Definition of a Real Estate Lien Note

Real estate liens are encumbrances placed on a property that could prevent it from being sold, or could put it as risk for foreclosure. Real estate lien notes are issued from the county clerk's office in your state, and come in several varieties.


Real estate lien notes can come in the form of a judgment filed due to unpaid debt, IRS tax liens, property tax liens as well as mechanic's liens. All of these liens will place a liability on the property that requires these debts be settled prior to the property being sold, or can accelerate a foreclosure on the property depending on the amount owed.


Judgments are court-obtained orders to pay an unsecured debt. Judgments can be filed by any creditor with whom you have defaulted on your agreement to pay. As a property owner, a judgment can place a lien on your property that will require you pay the amount owed in full prior to selling the property. In most cases, judgment liens will not accelerate a property foreclosure.

IRS Tax Liens

The IRS can place a lien against your property for any unpaid taxes incurred over a period of time. If unpaid for a period of years, the IRS can file a notice of foreclosure with your lender and with the county clerk's office, taking your property from you as collateral for unpaid taxes.

Property Tax Liens

Similar to IRS tax liens, unpaid property tax liens can end in the same result. Once property tax has gone unpaid for over six months to a year, the county you owe the taxes to can file a foreclosure notice with your lender and with the county clerk's office. In some states, bringing the property tax account current can wipe the foreclosure notice and keep you in your home.

Mechanic's Liens

Mechanics liens can be filed for work done by a contractor or builder that has not been paid. Mechanic's liens will hinder and prevent the sale or transfer of a property until paid in full. While this does cause an encumbrance to the property, it will not allow for foreclosure acceleration; however, in the event of foreclosure due to other circumstances, mechanic's liens are required to be paid prior to paying any other outstanding debt.