This week, Erik & Randal chat about another term in real estate that has a lot of confusion, "lien".

TRANSCRIPT:

Erik:               Welcome to Stay Focused, Focus Real Estate's weekly video blog. I'm Erik.

Randal:             And I'm Randal.

Erik:               And this week, we are talking about our Word of the Month.

Randal:             What's our Word of the Month this week?

Erik:               It is lien!

Randal:             Lien.

Randal:             Like Eileen?

Erik:               Like Eileen, yeah. Come on Eileen.

Randal:             No, you're not singing.

Erik:               Okay. Lien ...

Randal:             That's why he's in real estate.

Erik:               L-I-E-N.

Randal:             Are you sure the E is not before the I?

Erik:               No, it's not.

Randal:             Oh, it says it right here.

Erik:               L-I-E-N.

Randal:             Okay. What's a lien?

Erik:               The Word of the Month is lien.

Randal:             Yup.

Erik:               What is a lien, Randal?

Randal:             Well, it's a cloud on a title, as far as real estate is concerned. So, it's really something that is placed on a title that creates what they call a cloud, and it makes your title not clean. So, when you talk about a clear title or a clean title, you're talking about a title without any liens on it.

Randal:             And lots of things can end up being a lien on your title. When you're talking about a title, you're talking about your deed. Anything from the water department for not paying your water bill, the tax department for not paying your taxes. Of course the most important lien that we use all the time, nobody ever calls it a lien, is your mortgage. Your mortgage is a lien on your property that allows the bank to take possession of your home if you don't pay your mortgage on time. Other things that can be a lien are ...

Erik:               Condo associations can have a lien on a property. That's why every time we sell, or you're buying, a condo, we get what's called a 6D certificate to say there's no outstanding condo fees due on that property, so the condo association doesn't have a lien on the property.

Randal:             Yup. Another type of lien on a property can be from a contractor, comes and does work on your home, there's a dispute about how much money is owed. That contractor could then put a lien on your property ...

Erik:               Called a Mechanic's Lien.

Randal:             Yeah. And so it's really kind of interesting, because this is always one of my conversations that I have with buyer clients as we're getting close to closing. One of the things that they often get frustrated with is that they tend to get a phone call at the very last minute, usually within the last week before closing, from their attorney, saying, "Oh, by the way, there's a problem. We don't have clear title because of a lien that had been placed on the property." Most of the time, those clouds, or those liens, are from previous discharge of a mortgage when you refinance. But the reason that it happens so late in the process is because an attorney wants to do a review of your title as close to your closing as possible, to ensure that nothing's been put on there at the last minute.

Erik:               If you have questions on that, you certainly can consult an attorney. We're not attorneys, but we are real estate professionals.

Randal:             So, Word of the Month, lien. If you have any other questions about that or anything to add, feel free to comment down below. And thanks for watching Focus' blog this week.

Erik:               So, that's our Word of the Month. If you have any other words, real estate topics or words that you would like us to discuss, comment below.

Randal:             And don't forget to like us on Facebook.

Erik:               And subscribe to our YouTube channel.

Randal:             And until next time, Stay Tuned and Stay Focused.