What is a Lien in Virginia?
A lien in Virginia is a legal security measure used by creditors to ensure the repayment of a loan and for money recovery if the debtor does not pay eventually. A Virginia lien works by giving a creditor a legal right to claim a defaulter's property until the debt is repaid. A loanee cannot sell or transfer an asset that has a lien.
A lien can be established in two ways in Virginia, either by consensual or non-consensual agreement. In a consensual agreement, both parties agree and are aware of the lien terms. Both parties will also select the property for collateral during this agreement. Non-consensual liens do not require a prior mutual understanding, and it involves state law or statute imposition. Examples of non-consensual lien are tax liens, mechanics liens, and judgment liens. A tax lien applies if an entity fails to pay tax arrears, and a judgment lien comes into effect after a court process awards damages. Virginia courts are also responsible for issuing the judicial orders required to enforce a lien.
Are Liens Public in Virginia?
Yes, liens are public in the state of Virginia. According to Section 55-59 of the Virginia Code, a lien is public record and can be accessed by anyone who wishes to do so. Thus, any lienholder has the right to access information about liens held against a particular property or person. Potential creditors may also look up information on liens as part of their due diligence process when considering issuing credit or a loan.
Types of Lien in Virginia.
There are various types of liens in Virginia. They include mechanic's liens, tax liens, judgment liens, etc. However, they can all be categorized as voluntary, involuntary, general, or specific lien.
A lien is voluntary if the lender takes out the claim when the debtor has an advanced debt he voluntarily agrees to. On the other hand, when a person owes the federal, state, or local government unpaid taxes, the government places a lien on such a person's asset or assets; it is known as an involuntary lien.
Similarly, a general lien is a claim by the creditor on all the debtor's assets, while the specific lien has to do with a claim on just one asset.
How Do I Check for Liens in Virginia?
There are various ways interested persons can check for liens in Virginia. They may:
- Check County Records.
Since liens are deemed public record information, requestors may visit the county recorder or office in Virginia or wherever the property is located.
The requesting party must carry along the house address, property title, or serial number so that the property can be easily determined.
- Use An Online Lien Search Tool.
This search is offered by different private and government companies. It is for a required fee depending on the location of the property and the private company; However, government agencies don't charge for this.
Free Lien Search in Virginia.
In Virginia, government agencies that maintain land records provide free lien searches to the public.
An individual can search at the relevant agency's physical location or check if the agency offers a search tool on its website.
The information retrieved from such websites may include:
- Lienee's name and address (Debtor).
- Lienholder's name and address (Creditor).
- Type of lien
- Document or file number
- Recording/filing date
- Status of the lien (active, released, or expired)
- The lien's lapse or expiry date
- Document images (e.g., lien notices, abstracts of judgments, the release of lien)
However, what is available online is not always the complete or official record. It may be necessary to visit the agency's office to review the full report for free.
What is a Property Lien in Virginia?
A property lien in Virginia is a lien that applies only to properties; which is typically the only asset of a debtor upon which a creditor can lay claim for default in repayment is property. Property liens in Virginia are specific to real property such as houses, condos, and cars but do not apply to personal property such as jewelry and art. Almost all liens in Virginia are property liens, except for liens such as wage liens which apply to a debtor's wages as a money recovery asset.
How Do You Know if a Property Has a Lien in Virginia?
Interested members of the public may find out if a property has a lien in Virginia with relative ease. When a voluntary lien is created, the property owner will be aware of the lien because they gave their consent to it. However, finding out about an involuntary lien might be a little tricky.
If the party interested in discovering the property lien is also the debtor, such a person should have already received notice before the lien was filed.
Then again, the debtor may only discover the constraint later on - when trying to sell, transfer, or refinance a property.
The latter can happen if the party changes addresses or receives mail at another address.
In any case, the most efficient way to know if someone's real property (building, home, land) has been liened in Virginia is to run a title deed search through a county recorder's office.
This search reveals who legally owns the real estate or property and if any liens or claims exist on that property.
Property Lien Search by Address in Virginia
A property lien search reveals liens attached to a property. This type of inquiry involves examining public records, and it is typically carried out by individuals interested in purchasing a property. In Virginia, property lien searches can be conducted in the circuit clerk's office where a property is located.
However, circuit clerk's offices in Virginia do not offer a property lien search by address, only name. Anyone interested in a property lien search by address may use a lien search tool provided by a private company.
Free Property Lien Search by Address
Persons interested in a free property lien search can access land records databases provided online by the circuit clerk offices in Virginia. For example, the Virginia Beach Circuit Court Clerk's Office's land records database. The clerk's offices also offer free inspections of land records at their physical locations through public access systems. However, the clerk's offices provide no free property lien search by address service. Anyone wanting to carry out a free property lien search via these offices requires only a property owner's name.
As mentioned earlier, several third-party sites offer interested parties a property lien search by address service. However, there is often a fee or subscription requirement.
What is a Tax Lien in Virginia?
A tax lien in Virginia is initiated by Virginia Tax to recover unpaid taxes from an individual or a business by laying a claim to the defaulter's assets until the entity pays the arrears. Virginia Tax is the agency in charge of tax collection on behalf of Virginia and the State Corporation Commission, which collects for the federal government. A tax lien can affect all the assets of a tax defaulter and not particular property. Virginia's tax liens can apply to the debtor's properties, wages, and bank account.
Tax Lien Lookup in Virginia
Citizens looking to find tax liens against real property in Virginia (for example, liens attached because of unpaid property taxes) should contact the office responsible for recording liens in land records: the circuit clerk office in the province where the real estate is located.
However, for federal tax liens recorded against personal property, individuals should access the State Corporate Commission's Tax Lien Search tool to check for liens on a property.
What is a Mortgage Lien in Virginia?
A Virginia mortgage lien is the security measure institutions provide to other entities for buying or refinancing a house. A mortgage lien in Virginia is a property lien and, as such, is attached to real property. The property on which this lien typically applies is the house being bought or refinanced. If the mortgagor does not pay, the creditor will repossess the home and sell it to recover the loan.
What is a Mechanics Lien in Virginia?
Virginia mechanics liens guarantee the payment of wages to contractors, subcontractors, and sometimes material men and suppliers. It is essential to file for mechanics liens in Virginia before offering a service of repair or construction. Doing this before liquidation will guarantee payment and make the property inaccessible or available for purchase until the contractors and other parties involved receive payment.
According to the code of Virginia 43-3, a mechanics lien is granted to laborers or suppliers whose work value is $150 and above. However, when the claim is for the service of repairs or improvements on an existing structure, there will be no enforcement of lien until the property owner or agent authorizes such repairs and improvements. The code also states that construction companies, subcontractors, or any other individual who provides labor in Virginia without a valid license or certification issued by the board of contractors shall not be entitled to the benefits of a mechanics lien.
A property lien and a mechanics lien are alike as both involve real estate and properties but the purpose for filing sets each apart. A property lien offers creditors possession of a debtor's cars, buildings, or other valuable equipment as collateral for lending. In contrast, a mechanics lien only seeks to protect the payment of what is due to construction companies, material men, and suppliers, as the case may be.
What is a UCC Lien?
UCC means Uniform Commercial Code. The code provides the basis for legal actions involving commercial dealings in the United States of America. The UCC-1 statement is the type of UCC filing that allows creditors to inform the general public and necessary parties that an asset in possession of a debtor is under seizure due to certain contract breaches. A creditor applies for UCC 1 filing right after a loan to secure creditors and avoid loss.
In Virginia, all UCC filings and processing occur in the secretary of state's office. Applicants must fill out the UCC form at the office, make payment, and file the form. UCC-1 filing attracts $20.
How to Conduct a UCC Lien Search
Individuals can conduct a UCC lien search in Virginia using the State Corporate Commission's (SCC) Clerk's Information System (CIS). The required search parameter to obtain information on UCC filings is a debtor's last name or the lien's filing number.
For UCC filings involving real property, an inquirer can contact a local circuit clerk's office to perform the UCC lien search.
What is a Judgment Lien?
A Virginia judgment lien is a type of lien placed on a debtor's property by a court to ensure debt payment. In simpler words, a judgment lien is a lien attached to the outcome of a prior lawsuit that finds a debtor guilty of breaching the terms and conditions of a contract. The court's verdict then allows the creditor to hold the judgment against a borrower's property as collateral. Judgment liens are non-consensual as properties of value are taken from the debtor without seeking permission.
To attach a lien to judgment, the creditor will record the verdict with the county recorder in the locality where the debtor owns a property presently or in the future alongside the debtor's full name, residence, and other necessary details. Liens affect properties like lands, buildings, cars, and valuables. A lien can stay on a property for a maximum of ten years.
What is a Federal Tax Lien
A federal tax lien is a legal restriction placed on an individual's property by the government. A federal tax lien is effective as long as the person fails to pay their tax debt. Following IRC § 6321, the tax lien secures the government's interest in the defaulting taxpayer's real estate, personal property, and financial assets.
A federal tax lien takes effect once the Internal Revenue Service assesses a taxpayer's due balance in the books and sends a notice of the debt and payment deadline to the individual.
If the individual neglects the notice or fails to pay the debt by the deadline, the IRS files a Notice of Federal Tax Lien in public records to inform other creditors that the government has a legal claim over assets the debtor owns or will acquire.
Individuals who desire a withdrawal of the tax lien must pay the outstanding tax. Additional information about federal tax liens is available on the IRS's official website.
What is a Lien Title?
A lien title is a lawful claim to a property because of a debt or outstanding financial obligation. It allows a creditor (or lienholder) to legally repossess a property if the debtor fails to settle the debt. Only when the debt is satisfied can the title be transferred to the property owner completely.
Where and How to Do a Title Search in Virginia
Anyone who wants to purchase real estate in Virginia can check for liens on the property by carrying out a title search on said property. A title search also allows real estate buyers or investors to find out who owns a property or look into the chain of title (all previous owners of a piece of property).
To conduct a title search in Virginia, individuals may visit the circuit court in the region where a property is situated. For example, the Fairfax County Circuit Court. As an alternative, inquirers can employ the professional services of a title search company or real estate attorney.
Voluntary Lien vs. Involuntary Lien in Virginia?
Voluntary liens are void of enforcement since both the creditor and borrower have terms with what property is for collateral. In this case, the debtor is fully aware of the consequences of not paying the loan. Enforcing a voluntary lien is easier since the lender can sell the debtor's property to settle the debt.
In contrast, an involuntary lien requires enforcement and, most times, does not seek the debtor's consent. The action is to assist the creditor concerning the contract and loss. In most cases, the debtors' properties are seized until the debt is settled, and if not, the lender can obtain the right to sell the debtor's properties.
How Creditors Collect Payment Through a Lien
Creditors or Lenders can collect payment through a lien by enforcing a judgment. The debtor may opt to enforce a sale on the property or tell the debtor to sell the property. The returns from the sale of the property will be split between the debtor and creditor, depending on the amount owed.
How Do I Get a Lien Removed in Virginia?
The best way to get a lien removed in Virginia is to complete the debt payment. A letter of satisfaction will be given to the debtor, which will prove that the debt has been satisfied.
Alternatively, debtors may negotiate with the creditor to make a partial pay-off, and this depends on how well the debtor and creditor relate.
Requestors may also ask the court to remove the lien if the debt is valid, but the creditor didn't undergo proper legal procedures when filling the lien.
How Long Does a Lien Stay on Your Property in Virginia?
Virginia liens stay varying lengths of time on a property, and when its statute of limitations elapses, they can be renewed by the lender after a certain period. However, judgment liens in Virginia last for ten years even if the government changes hands. Mechanic liens stay up to ninety days before it expires.
