How To Put A Lien On A House

When an individual owes you money and you do not receive a payment, there are several courses of action you can take. Sending letters demanding payment or hiring a collection agency can work, but if the efforts prove unsuccessful you can always file a lawsuit against the debtor. You can then use a court judgement to attach a real estate lien to the debtor’s home. After the lien is set, the debtor cannot refinance their property without paying off the owed debt first.

5 Steps To Put A Lien On A House

Here are the five necessary steps one must take to put a lien on a house:

1. Check For Statute Of Limitations

Statute of limitations for debt collections will vary by state, so make sure to contact an attorney to learn about your state’s laws. Every state will have specific guidelines for how much time you have to sue another individual for an owed debt. Type of debt owed is another factor that can alter the timeframe of this action, regardless of the state. Knowing the statute of limitations is generally the first step in this legal process.

2. File A Claim In Court

Filing the lawsuit against a debtor in the proper court is essential. Not all courts in each state will have the power to grant specific requests. If you are seeking a small amount of money, then it is recommended that you file in small claims court. Make sure you file in the small claims court that is in the county where the property is located.

3. Serve Court Papers

Serving court summons to the debtor is the proper way to notify someone of an impending lawsuit. You must notify the individual and give him/her time to respond and appear at a hearing, with the chance to present a defense in the case. Not properly serving the court papers and giving the individual a chance to respond could dramatically change the case. The debtor could then have grounds to request the court overturn a ruling in your favor. A debtor can be notified in-person and by certified or registered mail.

4. Attend Court Hearing

Be sure to bring any proof that you have in this case to the court hearing. Proof could include something such as a signed contract by both parties, agreeing to an amount that will be paid. If the debtor does not appear in court or the judge rules in your favor, the court will then grant you a judgement for the debt amount owed. The next step is to request an Abstract of Judgement which is a certified copy that proves the judgement is legitimate.

5. Record Lien

One of the last steps to take is recording the Abstract of Judgement against the property of the debtor. Again, this process will vary by state. Some states may require that you register the document with the Secretary of State’s office or the county’s land records office. This will create the lien against the property. Always be aware of any expiration dates to know how long a judgement lien can last in your state.