What is a Lien in New Jersey?
A lien in New Jersey refers to an attachment placed on debtors' assets. Typically, the lien attachment allows the creditors, otherwise known as lienholders, to legally recover such assets if the money owed is not repaid at the agreed time. Apart from a creditor lending money and placing a lien on the debtor's collateral property, liens also arise when individuals owe a certain amount for services rendered. Usually, the property where the servicemen/contractors performed the service will have a lien until the payment of the outstanding amount.
New Jersey Liens can be attached to buildings, bank accounts, motor vehicles, and other real or personal properties. If the lien is upon a particular asset, it is a specific lien. Such liens usually apply in an agreement between the lienholder and debtor and may involve a specific property used as collateral to secure a loan. However, a lien in New Jersey is a general lien if it is attached to various assets of an individual due to unpaid debts. Liens are typically enforced by judicial orders issued by New Jersey courts.
Are Liens Public in New Jersey?
Per the New Jersey Freedom of Information Act, liens are a matter of public record and can be filed by creditors as a security interest in the debtor's property or assets. Once a lien has been filed, it will appear on the property records for any prospective buyers or lenders. While liens are public records, private or sensitive information may be redacted from the public record, including social security numbers, bank account information and other financial details. When the debt has been paid off, the lien will be removed from public records and credit reports.
Types of Liens in New Jersey
A lien is a claim legally placed on a piece of property, splitting the ownership of the property between a debtor (the lienee) and their creditor (the lienor or lienholder). Usually, this happens when the owner of the said property is unable to pay off a debt. When the debtor pays the debt, the court removes the lien. However, failure to clear the debt may result in the sale or auction of the property, with the proceeds going to offset the debt.
Liens are broadly classified into two:
- Non-Consensual lien or Statutory lien: These are liens meted according to Federal and State laws. They are involuntary, and the lienee has no say over them. Common examples include judgment liens, mechanics liens, tax liens, and Uniform Commercial Code (UCC) lien.
- Consensual Lien: These are voluntary liens that a person takes to secure loans or other credit advances. A typical example is a mortgage lien.
Liens are also classified as specific or general liens. If a lien is attached only to a particular property, it is a specific lien. However, it is a general lien if the lien affects all assets owned by the lienee, including real estate, automobile, and bank accounts.
How to Search for Liens in New Jersey
In New Jersey, liens are public record. Before purchasing a property, the purchasing party must ensure no outstanding liens exist on that property. To search for liens on a property, a person may:
- Search the county clerk's website, using the property owner's name and address of the property. Not every county provides this option because not all counties have their records online.
- Visit the county recorder or clerk's office physically and conduct the inquiries in person. It is necessary to have all information about the property, like the owner's name, property location, etc.
- A person may contact a registered title representative or a title company to assist with the search.
- A person may engage in the use of other third-party websites which provide this service for a fee.
To request a lien search for a Motor vehicle in New Jersey, print and fill out the Application for Title/Lien Search (Form DO-22). Enclose a copy of the form in an envelope, a copy of a valid ID such as a driver's license or any government-issued ID, and the appropriate fee.
The NJMVC charges requestors a fee of $15 payable via money order or check to "New Jersey Motor Vehicle Commission". Mail the documents to:
New Jersey Motor Vehicle Commission
Business & Government Services
225 East State Street
P.O. Box 146
Trenton, NJ 08666-0146
(609) 292-4102
Free Lien Search in New Jersey
New Jersey government agencies that preserve land ownership records and business filings provide free lien searches to the public. An individual can search at the relevant agency's physical location or check if the agency offers a search tool on its website. However, not all counties offer online lien searches.
A requestor may search the county clerk's website using the property's address and owner's name; that is, if the county offers this service.
To conduct an in-person free lien search, visit the county recorder or clerk's office and provide all the essential information about the property; this may include the property address and owner's name.
What is a Property Lien in New Jersey?
A property lien in New Jersey is the legal right that a creditor has to obtain assets owned by a debtor if outstanding debts are not paid. Property liens can be attached to real estate and personal properties until the owners pay off the lien.
A property lien may arise out of a debtor-creditor agreement to use a debtor's property as security to assure the payment of a debt. It may also be involuntarily imposed by a public entity such as a court or taxation authority. Generally, the lienholder can file a lien claim in the appropriate county court.
Examples of property liens in New Jersey include child support, tax, judgment, and mechanics liens.
How Do You Know if a Property Has a Lien in New Jersey?
A property owner or prospective buyer may be unaware that there is a lien on the said property. An efficient way to know if there is a lien on someone's real property is to run a title deed search through the county clerk or recorder's office. This search will reveal the legal owner of the property. It will also disclose if any liens or claims exist on that property. The formalities around this may vary according to the county.
Also, before purchasing a motor vehicle, a person may conduct a lien search. This search will reveal any liens on the motor vehicle, the current lienholder (if any), and their information as listed in the New Jersey Motor Vehicle Commission (NJMVC) database. However, inquirers may only request this search by mail.
Alternatively, the requestor may engage a registered title company to search for liens on a property they wish to buy.
Property Lien Search by Address in New Jersey
In New Jersey, property liens are public records preserved in county clerk or recorder offices. Thus, anyone who wants to find liens on property can visit the county clerk's office to conduct a property lien search. Some county clerk offices (e.g., the Bergen County Clerk's Office) also provide online search tools to check for liens on a property. However, the clerks do not process requests for a property lien search by address; they index their records by grantor/grantee names.
Persons who wish to conduct a property lien search by address in New Jersey may utilize non-governmental websites. Otherwise known as third-party websites, these sites allow inquirers to check for liens on a property by inputting a property's address in a search box. However, inquirers may need to pay a fee or subscribe to access the search feature.
Where an individual cannot visit a county office or access the information online, they may engage a title company to find liens on properties of interest to them.
Free Property Lien Search by Address
The best approach to check liens on property for free is to visit the county clerk's office that keeps records (i.e., the recorder's office where the property is located) or search the office's public records online. Per New Jersey's public records law, inquirers are not charged a fee to inspect public land records for liens. The fee requirement applies when a person wants to obtain copies of the documents. As mentioned above, one cannot perform a property lien search by address through the recorder's offices in New Jersey.
What is a Tax Lien in New Jersey?
A tax lien in New Jersey is a statutory lien that arises due to delinquent taxes. Typically, there are municipality taxes on properties, lands, water, sewer charges, and electricity. Failure to pay taxes leads to the assessment of a continuous lien on such properties.
Per state laws, the failure of the property owner to pay taxes results in the foreclosure of the property by the municipality. A tax sale will then ensue in which interested individuals can purchase the tax sale certificate for the property. The New Jersey laws require every municipality to host an annual tax sale. However, the property owner may redeem any property by paying the overdue tax amount with other associated fees.
Tax Lien Lookup in New Jersey
To look up federal tax liens filed in New Jersey, interested persons can search land records maintained at the clerk/recorder's office in the county where the defaulting taxpayer's real property is situated.
At the state level, the New Jersey Division of Taxation handles the collection of state taxes. When an individual fails to pay taxes to the state, the division files a tax lien with the New Jersey Superior Court Clerk's Office. This recording has the same effect as a judgment entered by the court. As such, inquirers seeking to find state tax liens may contact the clerk's office at (609) 421-6100 to look up tax liens or access the Judgment Records Search portal provided by the New Jersey Superior Court.
What is a Mortgage Lien in New Jersey?
A mortgage lien in New Jersey gives a creditor the legal claim on a particular real property bought or refinanced with a mortgage loan. Typically, the owner agrees to use the real estate as collateral to obtain a mortgage. This results in a lien attachment on the property. The creditor can obtain the property if the debtor fails to repay the loan.
Upon failure to repay outstanding mortgages, a lien mortgage ensures the creditor gets paid from the proceeds of the property's sale. Unlike property liens, a mortgage lien is always a specific lien and is only attached to financed real properties.
What is a Mechanics Lien in New Jersey?
A mechanics' lien in New Jersey provides a remedy for unpaid contractors, subcontractors, or suppliers that rendered labor or materials for a construction project. Under 2A:44A-3 of the New Jersey Code, such persons are entitled to a lien equivalent to the value of services rendered or materials supplied. Mechanics' liens are attached to the debtor's interest in the construction project.
Interested parties must file a mechanics' lien within ninety days following the period that the lienholder last rendered services on the project - the county clerks handle lien claims under their jurisdictions.
What is a UCC Lien?
A UCC (Uniform Commercial Code) lien in New Jersey occurs when a creditor and debtor enter an agreement to ensure the repayment of a debt by placing a lien on the debtor's property.
The creditor can begin the process by filing the necessary UCC lien forms with the Revenue & Enterprise Services Division. UCC liens are placed upon any property as agreed by both parties. The division offers an online search service that provides the general public access to a register of properties with liens in the state. A UCC lien in New Jersey is valid for five years from filing.
How to Conduct a UCC Lien Search
Interested persons can search Uniform Commercial Code (UCC) filings on the state's Division of Revenue and Enterprise Services UCC search website. On the site, inquirers can use a certified or non-certified lien search to retrieve UCC information. Both types of searches are linked with an electronic image processing system that allows for automated retrieval and printing of UCC documents.
Individuals can also conduct a UCC lien search at the county clerk's office or with the clerk's online property search tool to find UCC liens affecting real property.
What is a Judgment Lien?
A judgment lien in New Jersey arises in a civil lawsuit when a verdict is issued in favor of the plaintiff. The judgment will require the defendant to pay a court-ordered sum to the plaintiff. Per Section 2A:26-9 of the New Jersey Code, if the defendant does not make the payment, it will result in a lien placed on the party's real estate or personal property, and the plaintiff will have an interest in such properties. Upon foreclosure of said properties, the plaintiff gets a certain amount from the sale. According to Section 2A:14-5 of the New Jersey Code, a judgment lien in New Jersey remains upon a property for up to twenty years, regardless of a change in the title's ownership.
What is a Federal Tax Lien
A federal tax lien is a legal means the government uses to secure the payment of federal taxes (26 U.S. Code § 6321). Before the Internal Revenue Service (IRS) attaches a federal tax lien to a tax debtor's property, the department assesses the tax debt, then sends a payment notice to the taxpayer stating how much they owe and the deadline for payment. The IRS places a lien on the taxpayer's properties if the individual does not pay by the due date.
What is a Lien Title?
A lien title is a lien holder's right to a property owned by an individual or establishment. It empowers the lienholder to legally reclaim the property if the debtor does not pay the debt.
Where and How to Do a Title Search in New Jersey
Individuals who want to conduct a title search in New Jersey can visit the county clerk/recorder's office where the property lies to search for land records. These records reveal who legally owns a piece of property and any valid claim to the property.
Alternatively, interested persons can use independent services, such as a third-party aggregate site or title company, to conduct a New Jersey title search.
Voluntary Lien vs. Involuntary Lien in New Jersey?
A voluntary lien in New Jersey occurs when the debtor consents to the attachment of a lien on their property. Usually, a mutual agreement exists between the lienholder and the debtor for a voluntary lien to be placed on a debtor's property. These liens include mortgage liens and UCC liens.
In contrast, an involuntary lien, such as tax liens and judgment liens, do not require the owner's authorization before they are attached to a property.
How Creditors Collect Payment Through a Lien in New Jersey
The purpose of a lien is to force the property owner to pay off their debt quickly or provide an alternative recovery for the creditor. A New Jersey lienholder may collect their payment by various means, including physically repossessing the liened property or forcing a sale of the property. If neither satisfies the debt, they may take any other legal action against the property lienee.
How Do I Get a Lien Removed in New Jersey?
In New Jersey, debtors can remove a lien on their property by paying off the debt that led to the lien. After the debtor satisfies a judgment, the debtor or creditor files a judgment satisfaction warrant along with the applicable filing fee of $50 to the county clerk where the initial judgment decision was entered. Once approved, the court cancels the judgment lien and closes the case.
How Long Does a Lien Stay on Your Property in New Jersey?
According to New Jersey laws, a judgment lien in New Jersey remains attached to the debtor's property for 20 years. It may be renewed for another 20 years, even if the property changes hands during this period.
How to Avoid a Lien in New Jersey
The best way to avoid a lien is to adhere to any repayment agreement made with a creditor. Generally, it is best to minimize or altogether avoid debts, whether they originate from one's actions or a lawsuit. This way, no creditor or lender will have a reason to record a lien against a person's property. If, however, a person unavoidably finds themselves in debt, they should seek to work out a manageable payment plan or consult an experienced attorney for alternative options.
