Texas Release of Lien
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Release of Lien on Texas Real Property
If there is a lien on Texas real estate property, a Release of Lien may be required to remove the lien before the property can be sold or transferred free of that lien.
Real Estate Liens are used by a creditor or other claimant to publicly assert a legal interest in your property. When a lien is filed, it creates a financial claim against the property.
A lien against real estate is filed by the creditor or claimant in the property records at the county clerk’s office in the county where the property is located.
In most cases, the financial claim against the real estate property caused by the lien must be released before the property can be sold or transferred.
Good to know: Liens are usually paid in the order in which they were recorded in the property records.
If multiple liens exist on a property, each valid lienholder generally has a right to be paid unless a Release of Lien is filed in the property records.
Full vs. Partial Release of Lien
A Release of Lien may be full or partial.
A Full Release of Lien removes the lien from the entire property.
A Partial Release of Lien removes the lien from only a described portion of the property leaving a partial lien on the remaining unreleased portion.
Common Types of Real Estate Liens
A real estate lien claim may be voluntary or involuntary.
Additionally, a lien may be valid or invalid. Even if a lien is NOT legally valid, it must still be formally released or cleared before the property can be sold or transferred free of the lien.
Deed of Trust or Mortgage Lien
A Deed of Trust or Mortgage Lien is the most common voluntary lien.
When a lender finances the purchase of real estate, the loan is secured by a lien on the property. The lien is released when the mortgage is paid in full and the lender files a release in the property records.
Mechanic’s Lien
A Mechanic’s Lien is typically an involuntary lien, although it can become voluntary if the property owner signs a written agreement granting it.
If a contractor, subcontractor, or material supplier has worked on a property and has not been paid, they may file a Mechanic’s Lien against the property.
A Mechanic’s Lien must be voluntarily released by the claimant by signing a Release of Lien. Otherwise, the owner must file a lawsuit asking the court to remove the lien from the property.
Home Improvement Lien
A Home Improvement Lien may also be called a Mechanic’s Lien Contract.
This voluntary lien secures a promise to pay a contractor, roofer, pool company, or other provider of labor or materials used to improve a property.
In most cases, the obligation is transferred to a lender who pays the contractor in full, and the property owner makes monthly payments to the lender.
Property Tax Lien
State, county, city, school district, and other local tax authorities hold automatic liens on all Texas property. These liens are known as Property Tax Liens.
These agencies are not required to file any document for their lien. Buyers and sellers should confirm that all property taxes have been paid before closing.
Unpaid taxes follow the property, not the seller.
IRS Tax Lien
An IRS Tax Lien is an involuntary lien that remains until the debt owed to the IRS is resolved.
If a property owner owes back federal taxes and fails to pay after notice from the IRS, the agency may place a federal tax lien on their property.
Judgement Lien
When a court judgment goes unpaid, the judgment creditor may have the right to place a Judgment Lien on the debtor’s real estate property.
This is an involuntary lien.
Child Support or Alimony Lien
Child Support Liens and Alimony Liens are involuntary liens.
Unpaid child support or alimony may give the recipient the right to place a lien on real estate property. The lien remains in effect until the debt is fully satisfied. These liens may only be released by the recipient.
How to Remove a Lien on Texas Property
If you need to remove a lien on Texas real estate property, the person or entity holding the lien must sign a document releasing it. This document may be called a Release of Lien, Lien Release, or Deed of Reconveyance.
Either a Property Owner or a Lien Claimant may have this document be prepared. The Release of Lien must be:
Once the Release of Lien is properly signed, notarized and recorded, the lien claim is removed from the real estate property. This allows the property to be sold or transferred “free of liens”.
Good to know: If the Lienholder refuses to sign a Release of Lien, the property owner must seek a court order declaring the lien invalid in order to remove it.
What is a Texas Lien Waiver
A Texas Lien Waiver is generally used in construction projects.
A waiver can be partial, conditional, unconditional or required to obtain final payment.
What Is the Difference Between a Release of Lien and a Lien Waiver?
A Release of Lien is a document used to release or remove an existing lien on the property. It is used when a lien has been previously filed against the property. The lien claimant must voluntarily agree to the release and must personally sign the “Release of Lien” in front of a notary. Many Release of Liens are provided by the mortgage company once a mortgage has been paid in full.
For Seller Financing or any other voluntary liens, we prepare a Release of Lien the same day. We include signing and recording instructions with your document.
A Lien Waiver is a written document in which a party waives their right to file a lien against the property in the first place. It is most commonly used in construction or mechanic’s liens. It requires the contractor or subcontractor to waive their right to file a lien against the property so that they can get paid. Lien waivers are generally provided by the owner or their lender.
These documents serve different purposes and may used at different points in the process.
RELEASE OF LIEN prepared for $245
Do you have questions about a Release of Lien? Email Scott directly at scott@texaspropertydeeds.com. Or call 972-960-1850.
R. Scott Steinbach is licensed in the state of Texas. Board Certified by the Texas Board of Legal Specialization in Residential Real Estate Law. AV Preeminent rated by Martindale-Hubble. Peer rated for Highest Level of Professional Excellence.
Texas Property Deeds is a service of The Steinbach Law Firm.
The Steinbach Law Firm is a Texas Real Estate Law Firm. We prepare all documents for any real estate transaction in Texas.
