Release of Lien Agreement

Release of Lien Agreement

A Release of Lien Agreement is a legal document that formally removes a lien placed on a property or asset. A lien is a legal right or interest that a lender or creditor has in the borrower’s property, granted until the debt obligation is satisfied. The Release of Lien Agreement serves as evidence that the debt has been fulfilled or the obligation has been resolved, allowing the property to be free of the lien.

Typically, the process begins when a debtor pays off the total amount owed to the creditor or fulfills the conditions outlined in the original loan or credit agreement. Once the terms are met, the creditor prepares the Release of Lien Agreement, which is then signed by both parties. This document must include essential elements such as the legal description of the property, the details of the original lien, and the statement confirming that the lien is being released.

For example, if a homeowner borrowed money to finance a home renovation and the lender placed a lien on the property, once the homeowner repays the loan entirely, the lender would issue a Release of Lien Agreement. This agreement can then be recorded with the appropriate governmental authority (such as a county recorder’s office) to officially document that the lien has been removed, thereby protecting the homeowner’s title to the property.