General Lien

Definition

A general lien is a legal claim that encompasses all the property owned by a debtor. This is unlike a specific lien, which is restricted to a particular piece of property. General liens are typically utilized in situations where there is an overarching claim for debts owed and can cover both real and personal property. If a debtor does not fulfill their financial obligations, a general lien provides the creditor legal grounds to seize and sell any of the debtor’s assets to fulfill the debt.

Examples

Judgment Lien: When a creditor wins a lawsuit against a debtor, they can secure a judgment lien, which applies to all the debtor’s property, both real and personal. If Abel fails to pay three months of rent and moves out, the landlord Baker can obtain a general lien by securing a judgment against Abel. Failure to fulfill the payment can lead to Baker obtaining a specific lien on Abel’s furniture and selling it to recover the owed money.
Estate Tax Lien: Upon a person’s death, if their estate owes taxes, a general lien can be imposed on all the deceased’s properties. This ensures the government can collect taxes from the entire estate if the debt is not settled.

Frequently Asked Questions

Q1: How does a general lien differ from a specific lien?

A1: A general lien affects all of a debtor’s property to satisfy a debt, while a specific lien targets a particular asset, like a house or car, for debt recovery.

Q2: Can a general lien be applied to future assets?

A2: No, general liens typically apply to properties owned by the debtor at the time the lien is imposed, not future assets acquired after the lien’s execution unless specified otherwise under certain legal circumstances.

Q3: How can a general lien impact a debtor’s financial actions?

A3: A general lien can significantly affect a debtor’s ability to sell or transfer their property until the lien is satisfied. It can also mar their credit rating, making new loans or financial dealings difficult.

Q4: Who can impose a general lien?

A4: A general lien can be imposed by a court through a judgment lien or by the government for unpaid taxes. Lenders can also agree with debtor to place a general lien through contractual arrangements.

Q5: Can a debtor contest a general lien?

A5: Yes, a debtor can contest a general lien by disputing the debt in court or negotiating systematically with the creditor to settle the debt and have the lien removed.

Specific Lien: A lien affecting or attaching only to a particular parcel of property.
Judgment Lien: Legal claim on the property of a debtor based on a court judgment.
Lienholder: A person or entity that holds a legal right on another’s property until a debt is satisfied.
Tax Lien: The government’s legal claim to assets when a taxpayer owes taxes.
Mechanic’s Lien: A lien on property in favor of those who have supplied labor or materials that improve the property.

Online Resources

References

“Real Estate Law” by Robert J. Aalberts.
“Fundamentals of Real Estate” by Philip R. Spool.

Suggested Books

“Liens: Their Legal Significance” by Joan Heminway.
“Real Estate Principles: A Value Approach” by David C. Ling and Wayne R. Archer.

Real Estate Basics: General Lien Fundamentals Quiz

### What does a general lien apply to? - [x] All property owned by the debtor - [ ] A specific piece of property - [ ] Only personal property - [ ] Only real estate > **Explanation:** A general lien applies to all property owned by the debtor, affecting both real and personal property. ### Which scenario best describes a general lien being imposed? - [x] A tenant failing to pay rent and having a judgment lien placed on all their assets - [ ] A mortgage on a house - [ ] A car loan - [ ] None of the above > **Explanation:** A general lien impacts all of a debtor’s property, as can occur when a tenant fails to pay rent and a court issues a judgment against the tenant, leading to a lien on all their assets. ### Can a creditor use a general lien to claim future assets? - [x] Generally, no, unless under specific legal circumstances - [ ] Yes, unconditionally for any future assets - [ ] Only with written permission from the debtor - [ ] Yes, if no other liens exist > **Explanation:** General liens typically apply to properties owned at the time of the lien's imposition, not future assets unless specified by law under certain regulations or agreements. ### What type of authority can impose a general lien? - [ ] Only creditors - [x] Courts and government entities - [ ] Banks only - [ ] Real estate agents > **Explanation:** Courts, through judgment liens, or government entities, through tax liens, can impose general liens. Creditors also can through agreed contracts. ### Why is a general lien impactful on property transactions? - [x] It restricts the transfer of any property until the debt is paid - [ ] It only affects small transactions - [ ] It only affects real estate transfers - [ ] It does not impact transactions > **Explanation:** A general lien is impactful because it restricts the debtor's capability to transfer any property until the lien is satisfied, thereby ensuring the creditor’s claim. ### What is typically a result of not resolving a general lien? - [x] Seizure and sale of debtor’s assets - [ ] Increase in property value - [ ] Immediate improvement in credit score - [ ] Unrestricted property selling > **Explanation:** Not resolving a general lien can lead to the seizure and forced sale of the debtor's assets to satisfy the underlying debt. ### Which term best describes a lien on a specific property? - [x] Specific Lien - [ ] General Lien - [ ] Mortgage - [ ] Contractual Lien > **Explanation:** A specific lien is a lien on a particular piece of property, unlike a general lien which pertains to all assets of the debtor. ### What kind of lien affects everything owned by an estate for tax purposes? - [x] Estate tax lien - [ ] Mechanic’s lien - [ ] Specific lien - [ ] Motor vehicle lien > **Explanation:** An estate tax lien affects all properties owned by an estate to cover any unpaid taxes. ### Are personal properties also covered by general liens? - [x] Yes, personal properties are included - [ ] No, only real estate - [ ] It depends on state laws - [ ] Only when explicitly noted > **Explanation:** General liens cover both real and personal properties owned by the debtor unless specified otherwise. ### Which is not a typical result of having a general lien imposed on one's property? - [ ] Difficulty securing loans - [x] Immediate revenue increase - [ ] Negative impact on credit rating - [ ] Restricted property transactions > **Explanation:** Having a general lien imposed generally results in secured loans difficulties, negative credit impact, and restricted property transactions but does not lead to immediate revenue increase.