Mortgages and Liens

A lien is an encumbrance on property, usually to secure the payment of a debt. The most common lien is created when the property owner gives a mortgage on her property to a lender to secure re-payment of the loan. A lien for real estate taxes attaches to the property each taxable year.

In a civil lawsuit, if the plaintiff obtains a money judgment against the defendant, the plaintiff can file a judgment lien against the defendant’s real estate. Also, the federal government, or the state government, can file an income tax lien if the property owner does not pay the taxes due. When a worker helps build or repair a building on the land, or when a supplier furnishes materials for the job, each has a right to file a mechanic’s lien to secure payment for the labor or materials furnished.

In Florida, if the property is the owner’s principal residence, it is homestead property and is exempt from judgment liens and income tax liens.

A foreclosure is a court lawsuit used for the purpose of enforcing a lien or delinquent mortgage. The property is sold under court supervision and the proceeds are used to apply to the mortgages and liens against the property. If any funds remain, which is uncommon, the balance is paid to the property owner after the sale is complete.

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