What are liens in the context of real estate?

Liens in the context of real estate are legal claims against a property that serve to secure payment of a debt. When a property has a lien placed on it, it signifies that the property is collateral for a financial obligation. This can arise from various situations, such as mortgages, unpaid property taxes, or judgments, where the lender or creditor has the right to take action against the property if the debt is not satisfied.

The primary function of a lien is to protect the interests of the creditor by providing a claim on the property. If the property owner defaults on the loan or obligation that the lien secures, the creditor may initiate foreclosure proceedings to recover the owed amount through the sale of the property. Therefore, understanding liens is crucial for both property buyers and sellers, as they can significantly impact property ownership and transfer.