Title Terms: What’s a ‘lien?’

Every industry comes with their own lingo. Whether you’re in the medical, legal, technology, real estate or insurance industries – you’ve got a set of terminology that defines what you do – and to those on the outside looking in, it can seem somewhat overwhelming.  Because Sutherland Title is built on a foundation of trust, respect and transparency, we’re here to help you de-mystify the world of Title Insurance.

To sell or refinance a property, you have to have a clear title.

What IS a lien?

Essentially, a lien is a hold a financial institution or creditor holds against a property that has an obligation to them that has not been met. It’s their security to ensure that the debt they claim is paid. During the process of purchasing a property, a Title Agent researches the home and property to be sure that there home is free and clear of any one else’s claims.

What happens if the Title Company FINDS a lien?

It’s not ideal, but it happens. If and when a Title Agent finds a lien, then the issue needs to be resolved in order to offer a clear title to the buyer. Mechanics liens are one that come up fairly often in relation to property – they’re liens placed against the property by a general contractor before they do any work on the property in a way to ensure that they get paid. If they don’t get paid, they don’t release the lien. If the contractor fails to file that the lien has been satisfied, the lien will still show as active in the search – although many of them expire after an indefinite amount of time.

What happens if the Title Company MISSES a lien?

This doesn’t happen often with Title companies – particularly Sutherland Title. We’re good at what we do. Exceptionally good at what we do. However, that is where the insurance portion comes in.

Rest assured that when you go to closing, if your title insurance company gives you the all clear, it’s their job to stand by that statement.

We provide peace of mind past the closing.