How to obtain lien on a property over unpaid debt


August 21, 2005

Dear Mr. Azrael:

I loaned my daughter $1,600 to close on her house and $1,500 to put a boiler in it. I also let her use a credit card of mine which she took to its $5,000 limit. Now she has become angry with me because I asked her to start paying me back.

How can I go about putting a lien on her house? I am 65 years old, and I need my money.

Dear Reader:

A lien is a claim on a home or other property. If a validly recorded lien is not paid, the lien holder can institute a legal proceeding to sell the property. The proceeds of sale must be used to pay lien holders based on the priority of their lien.

There basically are two ways for you to place a lien on your daughter's house.

Your daughter can voluntarily sign a mortgage. When recorded, this legal document constitutes a lien on the home. All those in title to the property must sign the mortgage. It must be recorded in the land records of the court where the home is located. If your daughter does not pay the mortgage debt, you can foreclose the mortgage and sell the home at a judicial sale. Any prior recorded mortgage or deed of trust will have priority in the event the home is sold.

You may obtain an "involuntary" lien on the home by suing your daughter for the debt. A judgment rendered by a court, if properly recorded, constitutes a lien on real property owned by the judgment debtor.

However, a judgment against your daughter alone would not constitute a lien against property owned by her and her husband as tenants by the entireties in all jurisdictions. Mortgages recorded prior to the date a judgment is recorded have priority over the judgment.

If you obtain a judgment against your daughter in District Court, you will have to record the judgment in the Circuit Court where the property is located to secure the lien. In Baltimore City, the District Court judgment automatically constitutes a lien on the debtor's property.

A judgment lien can be enforced through a legal proceeding in which the home would be sold at a sheriff's sale.

You should be aware that your claims against your daughter may be barred by the statute of limitations if the suit is not filed within three years of the date the loan was made or became due.

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