A lien is a right granted by a property owner to another that secures payment of a debt or some other obligation. In real estate, the most common form of a lien is a mortgage, which gives the mortgage lender a security interest in the property. If the mortgage is not paid back according to its terms, the lienholder can exercise their rights and foreclose on the home.
Liens can also be applied to property for things like nonpayment of property taxes or unpaid contractor bills.
When purchasing a home, it is important to confirm if there are liens that are attached to the title of the property. The title insurance company will research public records and provide a list of current liens on a particular property. Those liens need to be cleared prior to the purchase of the home to ensure that the new owner has clear ownership of the property.