What Are 5 Types of Lien

Here are 5 Types of Lien.A lien serves to guarantee an underlying obligation, such as the repayment of a loan. If the underlying obligation is not satisfied, the creditor may be able to seize the asset that is the subject of the lien.

A mechanic’s lien is a legal (statutory) claim against land (or the buildings and the improvements thereon) for priority of payment to one who performs labor or furnishes material for improvement on the land. Sometimes the state statutes name the classes of persons entitled to mechanic’s liens—laborers, mechanics, materialmen, and so on. In some states, such as New York, a material man, laborer, or subcontrac-tor, may not claim a lien for a sum greater than that which is due the contractor at the time the notice of lien is filed. In other states, such persons have a direct lien on the property regardless of the amount owing to the general contractor; in such cases the owner acts at his peril if he makes payments to the contractor without first being sure that claims of subcontractors, material men, and laborers have been paid.

The statutes generally provide that one who has a mechanic’s lien must file a notice of the lien in a public office where deeds or mort-gages are filed and also serve a notice of the lien on the owner of the land. The lienor (the person who asserts the lien) is required to file a sworn statement about the contract he made with the owner or contrac-tor, the work he has done, the materials he has furnished, the property on which the lien is claimed, and certain other details. Once the lien is filed, the lienor may eventually sell the property (at a foreclosure sale) to satisfy the lien.

Judgment Liens.

By statute in the various states, a judgment creditor has a lien for his judgment against his debtor’s land within the jurisdiction of the court rendering the judgment. Generally, this is restricted to the limits of a particular county, but the statutes provide that a transcript of the judg-ment may be filed in other counties; thus, the lien of the judgment may be extended to real estate in other counties.

Attachment Liens

For good reasons—such as when fraud has been committed or when a debtor plans to leave the state in order to defraud his creditors—many states will grant a writ of attachment before judgment is entered. As soon as the attachment is filed, a lien becomes effective against the property attached.

Tax Liens

Many state statutes provide that taxes on land-corporation taxes. inheritance taxes, and others become a lien on real property of the per-son or corporation against whom the tax is assessed. Also, United States Internal Revenue taxes may be made a lien on the real estate of one liable for the taxes, by the filing of a written notice called a tax lien.

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