Voluntary and Involuntary Liens
Updated: Nov 2, 2021
When you're in a real estate transaction, you need to be aware of every little thing, to ensure you secure the best deal for yourself. One of those things you should be mindful of is liens, as they can become a problem if you aren't. In case you didn't know, liens are a financial claim that a party has on another party's property. This means that if you purchase a property that has liens on it, you will 'inherit' its debts (which is why it's recommended that you get a title search before purchasing). If you'd like to learn a bit more about liens and about the two types of liens there are, continue reading.
wo Types of Liens
For starters, there are voluntary liens, in which all parties involved are aware that there is a debt that needs to be paid. One such lien would be a mortgage, in which a lender and a debtor agree that there was a financial exchange that should be settled in a determined amount of time.
The involuntary lien is a bit trickier, which makes it more troubling. This is the name given to liens that the homeowner isn't aware of or that they didn't agreed to. A few examples of involuntary liens: tax liens, child support liens, and construction liens. If you're not careful, these could the whole transaction in jeopardy or end up costing you a lot of money.