What is a Lien in North Carolina?
A lien is a legal tool used by creditors and lenders in North Carolina to guarantee debt repayment. Liens are often associated with collateral security that parties can use to secure payment if the indebted party fails to pay or files for bankruptcy.
There are laws at the Federal level and North Carolina State level that define eligibility requirements and the process of getting liens on property in North Carolina. The property represents any item of monetary value that can be used to pay back all pending debt. They include landed property, housing, personal articles of value such as jewelry, bank accounts, etc.
In North Carolina, liens could be general or specific. General liens lay claim to all the assets of the owner. An example is the mortgage liens, where failure to pay leads to the loss of the entire house or vehicle (as the case may be). Specific liens attach claims to the specified property, such as equipment, landed property, and cars. An example is the mechanic liens.
Liens could also be voluntary or involuntary. An involuntary lien means it is without the property owner's consent. An example is a judgment lien established by a judicial order issued by North Carolina courts. Voluntary liens are established with the consent of the property owner.
Are Liens Public in North Carolina?
Yes, North Carolina liens are considered public records and can be accessed by anyone who requests them from their county recorder's office or the courthouses in the jurisdiction where the property is located. State law requires that lien holders file with their local county to protect their claim against the debtor's assets.
Types of Liens in North Carolina
In North Carolina, liens are involuntary or voluntary and general or specific.
A lien is specific when it is attached to a particular item owned by the debtor, while it is general when it applies to every property possessed by an individual. Furthermore, a lien placed on a property due to a loan is called a voluntary lien. Hence, if the individual defaults on loan repayment, the creditor can take over the property. Mortgage and car repayment are typical examples of voluntary liens.
Liens may also arise from a lawsuit. For example, if an individual has a judgment against another person, the court can allow the individual to place a lien on such person's property. A lien of this kind is an involuntary lien. Tax lien, judgment lien, and construction or mechanic lien are the most common types of involuntary liens in North Carolina.
How Do I Check for Lien in North Carolina?
Liens are part of public records in the state of North Carolina. They are available to whoever is interested in them. There are three ways to check if a property has a lien.
- Any willing individual can check with the county recorder, county assessor, or the county clerk's office where the property is located. Individuals can do this online by searching these offices' websites and checking the property records. The online search only requires an address. On the other hand, if the property is situated in a rural area, one may physically need to visit the county courthouse or the specific office. Likewise, individuals may choose to call the respective office concerning a particular property
- An individual may decide to consult the services of a title agent. A title agent has expertise in property title, locating liens, and documenting the entire history of homes. However, consulting a title agent comes with a specified fee
- Many companies offer title and property lien searches online. An individual can decide to search using the tools provided by any of these companies. Using the services provided by these companies also comes with a cost.
Free Lien Search in North Carolina
Different agencies manage different public records in North Carolina. Each of these agencies provides free lien searches within their jurisdiction in the state to interested individuals. Therefore, any individual interested in liens and other records in North Carolina can visit the county register of deeds office or the superior court's office's county clerk to inquire about a property lien. Also, requestors may visit the website of these offices and use the search tool provided on the website to do a free lien search.
However, these agencies charge for the duplication of the documents. Therefore, individuals should prepare to pay this fee to obtain copies of certified records.
What is a Property Lien in North Carolina?
In North Carolina, most liens are property liens. This is because liens usually have an item of collateral security. Under state law, property available for liens depends on what property is exempt or non-exempt. For example, personal items of value such as wedding rings or health-associated articles of value, life insurance, retirement savings, and personal interests are not eligible to be liened. Also, public property cannot be placed under liened. Instead, there are other means of collateral security for government creditors as stipulated by the law.
Different property liens have different validity time frames and processes in North Carolina, all by legal stipulations.
There is also the subject of priority in getting liens on the property. Usually, government tax liens have a premium position regarding who gets paid first. Private creditors are paid ahead of others depending on the date of filing and the type of lien.
How Do You Know if a Property Has a Lien in North Carolina?
In North Carolina, anyone can find out if a property has a lien attached to it. Interested parties may visit the country recorder's office to inquire about the property or search online using various available search services. Alternatively, the individual may employ the services of a title agent to search out the necessary information about a property.
Property Lien Search by Address in North Carolina
Individuals can conduct a North Carolina property search through government agencies (e.g., the Register of Deeds and assessor's offices) with a property owner's name or a property's address. However, those looking to carry out a property lien search in North Carolina must do so through the Register of Deeds offices or the Secretary of State, the government bodies responsible for recording liens in the state. These offices index property records by property owners' names. As a result, an inquirer only needs a property owner's name to determine if a property has a lien in North Carolina. A property lien search by address is not possible through these agencies.
Locally, members of the public can obtain North Carolina property records online or in person from the Register of Deeds office where the property lies. Online searches can be conducted using real property or land records databases provided by the Register of Deeds.
Free Property Lien Search by Address
Anyone seeking a free property lien search in New Carolina can search land records databases provided by the county Register of Deeds office or the Secretary of State (for federal tax liens). One may also visit these offices to inspect property records for free. As mentioned earlier, these agencies do not offer a property lien search by address. Nonetheless, some privately owned websites provide this service, though a fee or subscription may apply.
What is a Tax Lien in North Carolina?
When a property or estate owner in North Carolina fails to pay taxes, the government places a lien on the property in question. This is called a tax lien. Tax liens are priority liens in North Carolina. The North Carolina Department of Revenue is responsible for ensuring that all taxes are duly paid and that defaulters are penalized. The branch offices (the tax collector's office in each county) publish the names of persons who have not paid real estate and personal property taxes in the previous year. However, a review of the state legislature in 1983 brought about an end to the sale of tax liens in North Carolina. Nonetheless, the property can be sold through a tax foreclosure as a penalty for defaulting in tax payment. A tax foreclosure may follow a judicial process through a mortgage or an 'in rem' approach.
Tax foreclosure is facilitated by the tax collector filing a lawsuit against the property owner in court. The property owner or indebted party is expected to respond to the suit by proving that all tax payments are up to date or paying pending taxes. If none of this is done, the court enters a judgment to have the property sold at a public auction. The sales proceeds will cover delinquent taxes, administrative costs, and fees (N.C. Gen. Stat. § 105-37 4). The homeowner has the chance to redeem the property in a series of 10-day time frames during which someone must enter an upset bid. If there is no upset bid, the court confirms the sale. Homeowners can redeem their property by paying delinquent taxes and other associated penalty costs during the ten-day window period.
The 'in rem' foreclosure process requires the tax collector to file a certificate with the court known as docketing. This filing opens a judgment against the debtor by listing the amount of taxes, interest, and costs being owed. There is a waiting period of ten days during which anyone can file an upset bid. After 30 days of docketing the judgment, the tax collector sends a foreclosure notice through a registered or certified mail to the indebted party. If there is no response within ten days, the tax collector must publicize the notice through newspaper publication or notify the debtor by first-class mail. If there is still no response after three months of docketing, the tax collector files a request to execute foreclosure with the court. The court responds by giving orders to the Sheriff to sell off the property. The Sheriff notifies the property owner of the sale through the standard mail route. The property owner can stop the foreclosure by paying off the debt within the upset bid time frame or convincing the court to set aside the judgment before issuing orders for execution. The latter usually would require the services of a lawyer. One way to set aside the judgment is if the debtor already notified the tax office of a filing for bankruptcy before tax legal action.
Tax Lien Lookup in North Carolina
To find tax liens filed against real property in North Carolina, an individual can request real property (land) records preserved at the Register of Deeds office in the region where the real estate is situated. Inquirers may also search using online databases provided by Register of Deeds offices. On the other hand, one should access the Secretary of State's Federal Tax Lien Search tool to find federal tax liens filed in North Carolina.
Individuals can also perform a tax lien lookup in North Carolina via reputable third-party websites that offer the service.
What is a Mortgage Lien in North Carolina?
A mortgage lien in North Carolina is used for getting credit facilities for essential property such as housing or a vehicle. A typical mortgage lien in North Carolina works thus:
- An intending applicant for credit or loans contacts the agencies in charge of housing and applies for the mortgage house. The idea is to give the house to the indebted party on the agreement of payments over a period of time. ':
- Should the indebted party default, the housing agency can withdraw the ownership of the house from the debtor by way of foreclosure. Homes under mortgage liens have special consideration when deciding what property to sell off in a Chapter 7 bankruptcy filing.
- If there are multiple liens on a house, mortgage liens of this nature take priority over others, the exception being tax liens. Mortgage liens are a tool for acquiring property in the absence of bulk cash to pay for them.
What is a Mechanics Lien in North Carolina?
A mechanic's lien in North Carolina is suited mainly for construction projects. Contractors, artisans, suppliers of materials all use a mechanic's lien as a legal instrument for guaranteed payments for their service deliveries. Mechanic's liens are also known as construction liens or materialmen's liens. It is different from mortgage liens in that it is involuntary and mostly general concerning construction projects. There are laws of the state that guide the interpretation and procedure for getting a mechanic's lien in North Carolina. A mechanic's lien ensures that the property cannot be transferred to another until payment is completed. Note that public property cannot acquire a mechanic's lien in North Carolina. Instead, other procedures guarantee payment for services by the government, such as a bond claim.
The following are requirements to file a mechanic's lien in North Carolina:
- The contractor must have completed the project. The time limit is 120 days from the date of completion. Liens filed after this time are not enforceable.
- Filings must be in the county where the project is located. Wrong filing locations will invalidate the enforceability of the lien.
- Lien applicants must notify involved persons of their intention to get a lien on the property. However, there is no specified time to complete this process. Parties include the client, general and subcontractors, suppliers, and lending agencies.
- Mechanic lien holders must file a suit in the county address of the project to enforce it. Lienholders must file within 180 days from the last date of service delivery. Outside this time frame, the lien loses validity.
The effect of the lawsuit is a threat of impending foreclosure. It is expected that the debtor should take immediate steps to pay up pending payments. After payments, the erstwhile owing party should request the lien to be removed. The lienholder must respond to the request within two weeks by writing to the authorities to release the lien. If the debtor fails to respond, the lien holder can force a foreclosure to sell the property and retrieve their payment. If the debtor has already filed for bankruptcy, it may complicate the process.
What is a UCC Lien?
The Uniform Commercial Code (UCC) is a federal code that provides legal interpretation and procedures regarding business transactions in the United States. The UCC code is adopted by all the states of the country, including North Carolina. A vital advantage of the UCC lien is to ensure priority payment should there be a foreclosure or bankruptcy proceeding. The procedure for getting a Uniform Commercial Code lien is outlined in the law. It is renewable for as long as the indebted party has yet to complete the creditor's payments. UCC liens are valid as construction liens. An advantage is that the forms and processes are universal throughout the country, making them more consistent than mechanic's lien forms.
How to Conduct a UCC Lien Search
Members of the public can conduct a UCC lien search in North Carolina via the Department of Secretary of State's Uniform Commercial Code (UCC) Search tool. This search can also be carried out at the county level if the UCC filing affected real property. For instance, those who seek to conduct a UCC lien search in Wake County can access the Consolidated Real Property Index to locate the filing.
Alternatively, inquirers can send a written request to the Register of Deeds office where the property is located or the Secretary of State's office to obtain a physical copy.
One can also conduct a UCC lien search on any third-party site that makes these records available.
What is a Judgment Lien?
A judgment lien is a court-oriented claim on an indebted party's property that remains attached as a public record until the indebted party completes all payments. In a judgment lien, there must have been a prior filing of a complaint with the relevant court of jurisdiction, the Superior Court. Part of the proceeding should involve the service of the summons and a hearing of the case. Should the complainant win the case, they are granted the right to record a judgment lien against the individual at the state's county land records office. A judgment lien clouds the title deed, making resale or use of a property complex. Judgment liens may be general or specific, and they arise because there is a contract dispute.
What is a Federal Tax Lien
According to U.S. Code § 6321, a federal tax lien is the government's legal claim on an establishment or person's property. A federal tax lien is affixed to a piece of property by the Internal Revenue Service (IRS) when an individual or company fails to pay their federal taxes within a specified time frame. This lien remains on the debtor's assets (even if ownership is transferred) and can usually only be withdrawn after the payment of the due tax. Generally, the IRS has ten years to collect the tax debt after assessment unless this period is extended or suspended (U.S. Code § 6502).
What is a Lien Title?
A lien title represents a lienholder's right to a piece of property owned by an individual or an establishment. It allows the lienholder to establish a legal claim on the property to satisfy a debt.
Where and How to Do a Title Search in North Carolina.
Individuals can perform a title search in North Carolina through the Register of Deeds office in the county where a property lies. An alternative option is to carry out the title search via privately managed databases, title companies, or real estate attorneys.
Voluntary Lien vs. Involuntary Lien in North Carolina?
The critical difference between voluntary and involuntary liens in North Carolina is that voluntary liens are with the indebted party's consent. An example is the mortgage lien for acquiring a house or car. Involuntary liens do not require the permission of the owing party. It is established without the owner's consent.
How Creditor Collects Payment Through a Lien
Whenever a creditor records a lien against a property, the creditor can seize the property or the real estate if the debtor declines to pay the debt and sell the property to offset the debt. In some other instances, the creditor will need to obtain a note of execution that will authorize a sheriff to seize the property or order anyone holding the property to relinquish them. The Sheriff can sell the property and give the proceeds to the creditor.
How Do I Get Lien Removed in North Carolina?
There are different ways to remove a lien based on the type of lien in question. For instance, an individual willing to remove a contractual lien like a mortgage or auto loan in North Carolina can pay the full amount owed and obtain a release on the property. After settling the debt, the individual will apply to get the lien removed and the property released. After this, the court will remove the lien from the real estate or the individual's vehicle.
On the other hand, an individual can challenge a judgment in court. The individual can approach a superior court to challenge a lesser court's judgment to remove the judgment lien. After weighing the available evidence and facts, the Superior Court decides on the validity of the lien. If the judgment favors the individual, the lien will be vacated and the property released.
How Long Does a Lien Stay on Your Property in North Carolina?
The duration of a lien is a function of the type of lien. If a lien is voluntary, the lien will remain until the debtor settles the debt and the property is released. However, for an involuntary lien such as a judgment lien, the lien will last for ten years from when the court gave the judgment. If the debtor refuses to settle the debt within the specified ten years, the creditor can extend the judgment for another ten years and file it at the county where the property is located.
