✅ Quick Summary:
- A lien is a legal claim against a property due to unpaid debts.
- Common liens include mortgages, deeds of trust, unpaid taxes, contractor bills, HOA dues, special loans governed by the “UCC”, or child support.
- Liens must be resolved before a clean transfer of title can occur.
- Title companies uncover liens during the title search and ensure they’re cleared.
- Title insurance protects buyers from unknown or surprise liens after closing.
Introduction
You’ve found the perfect home, you’re ready to make an offer—and then your agent drops a bombshell:
“There’s a lien on the property.”
For many buyers, the word lien immediately sounds like a dealbreaker. But don’t panic. A lien is serious, yes—but it’s also common and manageable, especially when you’re working with the right professionals.
In this article, we’ll explain exactly what a lien is, how it affects a real estate transaction, and what you should do if you discover one on a home you want to buy.
What Is a Lien on a Property?
A lien is a legal claim placed on a property by a creditor as security for a debt. In short, it means someone is owed money—and the property can’t be sold or transferred with a “clean title” until that debt is resolved.
Common types of liens include:
- Mortgage liens – most common, held by lenders
- Tax liens – placed by local or federal tax authorities for unpaid taxes
- Mechanic’s liens – from contractors who weren’t paid for work on the property
- HOA liens – from unpaid homeowners association dues
- Judgment liens – from lawsuits or court judgments
- Child support liens – from unpaid family court obligations
A lien stays with the property, not the person. That means if you buy a home with a lien on it, you could be responsible—unless it’s properly handled before closing.
How Are Liens Discovered During a Real Estate Transaction?
This is where the title search comes in.
During every real estate transaction, the title company performs a comprehensive search of public records to look for:
- Existing liens
- Unpaid taxes or debts
- Disputes over ownership
- Encroachments or easements
If a lien is found, the title company flags it immediately and works with the seller, their agent, and sometimes attorneys to resolve the issue before closing.
No reputable title company will allow a transaction to proceed without clearing known liens. Some buyers may choose to buy properties with one or more liens but they generally will not be able to get title insurance covering those liens. The title insurance company will generally “take exception” to the lien. This may be a reasonable risk for a buyer if the lien is about to expire. Most liens do not last beyond 20 years in Virginia, but in some circumstances, they can be renewed and extended to 40 years from the original date of the lien.
Can You Still Buy a House With a Lien on It?
Yes—but not until the lien is resolved. There are three main paths forward:
1. The Seller Pays Off the Lien Before Closing
This is the most common solution. The title company or closing attorney ensures the lien is paid using proceeds from the sale. A lien release is recorded, and title can transfer cleanly.
2. The Lien Is Negotiated or Settled
Sometimes, the creditor agrees to accept a reduced payment or payment plan. In these cases, the settlement terms must be fully documented and signed off before closing.
3. The Buyer Assumes the Lien (Not Recommended)
In rare cases, a buyer may agree to assume a lien in exchange for a lower purchase price—but this is risky and should only be done under legal guidance, if at all.
In general, you should never take ownership of a property with unresolved liens.
Why Liens Matter So Much for Buyers
If you unknowingly buy a house with a lien—or the lien isn’t properly cleared—you may be on the hook for:
- Paying off the debt
- Legal fees to dispute the claim
- Losing the home in extreme cases (foreclosure or forced sale)
- Delays in refinancing or reselling the property
This is why title insurance exists. It protects you from liens that weren’t found or properly handled before closing.
How Title Insurance Protects You from Surprise Liens
Even with a thorough title search, there’s always a risk that something is missed:
- A recently filed lien not yet in the public record
- A clerical error in documentation
- A fraudulent lien or forged document
Owner’s title insurance covers these risks by:
- Paying legal costs if a lien is discovered after closing
- Reimbursing you for financial losses
- Defending your right to the property
It’s a one-time cost that provides long-term protection, often extending to your heirs as well.
Real-Life Example: An Unpaid Contractor’s Lien
Let’s say a seller had a new roof installed two years ago but never paid the contractor in full. The contractor files a mechanic’s lien, but it wasn’t recorded properly and doesn’t show up during the title search.
You buy the house and move in, unaware of the problem. Months later, you receive notice of a lien—and the contractor demands payment. In fact, in Virginia as well as several other states, Mechanics Liens may be filed up until 4 months after work is last performed on the Property, which could mean that they get filed after a closing to a new owner!!!
If you have no title insurance? You may be responsible for paying the debt, plus legal fees.
With title insurance? Your policy steps in to cover the cost and defend your ownership rights.
Can a Lien Delay or Cancel Closing?
Yes, it absolutely can—but it doesn’t have to.
The role of the title company is to:
- Identify the lien
- Communicate with all parties
- Coordinate payment or settlement
- Ensure legal releases are recorded
- Issue clear title for closing
In most cases, these issues are resolved within the existing timeline. However, if the seller is unable or unwilling to resolve the lien, the deal may fall apart—or the buyer may need to walk away.
That’s why it’s critical to work with a trustworthy, attorney-affiliated title company like Stronghold Title that knows how to navigate these situations with care and urgency.
What Should I Do If a Home I Want Has a Lien?
Here’s your action plan:
- Ask questions.
If a lien is mentioned, get clear information from your agent or title company. - Get everything in writing.
Make sure any agreement to resolve the lien is documented and signed before closing. - Do not close without a lien release.
Ensure all debts are paid and releases are recorded before transferring ownership. - Get title insurance.
Protect yourself from unknown or future lien issues that may surface.
Virginia Beach Buyers: Why This Matters More Here
In a dynamic market like Virginia Beach, with a mix of vacation homes, rental properties, family transfers, and contractor work, title issues like liens are more common than you might think. Also, Virginia Beach has a significant amount of property owned by retirees or the elderly. Signing a legal and binding deed to a property requires mental capacity and several title claims a year arise due to dementia or other issues that can rob an owner of their mental capacity to sign a deed. It is increasingly rare for Buyers and Sellers to meet at closings in Virginia and the Buyer may never actually meet their Seller.
At Stronghold Title, we bring both local knowledge and legal expertise to ensure that your transaction is safe, smooth, and secure—no matter what’s hiding in the property’s past.
Final Thoughts: Don’t Let a Lien Derail Your Dream Home
Liens can sound scary—but they’re also solvable. With the right team on your side, most lien issues can be resolved without derailing your closing.
Here’s what to remember:
- Liens must be cleared for a clean title
- The seller usually pays or settles the debt
- Title insurance protects you from surprise or hidden liens
- Never assume a lien or skip protection when buying a home