Definition: Lien

A lien is a financial claim to property to secure a debt.

When a lien is filed, property is said to be "encumbered by" a lien.

If property is encumbered by a lien it can't be sold until the lien is "satisfied," which means that the debt must be paid off. A lien can be satisfied with a portion of the proceeds of a sale or refinancing.

A lien is filed with the land records office of the county in which the property lies.

Liens are paid out in the order filed. For this reason, if your HOA is owed money by a homeowner, it is prudent to file your lien first, and work through payment options with the homeowner after the lien has been filed.

If an encumbered property is transferred to another owner rather than sold, for example, after the original owner dies, the lien transfers to the new owner.