Own Luxury Homes®
Property Liens: Types, Priority, and How to Clear
Lien attaches to property not person; buyer inherits undiscovered liens. 6 types: mortgage (voluntary), property tax (super-priority beats mortgage), IRS lien, mechanic's lien (90-day post-closing risk), judgment lien, HOA lien. Priority: tax lien first → HOA superpriority (CO/NV/WA) → first mortgage. Mechanic's lien risk: request lien waivers from all contractors before closing on renovated properties. Own Luxury Homes® 12-Point Agent Integrity Audit™ — lien waivers on every renovated property.
Own Luxury Homes® is a licensed real estate brokerage, not a law firm. The information on this page is provided for educational purposes only and does not constitute legal advice. Real estate law varies significantly by state and jurisdiction. Nothing here creates an attorney–client relationship. Before acting on any legal, title, zoning, or ownership matter, consult a licensed real estate attorney in your state. If you need a referral, our specialists can point you in the right direction.
Property Liens Complete Guide: Types, Priority, How They Affect Your Sale, and How to Clear Them
A lien is a legal claim against a property that serves as security for a debt or obligation. The critical thing to understand about liens: they attach to the property, not to the owner. If a prior owner failed to pay their contractor and a mechanic's lien was recorded, that lien follows the property through the sale. You, as the new buyer, inherit the obligation unless it is cleared before closing. Title insurance and a thorough title search are the buyer's protection against this risk.
The Six Primary Types of Property Liens
Type 1: Mortgage Lien (Voluntary)
The most common lien. When you take out a mortgage, you voluntarily grant the lender a lien on the property as security for the loan. The lien is released when the loan is paid off. A mortgage lien is a specific, voluntary lien — it applies to this property only and was agreed to by the owner.
Type 2: Property Tax Lien (Involuntary, Statutory)
Placed by the county or municipality when property taxes go unpaid. Property tax liens hold super-priority in most jurisdictions — they are paid before the mortgage lender, before any other lienholder. If property taxes accumulate unpaid, the government can ultimately force a tax sale. Tax liens must be cleared before any title can transfer; a title company cannot insure a property with an outstanding tax lien.
Type 3: Federal Tax Lien (IRS Lien) (Involuntary)
Filed when a property owner owes federal income taxes. A federal tax lien is a general lien — it attaches to all property owned by the taxpayer, not just this specific property. If the IRS has filed a tax lien, they must approve any sale of an encumbered asset. Federal tax liens can complicate closing significantly; they require IRS involvement and a discharge or subordination agreement. Duration: typically 10 years from assessment date.
Type 4: Mechanic's Lien (Statutory, Involuntary)
Filed by a contractor, subcontractor, or material supplier who performed work on the property but was not paid. Mechanic's liens are the most common lien found on properties that recently underwent renovation, construction, or repair. The critical timing: in most states, a contractor has 90 days from last work performed to file a mechanic's lien. This means a lien can be filed AFTER a sale closes if the work was done within 90 days pre-closing. Buyers of recently-renovated or flipped properties face the highest mechanic's lien risk.
Type 5: Judgment Lien (Involuntary)
Created when a court awards a money judgment against a property owner. Once recorded, the judgment lien attaches to all real property the debtor owns in that county. Judgment liens typically remain for 5–20 years depending on state and can be renewed. If a homeowner has a judgment lien against them, it must be satisfied before they can sell or refinance. A title search reveals recorded judgment liens; unrecorded judgments can still be enforced if the judgment was entered and not yet recorded.
Type 6: HOA Lien (Statutory)
Filed by a homeowners association for unpaid dues, special assessments, or fines. HOA liens can have superpriority in some states (Colorado, Nevada, Washington and others) where they are paid before the first mortgage in limited circumstances. In most states, HOA liens are subordinate to the first mortgage but must still be cleared before transfer. A property with delinquent HOA dues will have a title problem at closing if not addressed.
Lien Priority: Who Gets Paid First
When a property sells and the proceeds are distributed, liens are paid in priority order. This matters enormously in short sales, foreclosures, and estate sales where proceeds may not cover all liens.
| Priority Level | Lien Type | Notes | |||||||
|---|---|---|---|---|---|---|---|---|---|
| First (super-priority) | Property tax liens | Government gets paid first in almost all jurisdictions; no mortgage lender can jump ahead of unpaid taxes | |||||||
| Second (HOA super-priority in some states) | HOA lien (limited super-priority in CO, NV, WA, others) | Only in states with superpriority HOA statutes; up to 6 months of dues in Colorado | |||||||
| Third (first position) | First mortgage (recorded date determines position) | First lender to record gets priority over subsequent lenders | |||||||
| Fourth | Second mortgage, HELOC (if recorded after first) | Recorded in order; HELOC subordinate to first mortgage | |||||||
| Fifth+ | Judgment liens, mechanic's liens, other recorded liens | Generally recorded-date priority; mechanic's liens may have statutory priority in some states | |||||||
| Last | Unsecured debts (credit cards, medical bills) | No lien; no property claim; general creditors receive nothing if secured creditors exhaust proceeds | |||||||
| Priority is why a short sale requires lender approval: if the first mortgage is not fully paid, they must agree to accept less. Junior lienholders (second mortgages, judgment liens) may receive nothing. | |||||||||
The Mechanic's Lien Problem: The Risk Buyers of Renovated Properties Face
How Liens Are Discovered and Cleared
| Method | What It Finds | Cost |
|---|---|---|
| Title search | All recorded liens in the public record (county recorder, court judgments, tax records) | $150–$400; conducted by title company or attorney as part of closing |
| Title insurance (owner's policy) | Covers undiscovered liens that title search missed; post-closing protection | $400–1,500+ depending on purchase price; one-time premium at closing |
| Lien waivers from contractors | Prevents future mechanic's liens; must be obtained before closing | No cost; requires seller cooperation |
| How to Clear Each Lien Type | Process |
|---|---|
| Mortgage lien | Pay off at closing from sale proceeds; lender records a release of lien (satisfaction) |
| Property tax lien | Must be paid from closing proceeds; title company coordinates with county; non-negotiable |
| Federal tax lien (IRS) | Pay in full or obtain IRS discharge/subordination; may require IRS negotiation; adds time to close |
| Mechanic's lien | Pay in full, negotiate settlement, or post a bond; can sometimes be disputed if work was defective |
| Judgment lien | Pay in full at closing or negotiate a settlement with judgment creditor; lien must be formally released |
| HOA lien | Pay all delinquent dues, fees, and assessments; HOA issues a satisfaction letter |
“The lien conversation I have with every buyer: "The title search catches most liens. But mechanic's liens on recently renovated properties are the ones that slip through because they can be filed after you close. If you're buying a flip or a recently renovated home, I always ask the seller's agent: 'Can we get lien waivers from your contractors before closing?' A legitimate seller who paid their contractors has no reason to refuse. A seller who hesitates at that question is telling you something important."”
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes®
What is a lien on a property?
A legal claim against real property that secures a debt or obligation. Liens attach to the property, not the owner. When you buy a property, you must ensure all liens are cleared at closing or they become your obligation. Types: mortgage (voluntary), property tax (super-priority), IRS/federal tax, mechanic's (contractor unpaid work), judgment (court award), HOA (dues delinquency).
Can I buy a house with a lien on it?
Yes, but the lien must typically be resolved at or before closing. For mortgage liens: paid from sale proceeds (normal). For tax liens: paid at closing; required before title transfers. For judgment liens: negotiated settlement or full payment. For mechanic's liens: paid or bonded; sometimes disputed. Title insurance protects you from undiscovered liens that slipped through the title search.
What is a mechanic's lien?
A lien filed by a contractor, subcontractor, or material supplier who performed work but wasn't paid. In most states, the contractor has 90 days from last work performed to file. This means a lien can be filed after you've already purchased the property if renovation work was done within 90 days pre-closing. Protection: require lien waivers from all contractors as a condition of closing on any recently renovated property.
Which liens have priority over a mortgage?
Property tax liens hold super-priority and are paid before the mortgage lender in virtually all jurisdictions. HOA liens have superpriority in some states (CO, NV, WA, others) for limited amounts (often 6 months of dues). All other liens are generally subordinate to the first mortgage based on recording date order.
Own Luxury Homes® — lien waivers on every recently-renovated property. 12-Point Agent Integrity Audit™. Talk to a specialist ›
"The introduction Own Luxury Homes® makes is to a specialist with documented closing history in your specific market — not the county, not the metro, the submarket you're actually selling or buying in. That's the standard we verify before your name goes anywhere."
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)