✅ Quick Summary:
- A lien is a legal claim against a property due to unpaid debts.
- Common types include tax liens, contractor liens, HOA liens, and court judgments.
- A home cannot be sold with a “clean title” unless all liens are resolved first.
- Title companies uncover liens during the title search and ensure they’re cleared.
- Title insurance protects you from hidden or undisclosed liens discovered after closing.
You’ve found the right home. The price is right. The location is perfect. You’re ready to make an offer—and then someone mentions the property has a lien on it.
What does that mean for you as a buyer?
Can you still move forward? Should you?
Liens can sound intimidating, but they’re more common than you might think—and in most cases, they don’t have to derail your transaction. Here’s what you need to know about liens, how they affect home purchases, and how title insurance protects you from potential trouble.
What Is a Lien?
A lien is a legal claim placed against a property by someone who is owed money. Until that debt is paid, the lien stays attached to the property—and can prevent a clean transfer of ownership.
Liens are recorded in public records and essentially act as red flags during a title search. The property can’t be sold with clear title until the lien is resolved.
Common Types of Liens You May Encounter
- Mortgage Liens: If the current owner still owes money on a mortgage, it must be paid off at closing.
- Tax Liens: The IRS or local government may place a lien for unpaid income, property, or other taxes.
- Mechanic’s or Contractor Liens: Filed by contractors or vendors who performed work but weren’t paid.
- Judgment Liens: Result from a lawsuit in which the court awarded money damages against the owner.
- HOA Liens: Arise when an owner fails to pay homeowners association dues or special assessments.
- Child Support Liens: Placed by the court for unpaid child support obligations.
Each of these must be cleared, settled, or legally released before a buyer can receive a clean title.
How Are Liens Discovered?
When you begin the purchase process, the title company performs a title search—a deep dive into public records to uncover any issues, including:
- Recorded liens
- Ownership disputes
- Unpaid taxes
- Errors in previous deeds
- Missing heirs or forged signatures
If a lien is discovered, the title company alerts all parties involved—usually the seller and their agent—and works to resolve the issue before closing.
Can You Still Buy a House With a Lien?
Yes—but only once the lien is resolved. There are generally three paths forward:
✅ 1. The Seller Pays Off the Lien
This is the most common outcome. The lien is paid from the seller’s proceeds at closing, and the title company records a release of lien.
✅ 2. The Lien is Settled or Negotiated
In some cases, a lienholder may accept a reduced amount, and the lien is released through a negotiated settlement. This must be done in writing and confirmed by the title company.
⚠️ 3. You Assume the Lien (Not Recommended)
A buyer could technically accept the property “as-is” with the lien in place, but this transfers all legal and financial responsibility to you. It’s rare and extremely risky—and most lenders and title insurers won’t allow it.
Why You Should Never Close With an Active Lien
If a lien is not properly cleared, you may face:
- Delays in closing or denial of title insurance
- Legal action from the lienholder
- Inability to refinance or sell the home later
- Financial responsibility for someone else’s debt
This is why title companies play a critical role—they ensure that all liens are identified and resolved before you become the legal owner.
What If a Lien Is Missed?
Even the most thorough title search can miss something due to:
- Recently filed liens not yet in the system
- Recording errors or incorrect indexing
- Fraudulent paperwork
- Hidden heirs or forged documents
That’s where owner’s title insurance comes in.
How Title Insurance Protects You from Liens
Owner’s title insurance protects your ownership rights against any future claims or defects—including undiscovered liens. If a lien surfaces after closing that was unknown or improperly released, your title insurance will:
- Cover the legal costs of defending your title
- Pay off the lien if necessary
- Reimburse your financial loss if it affects the value of your property
- Provide peace of mind that your investment is protected
It’s a one-time fee that offers protection for as long as you (or your heirs) own the property.
Real-World Example
Imagine this scenario:
You close on a beautiful home in Virginia Beach. Six months later, a roofing contractor shows up with a mechanic’s lien—claiming he was never paid by the prior owner for work completed.
If this lien wasn’t discovered or cleared, and you don’t have title insurance, you may be on the hook for thousands in legal fees or lien settlements.
With title insurance? Your policy covers the claim—and the stress of dealing with it.
What Buyers Should Do If a Lien Is Found
- Don’t panic. Liens are common and usually fixable.
- Ask for documentation. Request written confirmation of the lien and its status.
- Let your title company take the lead. They’ll work with the seller, lienholder, and agents to resolve it.
- Never assume a lien yourself. Unless advised by a real estate attorney, do not take on someone else’s debt.
- Always get owner’s title insurance. It’s your only safeguard against unknown title issues.
Why This Matters in Virginia Beach
Virginia Beach real estate is active and diverse. From inherited homes to fixer-uppers and investor flips, many properties have complex ownership histories.
Working with a local, attorney-affiliated title company like Stronghold Title ensures:
- You get a thorough and accurate title search
- All liens are addressed before you take ownership
- You’re protected from financial risk—even after closing
Final Thoughts: A Lien Doesn’t Mean “Deal Breaker”
Liens don’t have to kill a deal. But they must be taken seriously and resolved the right way. With the right team behind you—and the protection of title insurance—you can still move forward confidently.