I Want to Lien Somebody

Question: Somebody owes me money and I want to put a lien on their property. How do I do that?

Answer: A lien is a document that gets put on record saying that someone has claimed rights in someone else's property pending the payment of a debt. There are several ways that liens can be placed on real estate in NC, but simply going out and filing a paper that says somebody owes you money is not one of them.

If a person owes you money and you can prove it in a court of law, then the judgment you win in court becomes a lien on any property that person owns, subject to some exceptions. Exceptions include any statuory or constitutional rights that may protect some of their assets from seizure, and the fact that your judgment has to be against both the husband and wife for you to go after certain property they may own together (known in NC as a tenancy by the entirety property).

Another type of lien is a Deed of Trust, or mortgage, that puts property up as collateral for a loan. This type of lien was covered in Post One. The property owner has to agree to let this type of lien be placed on the property.

Governmental liens might come up because taxes or assessments have gone unpaid. The governmental body that wants the lien has to follow certain steps before the lien can be effective.

Certain people who provide material or labor for the improvement of real estate can place what's called, in NC, a mechanic's lien, against the property if they are not paid. There are very strict rules about how this can be done, but it provides some protection for people in the building industry. I believe much confusion about liens may come from misunderstandings about this process, which leads people to believe they can simply file a paper against anyone who owes them money.

No matter how or why the lien was filed, it doesn't do much until you enforce it. You acutally have to take the steps to have the person's property legally seized and sold to produce the cash that is owed to you. However, if the person sells the property in the meantime, your lien is public notice to anyone who buys it that the property is subject to such seizure. Often, this means that you will be paid out of sale proceeds so that your lien can be cancelled.

Once the debt that caused the lien to be filed has been paid, you are obliged to cancel the lien from the public record.

As always, if you still would like more information or want to comment, please feel free to post.