Quick Answer
A lien attaches to a property, not just to the owner, so it generally has to be paid off or released before title can transfer to a new buyer. The title search is how liens get discovered before closing, giving everyone time to resolve them.
- Common types
- Mortgage, tax, mechanic's, judgment
- When it's found
- During the title search
- Who typically clears it
- The seller, from sale proceeds
- Effect on sale
- Usually must be resolved before closing
Common Types of Liens
A mortgage lien is the most familiar example. It's created the moment a buyer takes out a loan, and it's released once the loan is paid off. Tax liens arise from unpaid property taxes or income taxes and can take priority over other claims. Mechanic's liens, sometimes called construction liens, let unpaid contractors or suppliers place a claim on a property they worked on, and judgment liens come from a court ruling in a lawsuit against the owner.
Indiana counties record liens with the county recorder, which is exactly what a title company checks during the title search.
How Liens Get Resolved Before Closing
Most liens are paid off out of the seller's proceeds at closing, and the title company handles getting the release recorded. If a lien is larger than expected, or contested, it can delay or derail a closing until it's sorted out.
This is one reason title insurance matters: it protects the buyer and lender if a lien turns up later that wasn't caught during the search.
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Frequently Asked Questions — Lien
Can I sell a house with a lien on it?
Often yes, as long as the lien is paid off or otherwise resolved at closing, typically from the sale proceeds.
How do I find out if a property has a lien?
A title search performed by a title company or attorney will surface recorded liens; a preliminary check can also be done through the county recorder's office.
What happens if a lien isn't caught before closing?
This is rare when title insurance is in place, since the policy is designed to cover valid claims that surface after closing.
Is an HOA lien the same as a mortgage lien?
Both are liens, but an HOA lien secures unpaid association dues while a mortgage lien secures the home loan; either can affect a sale if unresolved.