What is a Lien in Ohio?
In Ohio, a lien is debt security; it ensures that a creditor's interests are protected and that a debtor holds up their end of a financial or commercial transaction. If a debtor cannot fulfill debt payment requirements or other agreed-upon obligations, the creditor may liquidate the liened asset to recover the outstanding amount.
Liens have different effects and apply to different types of assets. In some cases, especially as it concerns real property, a lien may cloud the property title. Liened properties are very hard to sell or transfer as the lien is attached to the asset and not the debtor. If a person buys a liened real property, the new owner becomes responsible for the lien. While a lien guarantees a creditor a legal claim to a debtor's assets, creditors can only enforce them with a judicial order issued by Ohio courts.
Are Liens Public in Ohio?
Yes, liens are public record in Ohio, and they may be accessed from the county recorder's office in each county. Liens become a public record when they are recorded with the county recorder's office, which is done after a lien has been filed by an individual or business to secure payment of debts such as unpaid taxes or contractor fees. However, liens are not necessarily permanent and may be removed or satisfied depending on the circumstances. To access liens in Ohio, individuals should contact the county recorder's office for their specific county.
Types of Liens in Ohio
There are several types of liens in Ohio, including tax, general and specific liens. Liens may also be categorized as voluntary and involuntary liens in Ohio.
An Ohio tax lien is imposed against the real estate of a debtor following non-payment of taxes. According to the provisions of Ohio Revised Code (ORC) Chapter 5721, Ohio tax liens are deemed general liens considered a priority over other liens and encumbrances.
An Ohio general lien is a general claim against all of a debtor's property in Ohio (Ohio Revised Code (ORC) Chapter 1339). On the other hand, specific liens are filed against a particular property. Ohio Revised Code (ORC) Chapter 1343 imposes an Ohio-specific lien against Ohio real estate and tangible personal property for Ohio personal property taxes unpaid after delinquency.
An involuntary lien arises when a creditor's demand for payment of a debt or the fulfillment of an agreed-upon is refused. Ohio Revised Code (ORC) Chapter 1341 imposes involuntary liens against Ohio real estate and tangible personal property of Ohio residents who default on tax payments.
Primarily, voluntary liens are imposed with the consent of the debtor, while involuntary liens are established following a judicial order. Most liens can be categorized as voluntary and specific (like property liens) or involuntary and general (like tax liens).
How Do I Check for Liens in Ohio?
To check for Ohio liens, interested members of the public may check the records of the Clerk of courts or county recorder in the judicial district where the property is located. Ohio has different types of Ohio liens, such as Ohio mechanic's lien or Ohio construction lien, and a different public office may maintain each type of lien. However, liens filed with county recorder offices in Ohio are usually listed on the recorder's office website.
What is a Property Lien in Ohio?
Property liens attach to a debtor's property, including real estate or other personal property, including artwork, vehicles, or jewelry. When a debtor defaults on a loan agreement, the creditor can make a legal claim to the liened property and repossess or foreclose and sell the property to recover the debt.
Typically, a lien clouds a property title; this means that a debtor may not refinance or sell the property without paying the lien. Properties may be subject to more than one lien; for example, a mortgaged house may also have a property tax lien or a Home Owners Association (HOA) lien. However, property tax liens and mortgage liens are typically prioritized over other types of property liens.
How Do You Know if a Property Has a Lien in Ohio?
Before purchasing a property in Ohio, prospective buyers are advised to check the property's records to ensure its title is clear. If Ohio property is purchased without inquiry on possible liens, then its new owner will be responsible for the debt initially incurred.
To find Ohio out if a property has a lien in Ohio, the buyer must contact the county clerk in the jurisdiction where the property is located. However, if the lien is voluntary (e.g., a mortgage lien), its owner will likely be aware of the lien and may furnish the buyer with the required information. Notwithstanding, buyers must inquire about the title deed from official sources since property owners may sometimes be unaware of liens on their property. Ohio liens are usually recorded in county recorders' offices or Ohio auditor's offices, and their records are deemed public information.
Property Lien Search by Address in Ohio
Property liens are public records in Ohio per the state's freedom of information act. Hence, members of the public can check for liens on real properties in Ohio by contacting the county clerk or recorder of the district where the property is situated. In some counties, lien searches are provided on county recorders' websites. However, these offices typically accept only name search requests (i.e., searches conducted with a property owner's name).
Free Property Lien Search by Address
Although it is possible to conduct property lien searches through county clerk or recorders' offices in Ohio, these offices organize their lien filings by name rather than address. Thus, an individual may have to access a third-party site that offers property lien search services to check for liens using a property's address. While the name searches at the county offices are provided at no cost to the public, an individual may need to pay a fee to check for liens on property with a third-party site.
What is a Tax Lien in Ohio?
The state of Ohio files tax liens against tax delinquents who have outstanding tax payments for an extended period. State residents should pay estate taxes, property tax, income tax, and any other tax as required by state codes; defaulting on tax payments could result in liens and eventual foreclosure. The lien attaches to the property tax delinquents' property, and the state will repossess the property if the debtor fails to meet up with tax payments. Ohio holds tax lien sales; third-party buyers get ownership rights to a property one year after the tax lien sale. The debtor may redeem the liened property in the one year before third-party foreclosure. Third-party tax lien buyers get priority over the debtor's assets. The state may also foreclose and sell the property directly to recover the tax debt. Ohio allows tax delinquents to pay outstanding taxes using payment plans (Ohio Rev. Code § 5721.38). The state must enforce tax liens within 12 years of the lien becoming active.
Tax Lien Lookup in Ohio
Individuals can conduct a state tax lien lookup in Ohio at the county clerk's office in the county where a property lies. Someone attempting to look up federal tax liens can contact the county recorder's office. For instance, the Lake County's Recorder's Office directs users to a search feature where they can input a last name (for individuals) or business name (for companies) to find tax liens attached to a property.
What is a Mortgage Lien in Ohio?
Mortgages give interested parties access to homeownership by allowing them to pay for the property over a period. Although a mortgage is helpful, it also creates a lien on the house. When a mortgagor signs a mortgage contract, such a person agrees to place a lien on the house, thereby making the house collateral for the loan. If the mortgagor fails to meet up with mortgage payments, the mortgage creditor may repossess the liened home and sell the house to recover the outstanding amount.
An Ohio mortgage lien is different from other types of property liens in that a mortgage lien is voluntary; the mortgagor agrees to the lien by taking the mortgage or loan. Mortgage creditors must enforce mortgage liens within 21 years.
What is a Mechanics Lien in Ohio?
In Ohio, contractors, laborers, and material suppliers may file mechanics liens against property owners who fail to make property construction payments, renovation, or repairs. Ohio mechanics liens are involuntary liens; state laws grant contractors the right to file mechanics liens, and a claimant may file the lien without the debtor's knowledge or consent. However, because mechanics liens are statutory, the lien claimant must notify the property owner within 21 days of filing the lien or within 21 days of providing services. Laborers and material suppliers must file mechanics liens within 75 days of providing general labor or supplying materials. Claimants who work on residential property must file mechanics liens within 60 days of providing the service.
Ohio mechanics lien claimants must file lien enforcement action within six (6) years of filing the lien. In Ohio, architects may not file mechanics liens.
What is a UCC Lien?
Uniform Commercial Code liens apply to commercial transactions; a creditor may file a UCC lien as a notice of interest in a debtor's business property or personal property. UCC liens allow creditors to claim liened property as collateral for business financing. The Ohio Uniform Commercial Code guides UCC transactions and liens in the state. Although UCC liens apply to business loans and funding, material suppliers may also file a UCC lien against debtors or parties defaulting on payment in construction. Creditors may take possession of a debtor's business or personal property until they can repay the debt.
How to Conduct a UCC Lien Search
An individual may use the UCC Lien Search site maintained by the Ohio Secretary of State to check for current or lapsed Uniform Commercial Code (UCC) liens in Ohio. Search parameters provided to the public on the site include a financing statement number, business or individual's name, or a secured party's name.
One may also search for UCC liens at a county recorder's office, provided the lien affected real property.
Note: When conducting a UCC name-based lien search, one should also input the aliases, nicknames, or former names used by the search's subject. This allows for an extensive search.
What is a Judgment Lien in Ohio?
When a court delivers a judgment that requires the defendant to pay damages or a predetermined amount to the plaintiff, or when a creditor files a lien against a debtor's assets, the debtor may refuse to comply. Through a judgment lien, the court enforces lien compliance or debt payment. Ohio Judgment liens may apply to different areas; for example, the state may obtain judgment liens against tax delinquents. The judgment lien will attach the debtor's property. Ohio judgment liens only attach to real estate. Creditors in the state may file judgment liens with the Clerk of the Common Pleas Court in the county where the debtor currently has real estate or may have real estate in the future.
What is a Federal Tax Lien
Per 26 USC § 6321, a federal tax lien (sometimes called a silent lien) describes the federal government's legal claim to a taxpayer's property because of overdue taxes, e.g., income taxes. Before a federal tax lien is attached to a property, the Internal Revenue Service (IRS) will assess the debt and issue a notice to the taxpayer. If the entity still defaults in payment, the IRS then places a lien on their property, valid from the assessment date.
While it is not mandatory, the IRS may file a Notice of Federal Tax Lien (NFTL) to notify other creditors of the government's claim.
Once placed on the property, a federal tax lien may only be removed if the tax debtor fulfills their tax obligation, reaches an alternative agreement with the government, or by the lapsing of time according to § 6322. Generally, after assessment, the IRS has ten years to collect the tax debt.
What is a Lien Title?
A lien title is a legal document showing that although a piece of property is in a debtor's possession, the legal rights belong to the lienholder. The lien title ensures that the possessor cannot sell off the property without the consent or knowledge of the title holder. However, if the debtor sells the property, the profit still belongs to the lienholder until the debt is cleared. Lien titles are more commonly seen with vehicles.
Where and How to Do a Title Search in Ohio
Where one conducts a title search in Ohio depends on the property type. Since the county recorder is the custodian of land records in the state, anyone who wants to perform a title search on a real property should query the county recorder's office and provide details (e.g., a property owner's name or property address) that will facilitate the research.
Persons who want to conduct a title search on a motor vehicle, outboard motor, or watercraft whose title was issued in Ohio can access the Ohio Bureau of Motor Vehicles' title search feature. However, it does not reveal if a vehicle was previously titled in another state or jurisdiction.
Title companies can also help people conduct property title searches for a fee.
Voluntary Lien vs. Involuntary Lien in Ohio?
In Ohio, a voluntary lien is consensual; in this case, the debtor willingly performs an action that signifies consent to a lien. A mortgage is an example of a voluntary lien; the mortgagor agrees to put a lien on the house or make the house collateral for the loan by agreeing to mortgage terms. An involuntary lien is not consensual; a creditor typically files a lien without the debtor's knowledge or consent. Statutory liens such as mechanics liens and tax liens are involuntary.
How Creditors Collect Payment Through a Lien in Ohio
In Ohio, creditors can collect payment through a lien by obtaining a judicial order from the state's courts and enforcing the lien. For instance, if a business is owed money under Ohio's Uniform Commercial Code, the creditor may petition the Ohio common pleas court for a lien on the debtor's property. Businesses within state limits can record a UCC lien at the the Ohio Secretary of State office for a fee of $25 plus a small service fee. Registering the Ohio UCC lien requires you to submit information about the Ohio debtor, including name and address or a business ID number.
How Do I Get a Lien Removed in Ohio?
Interested members of the public can have a lien removed in Ohio if they satisfy the state's eligibility requirements for removing it. Requestors must pay all the debt owed or arrive at a payment plan with the creditor and then file a motion to remove the lien. However, if the claimant fails to meet the lien removal requirements, the lien will remain.
In the case of Ohio tax liens, the claimant may complete the tax repayment to have the lien removed or file for bankruptcy to have the debt discharged. While the lien may not be removed during the bankruptcy process, filing for bankruptcy may reduce the debtor's Ohio taxable income and overall Ohio tax liability.
When attempting to remove Ohio liens, claimants are advised to work with assessing officials. Ohio has a Lien Release Program, which is useful for removing tax liens. However, only Ohio county clerks and collection officers can release liens against property in Ohio. The Ohio Department of Taxation and the Ohio Division of Unclaimed Funds is not authorized to discharge Ohio liens. However, these departments can remove Ohio tax liens if they are not attached to real estate.
How Long Does a Lien Stay on Your Property in Ohio?
A lien will stay on a property in Ohio for approximately five years. However, the length of time typically varies with the type of lien, and the state of Ohio has different rules for lien expungement based on the type of lien.
A mechanics lien will expire five years after being filed with the Ohio Secretary of State, Ohio Department of Commerce, or Ohio Attorney General. Liens filed against real estate in Ohio also expire five years after being recorded by a county recorder's office, Ohio Secretary of State, or Ohio Department of Commerce. Construction liens most often expire five years after being filed with the Ohio Attorney General's Ohio lien registration system. However, liens for child support, restitution, and unpaid tax assessments do not expire because they are enforced by other laws outside of Ohio lien law.
An Ohio lien recorded with a county recorder's office expires five years after being filed unless it was recorded as a lis pendens. A Lis pendens is a written notice that involved property may be sold by Ohio sheriff's auction to satisfy liens. Ohio lis pendens do not expire.
