What is a Lien in Massachusetts?
In Massachusetts, a lien is a statutory privilege offered to creditors as a means of securing payment for a debt or obligation. When a lien is placed on a debtor's real or personal property, it can prevent that property from being refinanced by the debtor or sold off to a third party until all debts have been cleared. Essentially, the property becomes collateral that the creditor can repossess and sell upon failure to pay off debts.
A lien can be declared on a property with or without the debtor's knowledge. It can also be placed on any property (general lien) or a specific asset (particular lien) until payment is made. Within the Commonwealth of Massachusetts, a lien is recorded in the local Registry of Deeds office or Secretary of State's office. It can be enforced by civil action in Massachusetts Courts; in most cases, District or Superior courts.
Are Liens Public Record in Massachusetts?
Liens are public in Massachusetts, and interested members of the public may access them on request. The state maintains a lien registry that contains the names of the parties involved in a lien, the date it was filed, and other relevant details, including the amount owed and what property is at stake. These registries are primarily held by county assessors and court clerks in various judicial districts.
Types of Lien in Massachusetts
Generally, debts cause liens. When individuals do not meet their financial obligations in Massachusetts, creditors or lenders can place liens on their properties. A lien guarantees that a debt will be repaid, whether by the debtor's compliance or from a property's sale proceeds.
Creditors can use different types of lien to secure payment from a debtor, and the kind used typically depends on the debt. For example:
- Child support lien
- Tax lien
- Mortgage lien
- Mechanics lien
- Municipal lien
- Judgment lien
Regardless, all liens can be classified as statutory or consensual. A statutory (or involuntary) lien stems from a statute or judicial order. This lien can be filed without a debtor's consent. Examples include tax, judgment, and mechanics liens.
In contrast, consensual (or voluntary) liens usually occur because of a loan or credit. Unlike statutory liens, a debtor's consent is required before the lien can be established. A mortgage lien is a typical example of a consensual lien.
How Do I Check for Liens in Massachusetts?
Liens recorded in Massachusetts can be reviewed through government agencies. For example, the Registry of Deeds and the Secretary of the Commonwealth of Massachusetts offices.
For liens filed with the Secretary of the Commonwealth, interested persons can search the liens database. Searches can be conducted with the record holder's last name or company name, the lien's filing number, filing date, or release date.
On the other hand, residents of Massachusetts can visit the Registry of Deeds to research and find liens attached to real property. Online databases are also provided on the office's website for remote inquiries.
Free Lien Search in Massachusetts
Once perfected, any lien created in Massachusetts becomes a public record under the Commonwealth's Public Records Law. As such, anyone can request the record from the appropriate government agency, which can be the Registry of Deeds, the Registry of Motor Vehicles, or the Secretary of the Commonwealth.
Besides searching lien records for free using a feature on an agency's website, individuals may physically approach the agency during business hours to review such records at no charge. As usual, the only time a fee will be required from a researcher is when their request involves reproducing or printing a record.
What is a Property Lien in Massachusetts?
A property lien in Massachusetts refers to any charge on a debtor's real or personal property to ensure payment of debts. In the Commonwealth, a creditor uses a property lien as a legal means to guarantee that a debtor will keep to an agreed-upon financial obligation or repay monies owed as a result of a loan or services rendered.
Under Massachusetts lien laws, a creditor has the authority to attach a lien to a person's property because of a mortgage, unpaid tax, court judgment, construction service, high-value product, and more. A debtor may also consent to have a lien attached to an owned asset. Nevertheless, the outcome of both actions is the same: the creditor has a priority claim on the debtor's property and can repossess or sell the property if the debtor fails to meet a financial agreement.
How Do You Know if a Property Has a Lien in Massachusetts?
In many instances, someone may not be aware of a lien on their property and may only find out about the encumbrance after attempting to sell or transfer the property. Fortunately, there are ways to know if a property has a lien in Massachusetts to avoid such unpleasant surprises.
Liens are public records in the Commonwealth. As a result, any member of the public can use the following channels to confirm if a property has a lien:
- The county clerk's office: Most liens are filed with the county clerks. As such, anyone who requires information on liens can approach the clerk of the county where the property lies.
- A local title company: A title company runs property searches by checking public records. Through this search, the company will discover any lien attached to the property in question and provide the inquirer with copies of the records.
Property Lien Search by Address in Massachusetts
Properties in Massachusetts encumbered by a lien can be found if one has the property's address or the owner's name. To find liens on a property in Massachusetts, the inquirer has the following options:
- Visit a county registry of deeds office to search land records maintained by the office with a name or address, or search the online land records database provided by the office. Note that this office must be located in the county where the property lies.
- Hire a local title company to perform the property lien search by address.
- Use a third-party property search site.
Free Property Lien Search by Address
To conduct a free property lien search by address in Massachusetts, an individual can visit a county registry of deeds office to inspect land records or access the office's property search tool online. As long as the inquirer is not requesting physical copies of documents, the clerk does not charge a fee to check for liens on property.
In addition, some third-party aggregate sites allow users to find liens on a property at no cost.
What is a Tax Lien in Massachusetts?
A tax lien is a local, state, or federal government declaration on an individual's assets because of unpaid taxes. A lien can be fixed upon any tax, including business, fuel excise, estate, sale and use, property, motor vehicle excise, and income taxes. Typically, a government agency places a lien on a delinquent taxpayer's property when a person refuses to pay tax after being notified of the default. For federal tax liens, the Internal Revenue Service (IRS) is responsible for collecting unpaid taxes. According to the annual report published by the U.S. Treasury, there were 543,604 federal tax lien notices (NTFL) filed in 2019 against defaulting taxpayers in the United States.
In the Commonwealth, the Department of Revenue's Collections Bureau has this responsibility, granted by MGL. c. 62C, § 47. Besides imposing a lien to recover overdue taxes, the bureau also has the authority to suspend a person's driver's license and car registration until the tax is paid. To further motivate payment of overdue taxes, taxpayers who owe over $25,000 to the Commonwealth have their information published on an online tax delinquent list. The listing is accessible to anyone as tax liens become public information when recorded.
Tax Lien Lookup in Massachusetts
Anyone who wants to look up tax liens in Massachusetts may use the liens search tool the Secretary of the Commonwealth of Massachusetts offers. Another alternative to look up tax liens in Massachusetts is to search the land records of the registry of deeds responsible for filing the lien. Typically, a property owner's full legal name is the search word needed to find liens on the owner's property through these offices.
Individuals may search the Department of Revenue's public list of individuals and businesses that owe above $25,000 in taxes to Massachusetts to obtain names of taxpayers who likely have liens on their properties.
What is a Mortgage Lien in Massachusetts?
In Massachusetts, a mortgage lien grants a creditor the legal right to hold a debtor's property until any outstanding debt is paid. Typically, this lien is placed upon a loaned property (home, motor vehicle, etc.) and acts as collateral that the creditor can sell or repossess. Thus, even if the debtor defaults on loan repayment, the creditor can still recover debts.
What is a Mechanics Lien in Massachusetts?
The statutes covering mechanics liens in Massachusetts are outlined under MGL c. 254. A mechanics' lien is designed to secure payment for labor or services executed on privately-owned buildings, lands, or structures to fulfill a written contract. This includes any development, repair, alteration/improvement, or maintenance done on a property. Typically, a mechanics' lien is declared by a contractor, subcontractor, or materialman, without an owner's consent. However, Massachusetts law also permits design professionals (architects, engineers, licensed site professionals, land surveyors) to file a claim. Hence, it is an essential instrument used by artisans to secure payment for their work and any interest or penalties arising from the owner's failure to pay.
To obtain relief under the lien laws, aggrieved parties must follow the rules and procedures of the Commonwealth to record or enforce a lien. Filing or recording requirements vary, depending on whether a contractor, subcontractor, or design professional files the lien. Some requirements for contractors include:
Filing/Recording a Notice of Contract with the local Registry of Deeds within certain time limits:
- 60 days after filing a substantial completion notice,
- 90 days after recording a notice of termination, or
- 90 days after the date the service or work was last performed or provided
Filing/Recording a Statement of Account, specifying the unpaid amounts, with the Registry of Deeds within the following periods:
- 90 days after recording a notice of substantial completion,
- 120 days after filing a notice of termination, or
- 120 days after the date the service or work was completed
Filing a complaint with the Superior or District Court where the structure lies within 90 days of filing the Statement of Account. This step is critical because a lien is not enforceable in Massachusetts without it.
Filing a certified copy of the complaint with the Registry of Deeds no later than 30 days of initiating the claim in court.
What is a UCC Lien?
A UCC (Uniform Commercial Code) lien is a legal claim filed against a borrower's assets to guarantee payment of business debts. Usually, this lien is imposed when a commercial loan is approved for a business. By recording this lien, a specified asset's sale is not feasible until the lender receives payment in full. In Massachusetts, the Secretary of State processes UCC filings. The agency perfects lien in accordance with the Uniform Commercial Code of the Commonwealth. Lenders can file a UCC lien online or by fax. UCC liens can also be recorded at the UCC Division of the Secretary of State's office in Boston, Massachusetts.
How to Conduct a UCC Lien Search
An individual who wishes to conduct a UCC lien search in Massachusetts should access the Secretary of State's UCC Public Search tool. There, the inquirer can find active or lapsed UCC liens by inputting one of the following parameters:
- A business's name
- An individual's last name
- Filing number
What is a Judgment Lien?
In a civil lawsuit, the court issues a final ruling that awards monetary damages to the litigant who incurred a loss or injury. However, the party who the court ruled against (the judgment debtor) may not comply with the court's orders to compensate the prevailing litigant (the judgment creditor). Thus, a judgment lien is used to enforce the court's judgment and force payment. This lien is attached to the debtor's real estate or personal property, except exempt properties. It allows the creditor to sell/seize this property or initiate garnishments to retrieve debts.
To obtain a judgment lien, creditors can file the court judgment with the local Registry of Deeds in the area where the real estate is or will be, or with the town/city clerk for personal assets.
Massachusetts law limits the execution of a judgment lien to 20 years from the date it was rendered.
What is a Federal Tax Lien
As defined under § 6321 of the Internal Revenue Code, a federal tax lien is a legal claim that the government has over the financial assets, real properties, business properties, and personal properties of individuals and businesses that default in paying their taxes.
Usually, before the Internal Revenue Service (IRS) places a tax lien on a property, the department calculates the outstanding taxes and notifies the taxpayer of the debt with a Notice and Demand of Payment. If the person does not pay after a given time, the IRS will file a Notice of Federal Tax Lien, a public record that notifies other creditors of the government's legal claim to the property.
While a federal tax lien means that the government has a valid claim to a property, it does not mean that the government will seize the properties covered by the lien. However, they reserve the right to do so with a levy.
What is a Lien Title?
A lien title establishes a lienholder's claim over a property. It shows that although a property is in a debtor's possession, the creditor (the lienholder) still has a legal claim over that property and can repossess the property if the debtor fails to pay back the loan used to purchase it. After the debtor settles the debt, the creditor clears the title.
Where and How to Do a Title Search in Massachusetts
Where a person performs a property title search in Massachusetts depends on the property type. For instance, should one want to perform a vehicle title search, the person must contact the Massachusetts Registry of Motor Vehicles (RMV). To conduct a vehicle title search on the RMV's website, the inquirer must provide the last eight digits of their Vehicle Identification Number (VIN) or the title number from their vehicle registration. A vehicle title search uncovers any liens on the vehicle, the lienholder's name, the date of title certificate issuance, and the possessor of the title certificate.
On the other hand, to perform a title search on real properties, one should contact the Registry of Deeds Office in the county where the property is located.
Voluntary Lien vs. Involuntary Lien in Massachusetts?
To compel payment of debts in Massachusetts, liens can either be placed on a debtor's property with or without the individual's or entity's permission. When a creditor initiates this action, it is said to be involuntary. The debtor does not need to consent to the lien and may only discover the creditor's interest when trying to sell or refinance the property. However, if the debtor agrees to a lien because of a loan or related financial assistance, it is a voluntary loan. Judgment, tax, and mechanic's liens are three common examples of involuntary liens filed in the Commonwealth. A common type of voluntary lien in Massachusetts is the mortgage lien.
How Creditors Collect Payment Through a Lien
A lien is one of several ways that a creditor can secure a debt repayment. When a creditor attaches a lien to a property, it gives the party a legal right over that property. Until the creditor files the necessary documentation to attest to the debt repayment, the property owner is liable to lose that property towards the satisfaction of the debt. Essentially, the creditor can sell the property and use the proceeds from the sale to settle the debt.
Notably, creditors must only take legal actions when collecting payment through a lien. Otherwise, debtors can sue them for damages.
How Do I Get a Lien Removed in Massachusetts?
A lien remains attached to one's property until the underlying debt is settled or the lien expires. Still, the fastest way to get a lien removed in Massachusetts is by willingly paying up what is owed, including interest, penalties, and other associated fees. Subsequently, the creditor will release the lien.
When unable to pay the debt in full, the debtor may contact the creditor for a payment agreement. Regarding a tax lien, the debtor is advised to contact the Massachusetts Department of Revenue to check if the lien is valid and inquire about repayment programs.
Another way to discharge a lien in Massachusetts, as mentioned earlier, is to wait for the statute of limitation to expire. However, this approach is not usually advisable because the creditor may decide to renew ("extend") the lien while it is still valid.
Furthermore, a debtor may decide to challenge the lien in court (i.e., prove that it is not valid) to remove it from their property. However, the court will only remove the lien if the debtor can provide evidence of its invalidity and the lienholder cannot confirm its legitimacy.
Finally, a person may remove a lien from a property in Massachusetts if the lien originated from a court judgment and was placed on legally exempt property.
How Long Does a Lien Stay on Your Property in Massachusetts?
Usually, consensual liens stay on a property in Massachusetts until the debtor repays the debt. However, a statutory lien is governed by law. Hence, even if the debtor fails to repay the debt, the lien can become unenforceable after a certain period. For instance, a judgment lien established in Massachusetts stays on personal property for 30 days and remains on real estate for 20 years.
How to Avoid a Lien in Massachusetts
Since liens arise from debts, the only way to avoid a lien in Massachusetts is by avoiding owing any lender. Residents are advised to follow any repayment plans made with creditors. Furthermore, if unable to pay back a loan, it is better to quickly approach the creditor to negotiate a convenient repayment plan before the person moves to attach a lien.