A woman stands with a sold sign next to her property that she sold with a lien on it.

Can You Sell a Property With a Lien On It?

Due to unforeseen circumstances in life, it’s sometimes impossible to pay your bills on time. When you’re a homeowner, there can be serious repercussions to missing these payments, including having liens placed on your home. If you want to sell a property with a lien on it in Florida, Meli can offer guidance and support to make the process stress-free.

What is a Lien?

A lien is a legal claim that is placed on your personal property, like your home. Liens are placed on your home by any creditor you owe money to. This includes the government, banks, businesses, and individuals. Liens allow creditors to collect payments and give them a right to own a part of your property if you fail to make your payments.

Some liens are more common than others. Banks place a lien on your home when you take out a mortgage. The lien protects the bank in case you default on your mortgage payments. Other liens are less common and more serious. Tax liens are only placed on your property if you fail to pay your taxes. A lien can also be placed on your property as part of a legal judgment.

Types of Liens

There are various types of liens that can be placed on your real estate property in Florida:

Judgment liens

Per Florida Statutes Chapter 55, a judgment is a court order that states one party owes another a specific amount of money. In Florida, if the party doesn’t pay the amount owed, the creditor may attach a lien to the individual’s personal property, including real estate. This ensures the creditor is paid from the profits when the home is sold.

Construction liens

A construction lien, also called a mechanic’s lien, may be filed against a property when the owner fails to pay for services rendered, like home repairs or renovations. It’s valid for one year after filing with the county recorder’s office in the county where the property is located.

Mortgage liens

Mortgage liens are a voluntary or consensual lien the homeowner receives when they take out a mortgage for their home. A bank places the lien on their home when the mortgage originates. The lien remains on the property until the mortgage is paid off. Your house is used as collateral by your bank for the duration of your mortgage.

If you default on your mortgage payments, your home may end up going into foreclosure. The mortgage lien gives the bank partial ownership of your home, and they will deduct the debt you owe from the sale of your foreclosed home.

Homeowners that pay their mortgage will have their lien removed once the mortgage is paid or their home is sold. In Florida, mortgage liens are removed from your title within 14 days of the cancellation or completion of the loan.

Tax Liens

Tax liens are a type of statutory lien created by a law or statute in favor of taxing authority. This could be the IRS, the state, or the federal government. A tax lien may be placed on your property by a taxing authority when you fail to pay your debts or taxes, such as property tax.

A couple reviews a letter they received stating that a tax lien was placed on their home.

Can You Sell a Property With a Lien On It?

If you’re struggling to repay your debts, you may wonder, “can you sell a property with a lien on it?” It’s possible to begin the sales process with a tax lien on your home. However, in most cases you’ll need to settle the lien before it’s possible to close.

The challenge in selling a property with a lien on it is locating a buyer willing to deal with this process and the creditors involved. Many buyers and realtors view liens as a significant issue with a home, so you’ll need to consider listing the property as a distressed home. This means the home will be sold in as-is condition, typically below market value.

Work with a homebuyer who specializes in distressed properties and understands the necessity of negotiating with creditors to reduce settlements or secure a release of the liens.

How to Remove a Lien From Your Property

While having liens on your property is stressful, it’s possible to remove these liens. If you’re wondering how to remove a tax lien before selling, the easiest option is to pay the taxes you owe. To make sure everything is settled correctly, it’s important to contact the federal or state government directly, depending on who you owe.

If you cannot pay the debt you owe a taxing authority or a creditor, you can explore other options like:

Setting up a payment plan

You can work with the IRS to set up a payment plan for repayment. Another possibility for settling a tax lien is applying for an Offer in Compromise. This, if accepted, allows you to pay back less than you originally owed.

Contest the lien

If you believe a lien was put on your property in bad faith, you can contest the lien by filing an appeal to have the lien released.

Negotiate a release

You can attempt to negotiate with creditors to obtain a full or partial release of the lien. This can eliminate the lien entirely or reduce the amount you owe.

Running out the statute of limitations

All liens have an expiration date, so in some cases, it’s possible to run out the clock on the lien if you cannot afford to pay back the creditor or taxing authority. For example, a mechanic’s lien only lasts one year in Florida unless the lienor files a lawsuit to enforce the lien before the expiration date.

However, creditors can refile to extend the lien in many cases, so this is not the best method for removing a lien from your property.

Selling your property

You may decide to sell your home to repay the debts you owe and move on with your life. When you take this approach, creditors and taxing authorities will be repaid from your sale profits. You’ll simply have to pay your lien from the profits before the official closing.

A man sits at his laptop and calls someone to get help with the lien on his home.

Let Meli Help You

Working with Meli is your best option if you’re looking to sell a property with a lien on it near Orlando, FL. Meli specializes in dealing with homes with tax liens and selling homes in as-is condition.

We help homeowners walk away from their legally complicated properties to start fresh by buying your home outright or helping you list and sell. Call or text (407) 305-5008, or fill out our online inquiry form to request a consultation today.

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