Real Property Liens in California
Real property liens are legal claims against real estate owned by another. These liens encumber a property which means that they must be paid before the property can be sold or refinanced unless the lien or liens are assumed by the buyer with the consent of any existing real estate lender. Real property liens can be general or specific. They can also be voluntary or involuntary.
A general lien encumbers all of the property owned by the property owner. For example, if a property owner fails to pay his or her federal or state income taxes, the government can record a lien agent for all of the real property that he or she owns. In contrast, a specific lien encumbers only one property. A mortgage or deed of trust is specific to the property used as security for the loan.
A voluntary lien is a lien-recorded agent of real estate with the consent of the property owner such as a mortgage or deed of trust. An involuntary lien is usually a tax lien, a judgment lien, a mechanics lien, or a lien imposed by a homeowner association.
Following are various types of liens agent real property:
Federal Tax Liens: If a person fails to pay federal income taxes claimed by the government, the IRS can file a general, involuntary, federal tax lien against all of your real property. Taxpayers who disagree with the government's calculation of the tax do not have the right to a trial by jury. The government can lien your real property and seize your bank account after a written notice is provided.
State Tax Liens: The same comments apply to the State of California.
Mechanics Liens: If a property owner fails to pay a contractor or workman who improved his or her real property, subject to limitations, the unpaid party can record a mechanic's lien agent for the property which can be foreclosed. This is a specific, involuntary lien.
Bail Bond Liens: If a homeowner posts bail for someone, a bail bondsman will often obtain a lien agent for the owner's property as collateral. This is a specific, voluntary lien that can be foreclosed if the accused fails to appear in court.
Mortgage or Deed of Trust: This is a specific lien or encumbrance recorded as a voluntary lien to secure a promissory note where the property is used as security to purchase or refinance the property.
Federal Estate Tax Liens: On the day someone dies, a federal estate tax lien comes into existence the lien attaches to all assets of the decedent's gross estate including any real property. This means that before the real property of a deceased can be sold, the personal representative of the estate or the probate attorney needs to obtain a discharge of the federal tax lien from the IRS.
Judgment Liens: This is a lien that results from the order of a court. Judgments become a general lien in a county where an abstract of judgment is recorded in that county. Abstracts may be recorded in one county or all 58 countries in California.
Prejudgment Writ of Attachment: This is an involuntary lien that may be specific or general. A prejudgment writ of attachment may be ordered by a court during litigation before the court renders a judgment. They are not often granted and require the plaintiff to post a bond.
Municipal Utility Liens: This is a specific involuntary lien that results when a property owner fails to pay municipal utilities such as electricity, sewer service, and/or water.