Liens & Encumbrances

Lien

A legal claim against a property that secures the payment of a debt or obligation.


Definition

A lien is an encumbrance on real property that gives the lienholder a legal right to the property if an obligation is not met. Voluntary liens are created by the owner (such as a mortgage); involuntary liens arise by law (such as a tax lien or mechanic's lien). General liens affect all property; specific liens attach to one property. Property tax liens always have first priority regardless of recording date.

Exam Tip

Property taxes and special assessments ALWAYS have first priority, even over a first mortgage. The exam tests lien priority regularly.

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Liens & Encumbrances

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NY Real Estate Liens

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