Also known as: liens · encumbrance
Written by attorneys · grounded in primary & secondary sources — see below
A legal right or interest that a creditor holds in another's property until the secured debt or duty is satisfied. The creditor typically holds the interest without taking possession of the property.
Lucy Liu contracted to sell her warehouse to Lars Lindstrom. A prior judgment lien against Lucy remained of record and unreleased at the scheduled closing. Lars refused to proceed because the lien rendered title unmarketable under the contract's title standard. Lucy could not cure the defect before closing, so Lars rescinded the contract.
Leah Lamb served as trustee of a family trust holding commercial real estate. She granted a lien on the property to secure a personal loan from her own bank. Beneficiary Lance Lee discovered the conflict and elected to void the encumbrance. The court set aside the lien because the transaction violated the trustee's duty of loyalty.
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Lorenzo Lugo held a fee simple conditional in farmland. His judgment creditor attached a lien to the land while Lorenzo still possessed the power to transfer it. The creditor later enforced the lien against the property when Lorenzo defaulted. The lien reached only the transferable interest Lorenzo held at attachment.
Legacy Motors supplied seed and fertilizer to a farm operator on credit. The supplier filed a financing statement before the agricultural lien became effective. When the operator defaulted, Legacy Motors enforced its perfected lien against the harvested crops. The lien remained continuously perfected after the initial filing.
A court ordered Levi Lowe to pay ongoing child support. When he fell behind, the enforcement agency placed a lien on his lakefront lot. The agency then directed the sheriff to execute on the property to satisfy the arrears. The lien attached directly to Levi's real estate under the support statute.
After appointment, the personal representative of an estate prepared the required inventory of the decedent's assets. The inventory listed each parcel of real property together with the amount and type of any existing mortgage lien. The representative mailed copies to all interested persons who requested them. The liens appeared on the inventory as required by the probate code.
An unreleased lien constitutes a title defect that prevents the seller from conveying marketable title. The buyer may rescind or refuse to close if the seller cannot remove the lien by the contract deadline.
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A lien is a creditor's nonpossessory interest in property to secure an obligation. Under Article 9 an agricultural lien must both become effective and satisfy the perfection requirements of section 9-310 to be enforceable against third parties.
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A trustee may not grant a lien on trust property for the trustee's personal benefit. Any such encumbrance is voidable by an affected beneficiary unless the trust terms or a court approved the transaction.
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The inventory must list each asset with reasonable detail and state the type and amount of any encumbrance affecting that asset. The representative must send copies to interested persons who request them.
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…compensation. See also Armstrong v. United States , 364 U. S. 40 (1960) (Government’s complete destruction of a materialman’s lien in certain property held a “taking”); Hudson Water Co. v. McCarter , 209 U. S. 349, 355 (1908) (if height restriction makes property wholly useless “the rights of property . . . prevail…