts or obligations. They can significantly impact property ownership and financial stability. In fact, the California Franchise Tax Board (FTB) automatically imposes a statutory lien on all real or personal property when a tax debt is owed. This causes a lot of uncertainty for homeowners who may find it challenging to sell or refinance their properties until the lien is resolved.
At Osborne Homes, we understand the emotional toll liens can take and frequently help homeowners regain control by purchasing lien-affected properties. Let’s break down the various types of liens in California as well as who can legally place a lien on your home and how we offer solutions to help you move forward confidently.
Table of Contents:
- Types of Liens in California
- 11 Parties That Can Place a Lien on Your House
- How Osborne Homes Can Help
- Ways Liens Can Be Filed in California
- How to Verify the Lien’s Validity
- 3 Steps for Negotiating with the Lienholder
- How Osborne Homes Simplifies Selling Homes with Existing Liens
- Frequently Asked Questions About Property Liens
Types of Liens in California
Liens can affect your ability to sell or refinance property, as they give creditors a legal claim to assets until debts are settled. Understanding the different types of liens in California can help you determine how they may impact your financial situation.
Voluntary Liens
These are liens you willingly agree to when borrowing money. Common examples include mortgage liens, home equity loans and auto loans. Lenders place these liens as security, allowing them to claim the asset if the loan isn’t repaid.
Involuntary Liens
These are imposed without your consent due to unpaid debts. Examples include tax liens from unpaid taxes, mechanic’s liens for contractor work and judgment liens from court-ordered debts. These liens can complicate property sales and limit access to credit.
General Liens
These liens apply to all your assets rather than a single property. Judgment liens and federal or state tax liens in California are common examples. Since they are not limited to one property, they can impact multiple real estate holdings and financial assets.
Specific Liens
These are attached to a particular asset, such as a home or vehicle. Mortgage liens, mechanic’s liens and property tax liens fall under this category. These liens prevent property transfers or refinancing until debts are satisfied.
11 Parties That Can Place a Lien on Your House
Below is a comprehensive list of individuals and organizations authorized to place a lien on a house.
1. Mortgage or Loan Companies
If you default on your mortgage or loan, the lending company can file a lien to secure repayment. Mortgage liens are standard, as the home itself is collateral for the loan. Unpaid loans or refinances can trigger these liens, significantly impacting your property’s equity and value.
2. Contractors and Subcontractors
Contractors who have performed work on your home can file a mechanic’s lien in California if unpaid. The Mechanics’ Lien law provides special protection to contractors, subcontractors, laborers and suppliers who furnish labor or materials to repair, remodel or improve property.
3. Homeowners’ Associations (HOAs)
HOAs can place a lien on your home for unpaid association dues or special assessments. These liens enforce payment obligations and can lead to foreclosure if unresolved, adding pressure to already strained financial situations. Information on HOAs placing liens for unpaid dues can be found in California Civil Code § 5675.
4. Utility Companies
Failure to pay utility bills—such as water, electricity or sewer—can result in liens against your property. While less common, these liens can still complicate selling or refinancing your home, as the outstanding balance must be resolved first.
5. Judgment Creditors
If someone wins a lawsuit against you, they may file a judgment lien. This lien attaches to your property until the judgment is satisfied. A judgment lien in California will remain attached to the debtor’s property (even if the property changes hands) for ten years and can affect future homes sales.
6. Government Entities
Local, state and federal government entities can place liens for unpaid taxes, fines or code violations. Property tax liens in California are common and particularly troublesome because they can lead directly to foreclosure if not addressed promptly.
7. Child Support Enforcement Agencies
If you owe unpaid child support, enforcement agencies in California can file a lien against your home. These liens prioritize repayment and are challenging to remove without settling the debt.
8. Bail Bond Agencies
If you’ve breached a bail bond agreement, agencies have the right to secure a lien against your home as collateral to recover their funds. This lien remains until the agency’s financial interest is fulfilled.
9. Auto Loan Lenders
Auto lenders can place liens on your property if loan obligations are not fulfilled. Typically, these lenders will first seek a judgment in court and then file a lien against your home to secure repayment.
10. Hospitals and Medical Providers
Medical debts can escalate quickly and if unpaid, healthcare providers can seek judgments that become liens against your property. These liens must be satisfied before selling or refinancing your home.
11. Business Partners or Investors
Disputes or debts arising from business partnerships or investments may lead to judgment liens against your property, particularly in scenarios involving joint liability or contractual obligations.
How Osborne Homes Can Help
Dealing with liens can feel overwhelming, but Osborne Homes is here to simplify the process. We specialize in purchasing lien-affected properties for cash, eliminating the stress of resolving liens yourself. You can sell your home to us as-is, no matter the liens or debts attached. Our streamlined process ensures a quick, hassle-free sale, giving you peace of mind.
Ways Liens Can Be Filed in California
Liens in California can arise through various legal and financial agreements, often tied to debts, contracts or court rulings. Whether voluntary or involuntary, these liens create a legal claim on property, impacting ownership rights, refinancing options and the ability to sell.
Deed of Trust with Promissory Note
When borrowing money and using real estate as collateral, you sign a Deed of Trust alongside a promissory note. This creates a voluntary lien, securing the lender’s interest until the loan is fully repaid.
Mechanics’ Lien
Contractors, subcontractors or suppliers can record this lien if they aren’t paid for labor or materials provided to improve your property. To establish a mechanic’s lien in California, they must typically provide preliminary notice within 20 days of starting work.
Abstract of Judgment
If someone wins a lawsuit against you, they can place a lien on your property by filing an Abstract of Judgment. This involuntary lien secures the payment of the court-awarded amount against your property.
How to Verify the Lien’s Validity
If discrepancies or procedural errors are found, homeowners can petition the court to remove the invalid lien. As noted by the California Contractors State License Board, “If the contractor, subcontractor, laborer or material supplier fails to follow any of the specific time frames, you can petition the court to remove the lien.”
Before taking action, it’s crucial to confirm that any lien on your property is legitimate. Errors can occur and sometimes liens are filed improperly.
Review Documentation
Carefully examine all lien-related documents for accuracy, including the amount owed and the lienholder’s information. Ensure that the lien details match your records and that there are no discrepancies.
Consult Legal Counsel
Seek advice from a real estate attorney to assess the lien’s legitimacy and explore possible defenses. An attorney can provide guidance on the best course of action and help you understand your rights.
Challenge Invalid Liens
If you believe a lien was filed in error or without proper cause, you can dispute it in court. As noted by the Franchise Tax Board, “Sometimes there is a mistake and a lien is filed against you in error.”
3 Steps for Negotiating with the Lienholder
Legal professionals at the National Association of Realtors emphasize the importance of negotiation, stating, “If you can’t afford to repay your debt, consider negotiating with your creditor. Lienholders are sometimes willing to clear a lien for less than you owe.”
Engaging in open communication with the lienholder can lead to favorable outcomes. Consider the following strategies.
1. Initiate Dialogue
Contact the lienholder to discuss the debt and explore possible resolutions. Open communication can lead to a better understanding of each party’s position and facilitate a mutually agreeable solution.
2. Propose a Settlement
Offer a lump-sum payment that is less than the total owed. Creditors often prefer a partial payment over prolonged legal proceedings. As suggested by SoloSuit, starting with an offer of 15–20% of the debt can be an effective negotiation strategy.
3. Set Up a Payment Plan
Negotiate manageable installment payments to satisfy the debt over time. Establishing a payment plan can demonstrate your commitment to resolving the debt and may lead to more favorable terms.
How Osborne Homes Simplifies Selling Homes with Existing Liens
At Osborne Homes, we buy houses with existing liens, offering homeowners a straightforward and stress-free solution. Here’s how our process works and what you can expect.
Initial Consultation
Contact us to discuss your property’s details and any existing liens. We’ll listen to your situation and gather necessary information to assess your home’s value and lien specifics.
Property Evaluation
We conduct a thorough evaluation of your property, considering its current condition and market value. This helps us formulate a fair cash offer, taking into account any liens or encumbrances.
Cash Offer Presentation
Based on our evaluation, we present you with a no-obligation cash offer. Our offers are transparent, with no hidden fees, ensuring you understand the net proceeds you can expect.
Acceptance and Agreement
If you accept our offer, we’ll proceed with a purchase agreement outlining the terms of the sale, including the handling of existing liens.
Lien Resolution
We coordinate with the lienholders to settle outstanding debts using the agreed-upon sale proceeds. This ensures clear title transfer and relieves you from the burden of unresolved liens.
Closing Process
We handle all necessary paperwork and legal requirements, streamlining the closing process. Our goal is to make the transaction as smooth and efficient as possible.
Finalizing the Sale
Once all conditions are met, we finalize the sale and you receive the remaining proceeds promptly.
Frequently Asked Questions About Property Liens
Can a tenant put a lien on a property?
Typically, tenants cannot directly place a lien on your property unless they have secured a judgment from a lawsuit related to disputes, such as security deposit or habitability issues.
Can a family member put a lien on my house?
A family member or another individual can place a lien on your house, but only after obtaining a court judgment. Personal disputes must go through the legal system to result in a lien.
Can a loan company put a lien on my house?
Yes, loan companies can place liens on your home if your debt obligations aren’t met. Mortgages and home equity loans naturally secure liens against your property until the debt is paid.
Can I put a lien on my own property?
Yes, homeowners can place a lien on their own property, often referred to as a “voluntary lien.” This typically occurs when securing a loan or mortgage, where the property serves as collateral.
Can a lawyer put a lien on my house?
Yes, an attorney can place a lien on your property, known as an “attorney’s lien,” for unpaid legal fees, provided certain legal requirements are met.
Can I sell my house with a lien in California?
Yes, you can sell a home with liens, but they must be paid off or resolved during the sale. At Osborne Homes, we specialize in buying properties with liens, handling these complications for you.
Let Osborne Homes Simplify the Process
Facing a lien on a house can feel like being trapped—but we provide a straightforward way out. Sell your California home as-is to Osborne Homes and avoid the hassle, uncertainty and financial strain that liens cause. Our team manages all complexities, allowing you to quickly and confidently move forward.
Ready to Sell Your Lien-Affected Property Fast?
Contact Osborne Homes today—we’ll handle the liens, you receive cash quickly and you can move forward stress-free.