What are liens in the context of real estate?

Liens in the context of real estate are legal claims against a property, typically used to secure the payment of a debt or obligation. When a lien is placed on a property, it serves as a hold that can affect the owner's ability to sell or refinance the property until the debt is resolved. This means that if the property is sold, the lien must be satisfied—usually through payment—before the new owner can take possession free of that claim.

This concept is crucial in real estate transactions, as it can impact the clear title of a property and the owner's financial responsibilities. Liens can arise from various sources, such as unpaid property taxes, mortgages, or contractor services, emphasizing their significance in ensuring stakeholders are compensated for their contributions or claims related to the property. Understanding liens is essential for real estate professionals, buyers, and sellers to avoid unexpected financial obligations during property transactions.