Whether you’re buying or selling a home, it can be a stressful experience even before you discover there is a legal claim against the property. Yet, property liens are a much more common issue than most people realize, and they can create serious problems. In some cases, a lien can delay closing. In others, it can stop the sale entirely.
Liens against a property are usually connected to an unpaid debt. Because the lien is attached to the property, it can follow the home even when ownership changes hands – which is why some sellers don’t even realize the lien is there until the title search happens. Buyers, lenders and title companies generally want liens resolved before a sale moves forward, which is why discovering one late in the process can quickly complicate a sale.
How liens can delay a sale
Several different types of liens may affect residential or commercial real estate, such as:
- Mortgage liens
- Tax liens
- Mechanic’s liens from contractors or suppliers
- Judgment liens from lawsuits
- Homeowners’ association liens
- Child support liens
Before most real estate transactions close, a title company performs a search to confirm the seller has a clear title to the property. If a lien appears during that process, the title company may refuse to insure the transfer until the lien is addressed.
Not all liens are valid. Sometimes liens contain errors or remain attached to a property long after a debt was paid. In other cases, contractors or creditors may file liens improperly or fail to follow Indiana legal requirements.
For example, mechanics’ liens in Indiana are governed by specific deadlines and filing rules. If those requirements are not followed correctly, the lien may not be enforceable. Property owners may be able to challenge invalid liens through negotiation or court action.
Because of this, it is important not to assume every lien is automatically legitimate or unavoidable.
Legal guidance matters when a lien is involved
Liens can become especially complicated when multiple creditors are involved or when the property sale is already under contract. Sellers may suddenly find themselves dealing with title issues, creditor disputes and closing delays all at once.
An experienced real estate attorney can help identify liens early, review whether they are valid and work toward solutions that protect the transaction whenever possible. In some cases, legal action may be necessary to remove or resolve disputed claims before a property can be sold.
