What is a Lien in Kentucky?
A Kentucky lien is a creditor's legal claim to a debtor's assets. A lien makes the debtor's asset collateral for the repayment of a loan, the fulfillment of a financial obligation, or completion of any other contractual obligation so that the creditor is assured of protected interests.
There are different categories and types of liens with various applications. There are general and specific liens and voluntary and involuntary liens. General liens apply to all of a debtor's assets; the creditor may repossess or foreclose as many as required to fulfill the debtor's obligation. Specific liens, on the other hand, apply to only certain assets. A creditor may only repossess the liened asset in a specific lien.
Some examples of liens include property liens, tax liens, oil and gas liens, aircraft liens, mechanics liens, or material man's liens. Liens cloud the asset's title; therefore, asset owners may find it difficult to sell or transfer liened assets. This is because liens attach to assets and transfer with the asset title. Liens do not attach to asset owners. Kentucky Lien Laws offer guidelines for lines, including definitions, timelines, and effects, and Kentucky courts oversee the process for issuing and enforcing liens.
Types of Lien in Kentucky
There are different types of lien in Kentucky; they include judgment liens, tax liens, mortgage liens, UCC (Uniform Commercial Code) liens, and mechanics liens, to name a few. Nonetheless, these liens can be classified in one of two ways:
- Consensual or statutory liens, and
- General or specific liens.
Statutory liens are frequently referred to as involuntary liens, and they occur because of state or federal legislation. Hence, it follows that these liens are typically placed without the debtor's knowledge or approval. Judgment liens that arise from lawsuits, tax liens from unpaid taxes, and mechanics liens from unpaid construction work are examples of statutory liens.
On the other hand, consensual liens are also known as voluntary liens. Contrary to statutory liens, consensual liens are usually established through a lender-borrower agreement. For example, a mortgage lien is a type of consensual lien. It stays on a property until the borrower pays off the loan.
Liens can also be classified as general or specific. A specific lien can only be placed on a particular asset in Kentucky. If the debtor (now the lienee) fails to meet a financial obligation, the lienholder has the right to seize or sell that asset.
In contrast, a general lien is attached to all of a debtor's real or personal property, and it allows a lender (lienholder) to seize any property to pay off a debt. General liens are typical in Kentucky, and an example is the Notice of State Tax Lien filed by the Department of Revenue.
A state tax lien is a public claim against a defaulting taxpayer's property or rights to property. The property or rights can be owned at the time of the lien's filing and acquired after the lien's filing. Examples of properties subject to this lien type include the taxpayer's primary residence, other real estate, boats, receivable accounts, and so on.
How Do I Check for Liens in Kentucky?
Generally, liens are accessible to the public in Kentucky via appropriate channels. In addition to running title deed searches and querying the county recorder's office for real estate liens, people can also conduct lien searches online. Some county recorder offices provide websites for these purposes.
In most counties, the county clerk's office also provides information on personal properties that have liens attached to them.
Free Lien Search in Kentucky
In the same way that other public records generated and maintained within Kentucky may be reviewed at no charge, parties interested in obtaining lien information may review lien records at no charge from the applicable government agency. However, there are usually charges for the duplication of those records.
Additionally, most county recorders in Kentucky offer free lien searches to the public at their physical locations or on their websites. Inquirers will often need to provide basic identification information about the property owner or property of interest to obtain results.
Typically, an online lien search will reveal the identity and contact details of the lienee and lienholder, the property's location, the type of lien, the lien's filing information, the lien's status, and the lien's expiration date. However, as online records may be incomplete, inquirers are urged to visit an agency's physical location to review complete and official documents.
What is a Property Lien in Kentucky?
Kentucky property liens give legal claims to creditors over a debtor's property. Property liens are security; the lien assures the creditor that the debtor will repay a loan or meet other agreed obligations. In Kentucky, property liens attach to a debtor's real property such as houses and land and other property such as jewelry, art, or antiques. To put a lien on a debtor's property, a creditor may file a Statement of Claim with the County Recorder in the county where the debtor has property or is likely to have property.
Creditors may foreclose or sell liened houses to recover unpaid loans or other types of debt. There are different types of property liens, including child support liens, property tax liens, mortgage liens, and mechanic liens. Each lien type arises out of different circumstances and may have different effects. For example, child support liens arise out of back child support payments. The Kentucky Child Support Division may file a lien against a person's property if they fail to meet up with child support payments or deliberately refuse to pay child support payments.
How Do You Know if a Property Has a Lien in Kentucky?
In Kentucky, a voluntary or consensual lien is enforceable only if the lienee and lienholder agree to it. As a result, if a consensual lien, such as a mortgage lien, is linked to a piece of real estate, the property owner will be aware of it.
However, if the lien is statutory, the property owner will usually be notified after the lien is filed and attached. If this is not the case, the property owner may only learn of the lien when attempting to transact with the piece of property. As the lien will likely create some issues during the transaction, it is best to be informed ahead of time.
The county clerk's/recorder's office in the county where the property is located can provide information on property liens. An individual can use this office to conduct a title deed search to check if a property has a lien and the type of lien. Additionally, an interested party can contact a title agent to find this information. A title agent specializes in property titles, locating liens, obtaining property records, and documenting a property's complete history. The services of a title agent typically come with a charge.
Property Lien Search by Address in Kentucky
Property liens are public records. As such, Kentucky residents can make requests to inspect or obtain copies of property lien records from the County Clerk’s Offices that maintain land records. The common way to conduct a property lien search in Kentucky is by name, book and page number, or date range. However, it might be possible to check liens on a property in person at County Clerk’s Office by providing the property's address. Contact the Clerk's office where the county property is located for more information on how to find liens on a property.
Free Property Lien Search by Address
A requester might be able to find a lien on a property if they request a property lien search by address at the Clerk’s office in the county where the property is located. This search can be done by address at no cost if the requester only wants to view the document or print out uncertified copies. However, certified copies might come at a cost. Contact the Clerk’s office in the county where a property is located for more information on how to check for liens on a property by its address.
What is a Tax Lien in Kentucky?
The state files liens against tax delinquents in the state. The Kentucky Department of Revenue files a notice of state lien tax against assets belonging to persons with outstanding tax payments in the state, including business tax, income tax, and property tax. Tax liens notify the public of the state's interest in the assets that the debtor holds when filing the lien and assets that the debtor acquires after the lien filing. Examples of such assets may be accounts receivable, boats, or real estate. The creditor may file a tax lien in the county where the debtor lives or does business. The creditor may also file a tax lien in the county where the debtor does not currently have assets but has property interests. Kentucky sells property tax liens as certificates at a public auction once every year. One year after the tax lien sale, the third-party buyer may foreclose the asset. Tax liens have priority; this means that the debtor must pay outstanding taxes first before paying off any other liens.
Tax Lien Lookup in Kentucky
Tax liens are public records maintained by agencies in charge of land records. Hence, members of the public can inspect or obtain copies of tax liens at County clerks’ offices. For instance, Webster County Clerk’s office has an online tool where a requester can conduct a lien lookup. Search results reveal the grantor and grantee names, book name and number, document type and image, page number, description, and date. Alternatively, tax lien lookup can be done in person at the Webster County Clerk’s office at:
Webster County Clerk
25 US Hwy 41-A S
Dixon, KY 42409
Phone: (270) 639-7006
Fax: (270) 639-7029
What is a Mortgage Lien in Kentucky?
When a person takes a mortgage loan, such a person is giving voluntary consent to a mortgage lien. A mortgage loan allows the mortgagor to spread payments for real property purchases over a period. If the mortgagor does not meet up with the payment schedule, the mortgage creditor may file a lien against the property. In this way, the house becomes collateral for the mortgage loan and serves as a security to the mortgage creditor. Unlike other types of property liens, mortgage liens are voluntary; this means that the mortgagor consents to the lien by performing an action, which, in this case, is signing a mortgage agreement.
Mortgage liens can lead to foreclosure; if the mortgagor fails to make payments when due, the mortgage creditor may repossess the house and sell the house to recover the outstanding amount: the Kentucky Mortgage Laws guide mortgages and mortgage liens in the state.
What is a Mechanics Lien in Kentucky?
A mechanics lien is also known as a material lien in Kentucky. According to Kentucky's Mechanics Lien Laws, contractors, materials suppliers, sub-contractors, licensed design professionals, and equipment lessors who do not receive payment for services rendered towards the construction, repair, or alteration of a property may file mechanics liens. The lien grants the contractor a legal claim to the debtor's property. In Kentucky, a creditor must file a mechanics lien within six (6) months of providing the service. The creditor must notify the lien's debtor within 75-120 days, depending on the amount involved. Additionally, creditors must enforce liens within one (1) year of its filing. Kentucky records the following types of liens as mechanics liens:
- Veterinary liens
- Attorney's liens
- Livestock liens
- Vehicle storage and repair liens
- Machinery, motors, and work supply liens
What is a UCC Lien?
A Uniform Commercial Code (UCC) lien is one that a creditor puts on a debtor's business property or personal property. The UCC guides business transactions in the United States. In construction, material suppliers may file UCC liens with the secretary of state to recover debts. If a debtor cannot repay a loan or meet up with other agreed terms, the creditor may repossess the debtor's house until the debtor can pay. Creditors may file UCC liens with the Kentucky Secretary of State.
How to Conduct a UCC Lien Search
A record seeker can conduct an uncertified UCC lien search via the UCC index search tool available at the Kentucky Secretary of State office's Uniform Commercial Code (UCC) Division website. A search can be done by the debtor’s name or file number. UCC lien search results reveal information like:
- File information, including file number and date, lapsed date, and status
- Actions information, including action, file date, and status
- Names including debtor and secured party names, filer, date, and address
- Collateral description
- Images including documentary type, PDF, tiff image, file date, and pages
A certified UCC lien search can be done by submitting a completed UCC Information Request form and a $5 fee to the UCC office at:
Office of the Secretary of State
700 Capital Ave., Ste. 158
P.O. Box 718
Frankfort, KY 40601
Phone: (502) 564-3490
Fax: (502) 564-5687
What is a Judgment Lien?
A judgment lien is a court ruling that gives a creditor a legal claim to a debtor's assets, including real property, furniture, appliances, and vehicles if the debtor fails to repay a debt. The creditor may sell the liened asset to satisfy the debt. Judgment liens typically result from lawsuits; a creditor may sue a debtor who fails to comply with payment terms. Kentucky judgment liens are valid for up to 15 years. Creditors may not repossess property belonging to persons eligible for homestead exemption in the state. The following persons are eligible for homestead exemption in Kentucky:
- Persons 65 years or older
- Persons classified as totally disabled
- Owners of liened property
- Residents of the property on assessment day
What is a Federal Tax Lien
Per IRC § 6321, a federal tax lien refers to a legal claim the federal government makes against a person or business’ real or personal property due to unpaid property taxes. A federal tax lien exists after:
- The Internal Revenue Service (IRS) assesses a taxpayer’s liabilities (per IRC § 6201)
- Sends the taxpayer a notice and demand for payment (per IRC § 6303)
- The taxpayer fails to pay the tax debt as and when due, either through negligence or refusal
- Then the IRS will file a Notice of Federal Tax Lien to alert creditors that they have a legal right to the taxpayer’s property.
The best way to get rid of a federal tax lien is for taxpayers to pay their tax debts promptly. Per IRC § 6322, a tax lien remains on the taxpayer’s property until the debt is satisfied or the lien reaches its statute of limitation, usually 10 years (per IRC § 6502). The IRS has 30 days to release a lien if the tax debt has been satisfied (i.e, paid in full). Kentucky residents can request federal tax lien information online or in person at County Clerk’s Office.
Contact the IRS at (800) 829-8374 (self-employed), (800) 829-0922, (other individuals) (800) 829-0922 (businesses) for more information on unpaid property taxes and how they result in federal tax liens.
What is a Lien Title?
A lien title is a lienholder’s legal claim to a person’s property. Anyone who finances their property will likely have a lien on the property title. The best way to avoid a lien on a property title is to pay off the loan completely. Note that if the loans are unpaid within the agreed-upon time, the lender can decide to repossess the property.
Where and How to Do a Title Search in Kentucky
A title search on automobiles and real estate properties can be done at County Clerk's Offices in Kentucky. Most offices do not permit their staff to conduct title searches for inquirers. However, they can assist inquirers who come to their offices for title searching. A title search can also be done via the Online Vehicle Information System (OVIS). Individuals are required to pay $75 for an annual subscription and $0.44 for each record accessed to be able to use the OVIS.
Voluntary Lien vs. Involuntary Lien in Kentucky?
A voluntary lien occurs with the debtor's consent. The debtor willingly accepts the lien by performing an action. For example, mortgage liens are voluntary liens; the debtor agrees to the lien by agreeing to the mortgage terms. Involuntary liens occur without the debtor or property owner's consent; the creditor files the lien against the debtor's assets without the debtor's voluntary agreement. Statutory liens such as tax liens and mechanics liens are involuntary liens.
How Creditors Collect Payment Through a Lien
A creditor secures an interest in a debtor's property by filing a lien against it. Hence, the creditor may choose to enforce the lien if a debtor fails to make timely payments. Typically, this entails seizing the property and selling it to pay off the outstanding debt.
How Do I Get a Lien Removed in Kentucky?
In Kentucky, a person can usually get a lien removed from their property by paying the original debt and any additional fees or interest that may have accrued.
Alternatively, if the lien is subject to a statute of limitations, the individual may choose to wait it out until the deadline passes. However, the disadvantage of this approach is that most liens are renewable in the state, except for mechanic's liens. Additionally, the lien holder can file a lawsuit during the statute of limitations period, which could cause the debtor to lose the property in question.
A lien can also be removed through a judicial order. In this case, the lienee will file a legal challenge to the legitimacy of the lien, and the court will order the lien to be discharged if the lienholder cannot demonstrate the lien's legitimacy.
How Long Does a Lien Stay on Your Property in Kentucky?
In Kentucky, the length of time that a lien remains attached to a piece of property depends on the type of lien. Even so, most liens are released once a debt or obligation is satisfied.
However, while an involuntary lien, such as a judgment lien or tax lien, may be withdrawn when an obligation is met, the lien remains enforceable for the period specified by the statute of limitations. For example, a judgment lien is valid 15 years after the judgment date. A mechanics lien can be enforced for up to a year from the filing date. Furthermore, an unpaid tax lien on real estate can last for up to 11 years from when the tax became delinquent.
How to Avoid a Lien in Kentucky
Since debts facilitate the establishment of liens, avoiding them is the best way to steer clear of liens in Kentucky. It is advisable to stick to any repayment agreements made with a lender and avoid further debts (unpaid taxes, lawsuits, etc.). Furthermore, if unable to pay a debt in full by the due date, one may contact the owed party to negotiate a reasonable payment plan.
If all these are done, no creditor will have a reason to record a lien against a person's property. Also, as liens may hurt a person's credit rating, avoiding them helps maintain a good credit score.