What is a Lien in Maryland?
A lien in Maryland is a legal claim or encumbrance on a debtor's property to secure a debt obligation or repayment. When recorded against a property, it gives creditors or lenders the right to that property if the debtor fails to satisfy debts. It also prevents the debtor from selling, refinancing, or transferring the property easily until the title has been cleared or released.
A lien can be placed voluntarily or involuntarily on a person's property. However, it can also be specific or general. When it is specific, it is attached to a particular asset. When attached to any asset, it is general. Debtors who fail to pay off debts can have their properties sold or repossessed by lien holders to settle debts. However, creditors cannot enforce a lien without a judicial order from a Maryland court.
Are Liens Public Record in Maryland?
The provisions of the Maryland Code state that all lien claims must be recorded in the appropriate public land records office. This makes liens in Maryland a matter of public record, accessible by anyone who queries the custodian office.
Types of Lien in Maryland
A lien guarantees the repayment of a debt or the fulfillment of a financial obligation, and it comes in different forms. The following are types of Liens in Maryland:
- Mechanics lien: Contractors or subcontractors can attach this type of lien when they are not paid for services rendered. For example, a repair or storage facility can establish a mechanics lien against a vehicle if the owner owes the repair or storage fee and leaves the vehicle with the facility for an extended period.
- Judgment lien: In Maryland, a judgment lien is attached to an individual's real estate to collect a judgment award.
- Vehicle lien: This lien gives a creditor the authority to repossess a vehicle if the owner fails to repay a loan.
- Tax lien: This type of lien arises from unpaid taxes. For instance, once an individual owes a minimum of $250 on property taxes, a lien can be placed on the person's property.
- Lien for unpaid wages: Employees with outstanding wages may file a lien against certain properties of their employers.
All liens can be categorized as statutory or consensual. Statutory liens (also referred to as involuntary liens) result from state laws and do not require a debtor's consent to be attached. An example is a tax lien.
On the other hand, consensual liens (also called voluntary liens) result following an agreement between two or more parties. Examples of consensual liens include home mortgages, car loans, and other transactions that involve credit agreements.
How Do I Check for Liens in Maryland?
Anyone can check for liens in Maryland by contacting the Department of Land Records, located in the circuit court clerk's office of the county where the property is located. This department records and maintains land records, including liens on real properties.
Individuals can also search for lien records online using the Maryland Land Records site. The service is free, but one must have an account to access it.
In addition, interested parties can check for liens placed on vehicles in Maryland by contacting the Motor Vehicle Administration.
Lastly, an individual can use the judiciary's Judgment and Liens Search portal to find judgment liens perfected in the state.
Free Lien Search in Maryland
In Maryland, liens records are designated as public under the Public Information Act (PIA). As a result, the public can search for and review these records without paying money to the custodial government agency. Besides visiting an agency during working hours to examine liens, an individual can also remotely search for real property liens using the Maryland Land Records database.
What is a Property Lien in Maryland?
In Maryland, a creditor attaches a property lien to a debtor's real or personal property to guarantee payment of debts. Different kinds of liens can be placed on a person's property. As mentioned previously, some liens are specific to a property, while others hold all of the debtor's assets as security for redeeming a financial obligation. These liens include judgment, mechanics', tax, and UCC liens, among others.
How Do You Know if a Property Has a Lien in Maryland?
Different government agencies are responsible for recording liens in Maryland. Hence, anyone who wants to know if a property has a lien attached can contact the agencies for information. Usually, an inquirer will need to know the property's details (e.g., location, book, and page number) and the owner's name and then find the appropriate office to retrieve the relevant records.
In some cases, a debtor will be informed before the lien's placement, either because they agreed to the lien or the law mandates notification. However, no notice may be sent to the debtor, and the lien will only be discovered when transacting with the property.
Property Lien Search by Address in Maryland
Different types of liens can be on a property, and different record custodians maintain each lien. However, it is common to find property liens at government agencies that maintain land records in Maryland. Hence, anyone can easily request to view or obtain copies of property liens because they are public records. Most government agencies do not have online tools where individuals can find property lien search by address. However, requesters can visit the appropriate record custodian in the county where their property is located to inquire about how to find liens on a property by its address.
Free Property Lien Search by Address
Most government agencies that maintain land records have online tools where a person can conduct a property lien search in Maryland for free. However, their search options do not include address searches. Contact the appropriate record custodian to inquire about how to check for liens on a property by its address.
What is a Tax Lien in Maryland?
An individual who refuses or fails to pay taxes may be subject to a tax lien in Maryland. The federal or state government can issue this lien to claim a debtor's property legally. This lien permits the government to confiscate real or personal assets to resolve tax debts. The Internal Revenue Service (IRS) collects taxes owed to the federal government; the Comptroller of Maryland (COM) has this responsibility within the state.
Tax Lien Lookup in Maryland
A Maryland resident can find a property tax lien at the local County Finance office where the property is located. Most County Finance offices have online tools where property buyers can search for tax lien information before purchasing a property in the county. Alternatively, tax lien requests can be made in person at the Finance Office in the county where the property is located.
What is a Mortgage Lien in Maryland?
When an individual buys or refinances a home by taking out a mortgage loan, a voluntary lien is placed on the buyer's property. Another name for it is a "mortgage lien". The mortgage loan allows debtors to pay back predetermined amounts to the creditor until the property is paid in full. Nevertheless, because a lien is automatically attached to the debtor's property, it authorizes the creditor to foreclose the property if the buyer fails to make regular payments.
What is a Mechanics Lien in Maryland?
Contractors, subcontractors, and labor/material providers file mechanics' liens in Maryland to secure payment for a construction project or service. This lien allows an owed party to sell the owner's private property to recover unpaid amounts. Md. Code Ann. § 9-102 outlines real properties subject to mechanics' liens, including buildings, lands, bridges, and wharves.
The execution of mechanics' liens in Maryland is regulated by Md. Code Ann. § 9-101 through § 9-114 and Maryland Rules, Title 12, Chapter 300. Thus, to enforce a lien in Maryland, parties entitled to liens must follow procedures established by the laws and rules. Prospective lien holders must file a petition in the Circuit Court for the county where the debtor's property is located. This petition must be filed within 180 days of the project's or service's completion. However, if the claimant is a subcontractor, the entity must send a written notice to the owner within 120 days of the project's completion (Md. Code Ann. § 9-104). The subcontractor must send this notice before filing a claim. It informs the owner of the subcontractor's intent to record a lien against a property. Proof that this notice was sent is a requirement to file a claim with the court successfully.
What is a UCC Lien?
Commercial affairs are governed by uniform statutes across the United States, called the Uniform Commercial Code. When any person secures financing from a loan agency or institution, the lender can file under this code to have a legal claim on the borrower's property and guarantee repayment. By filing, the lender perfects a security interest against the debtor's collateral property and notifies the public of this interest. If the debtor defaults in payment or becomes insolvent, this allows the lender to sell or seize a debtor's real or personal property.
UCC filings in Maryland are submitted to the Maryland Department of Assessments and Taxation. Filing instructions, forms, and fees are available on the UCC Filing Statements page.
How to Conduct a UCC Lien Search
The Maryland Department of Assessments and Taxation is the record custodian in charge of UCC liens in the state. The Department allows a requester to conduct a UCC lien search by name or filing number via an online tool available on their website. Certification fees cost $6 per document and $1 per page. An inquirer who wants to conduct a UCC lien name search must know either the debtor or the secured party’s last or first name. There is also the option of searching by the organization’s name.
What is a Judgment Lien?
A judgment lien is a statutory right afforded to creditors to collect money judgments. This type of lien is non-consensual and occurs when the court adjudicates a civil dispute and rules against the defendant (or judgment debtor). It allows the judgment creditor (plaintiff) to sell or confiscate the debtor's property or interest upon failing to comply with the court's ruling. However, some properties are exempt from sale under state laws.
Judgment liens can be placed on real or personal properties in Maryland. A court judgment only constitutes a lien on a debtor's property when the creditor records it with the Clerk of Circuit Court in the county where the property is located. This applies to every Maryland county except Baltimore City, where the District Court automatically records the judgment.
A creditor can record a judgment with the Circuit Clerk by filing the Request to File Notice of Lien (form DC-CV-035), provided the judgment was issued in the same county where the debtor's property is located. Otherwise, the Request for Transmittal of Judgment (form DC-CV-034) should be filed when the locations differ.
In Maryland, judgment liens are valid for 12 years from the date of recording, regardless of property transfers. However, this judgment can be renewed by completing and filing a Request to Renew judgment (form DC-CV-023). This form cannot be filed after the date of the judgment's expiration. The Maryland Courts' publication: Post-Judgment Collection, has additional information on filing judgment liens in Maryland.
What is a Federal Tax Lien
Per IRC § 6321, a federal tax lien is a legal claim to a person’s property (including any property the person acquires after the lien arises) due to unpaid property taxes. A person in this context simply means an individual, estate, partnership, trust, association, corporation, or company (per IRC 7701(a)(1)). Before a federal tax lien exists, the Internal Revenue Service (IRS) will first assess the taxpayer’s unpaid property taxes. They will then send the taxpayer a Notice and Demand for Payment that explains how much the taxpayer owes. If the taxpayer neglect or refuses to pay the debt in full at the appropriate time, the IRS will then exact a lien on the property.
Per IRC § 6322, a federal tax lien will remain on a taxpayer’s property until it is satisfied or the collection statute expiration date (CSED) has elapsed. Generally, the statute of limitation of a federal tax lien is 10 years (per IRC § 6502). However, certain situations may require that the 10-year collection period be extended or suspended. For instance, the collection period of a federal tax lien can be suspended if a taxpayer goes outside of the United States for a minimum of 6 months (per IRC § 6503(c)).
What is a Lien Title?
A lien title is a lienholder’s legal claim to a person’s property. Individuals who finance their properties should expect liens to be on the titles of such properties. The best way to avoid liens on property titles is to pay for such properties in full at the time of purchase. When a property loan is paid off, the lienholder will send the property title to the lienee as proof that the lien is satisfied. An Individual cannot transfer property with an existing lien to another person without the knowledge of the lienholder. This is because the lienholder must agree to the transfer for the property title to be provided at the time of the transfer. If the property buyer chooses to assume the loan and is not on the original contract, the existing one will be satisfied, and a new one will be recorded for the buyer.
Where and How to Do a Title Search in Maryland
A title search can be done at the state or county level depending on the type of property in question. Most times, title information is usually included in land records. As such, a real property title search can be done at the Clerk of the Circuit Court office in the county where the property is located. However, the clerks cannot perform title searches for requesters. Real property titles are public records and can only be obtained by self-researches.
An Individual interested in performing a motor vehicle title search can do so online or in person at the Maryland Department of Transportation (MDOT) Motor Vehicle Administration (MVA). Businesses and other entities can use the Interactive Driver and Vehicle Record Access tool to retrieve motor vehicle title records. Alternatively, in-person motor vehicle title requests can be done at any of the MDOT MVA locations.
Voluntary Lien vs. Involuntary Lien in Maryland?
In Maryland, debtors can put up their assets as security for a loan or debt or have those properties put up against their will to guarantee payment of debts. These actions represent the striking difference between voluntary and involuntary liens. When anyone takes a loan, it establishes a lien on that party's valuable property or asset to ensure repayment. This is most commonly seen with home or car loans, and in some cases, business loans. However, when the creditor takes action to recover debts because of an unpaid service or unfulfilled obligation, the lien is placed without the debtor's consent and, thus, involuntary - for instance, a tax lien.
How Creditors Collect Payment Through a Lien
Creditors with a lien against someone's property have the legal right to sell such property and use the sale proceeds to settle the debt. However, a creditor cannot sell a property that a debtor co-owns with another person. In this case, the creditor can sell the debtor's interest in the property instead.
How Do I Get a Lien Removed in Maryland?
The most practical way to remove a lien in Maryland is to pay the associated debt in full. Once a debtor pays what is owed, the creditor will file a release to remove the lien from the individual's property. Debtors who cannot pay the total sum may contact the creditor to work out a payment agreement. As a condition of the agreement, the creditor may release the lien.
Furthermore, if the lien is erroneous or unlawful, an individual may counter it in court. Succeeding in this kind of proceeding means that the court will order the lien to be removed. When opting to challenge a lien in court, one can consult with a lawyer specializing in such cases.
How Long Does a Lien Stay on Your Property in Maryland?
The period a lien stays on a property in Maryland is dependent on the type of lien. For example, a tax lien remains on a property in Maryland for 20 years. Meanwhile, a judgment lien is valid for 12 years, and a mechanics lien is enforceable for one year.
However, state law often allows creditors to renew their liens if a debt is not settled within the given period (also called the statute of limitations).
How to Avoid a Lien in Maryland
The best way to avoid a lien in Maryland is to adhere to the provisions of all payment agreements. Furthermore, residents and other people who own property in the state must do well to avoid actions (lawsuits, unpaid taxes, etc.) that could cause lenders to place liens against their properties.
