Judgment Lien on Real Estate
A judgment lien on real estate is a legal claim against a property that arises when a court grants a creditor the right to collect a debt owed by the property owner. This lien attaches to the real property after a court judgment has been obtained against the owner, allowing the creditor to secure the debt by placing a claim on the property.
When a creditor sues and wins a judgment in court, they may request the court to establish a judgment lien against the debtor’s real estate. This lien serves as a public record, indicating that the property is encumbered by a court judgment. It effectively prohibits the property owner from selling or refinancing the property without first resolving the debt.
For example, if a contractor completes work on a property and is not paid, they may file a lawsuit and, upon winning, request a judgment lien against the homeowner’s property. If the lien is recorded, the homeowner would face difficulty selling the property until the debt is settled, as the lien must be cleared to transfer clear title to the buyer.
The judgment lien on real estate typically remains in effect for a specified period, often ranging from several years, depending on state laws, and can potentially be renewed. If the debt remains unpaid, the creditor may initiate foreclosure proceedings to satisfy the lien, resulting in the sale of the property to recover the owed amount.
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