: Foreclosures :

Tax Lien

It is a lien that is imposed on a property by a government body to secure payment of delinquent taxes owed on real property or personal property.

Unlike personal debts, tax liens on real estate "run with the land"; that is, a property owner becomes responsible for payment even if the debt was incurred by a prior owner.

Repayment of tax liens occur through one of three methods:
Payment may be made by either the property owner or, more commonly, by the mortgage holder using an escrow account. Notice is given both to the property owner and mortgage holder when a tax is delinquent; thus, even if the property owner does not have an escrow account on the mortgage, the mortgage company will still pay the tax and then create an escrow account to recoup the proceeds, since the mortgage company would lose its lien at a judicial foreclosure.

If a property is sold prior to foreclosure by the government body, the lien (which is generally discovered as part of a title search is paid as part of closing costs from the sale proceeds.

• Tax lien sale
• Tax Lien and Tax Deed States

In the event a lien is not paid within a specified time (and after several notices are generally given), on personal property the item is seized and sold at foreclosure sale. On real property, one of two methods may be used: either the property itself may be seized and sold at foreclosure (a tax deed sale), or the lien may be offered to investors with an accompanying right for the investor, after a specified period of time, to institute foreclosure proceedings (a taxlien sale).

• Lien
• What is a Lien

• Bankruptcy
• Foreclosure

This article is licensed under the GNU Free Documentation License.
It uses material from the Wikipedia article "Tax Lien".