What is a Lien in Delaware?
A lien in Delaware refers to the claim an individual has over a collateral asset or property to guarantee payment of a debt or the performance of an obligation. Different types of liens apply to varying situations. The most common type of Delaware liens are those pertaining to real estate mortgages. Under 25 Del. C. Section 4301, there are also liens in favor of charitable hospitals due to the treatment and care of persons hurt in a personal injury accident.
A lien can either be general or specific. A general lien means the claim is not just on a particular property. Instead, the assets owned by the debtor are collateral that may be forfeited to the creditor if they fail to settle the debt or obligation. If a lien is specific, it only applies to a particular asset. Whichever the case, a lien can only be enforced following a court order issued by a Delaware court.
Are Liens Public in Delaware
Yes, liens that are filed in Delaware are public records and available for anyone to view. According to the provisions of the Delaware Code, liens are required to be recorded, indexed, and made available for public inspection much like most state-generated records. A lien seizes to be public information when it is released, discharged, or expires.
Types of Lien in Delaware
There are different types of liens in Delaware. A common one is a judgment lien which is accompanied by a court's judgment, pursuant to § 4710 of the Delaware Code. It ensures that the person who won the judgment (judgment creditor) gets the money awarded by the court. If the judgment debtor cannot pay, the lien authorizes the creditor to initiate a sale to get the amount owed from the proceeds of sale from the debtor's property. Delaware judgment liens are only attached to real estate like a house, land, or condo.
Another type of lien in Delaware is a tax lien which results from a person's refusal to pay income or property tax. Persistent failure to make these payments will lead to an imposition of a lien on a person's property or assets. Proceeds from these properties or assets are then used to pay off the tax bills.
A lien may also arise in Delaware out of a person's failure to pay contractors on a project. This type of lien is called a mechanics or construction lien and may be filed by construction companies or contractors if a person fails to pay for their services.
How Do I Check for Liens in Delaware?
Liens are public record in Delaware, and there are various ways to check for liens. The Delaware Division of Revenue, for instance, has a web page where it publishes the names of individuals and businesses with unpaid tax liens. § 359(b), Title 30 of the Delaware Code allows the division to publish these names until the affected person or organization pays the debt, enters a payment agreement, or shows proof of bankruptcy. There are separate lists for individuals and businesses to guide interested persons during a search.
Interested persons may also check for liens at the county level. The New Castle County Recorder of Deeds is the repository for all land transactions and other financial records, such as federal tax liens, mortgages, etc., in the county.
Individuals may visit the County Recorder of Deeds physical address at 800 N. French St. Fourth Floor, Wilmington, DE 19801 between 8:00 am to 4:00 pm from Mondays to Fridays. The division also allows for an online document search which costs only $1 per page. Alternatively, The subscription search option grants requestors unlimited access to documents for only $100 a month.
Most counties in Delaware have a website, and interested persons may find records on the county's website. An alternative way to find lien records in Delaware is to check with the state courts or use a third-party search tool.
Free Lien Search in Delaware
Typicaly government agencies do not charge anything to run a lien search in Delaware. However, requestors are usually required to pay a fee to make copies. Interested persons may visit relevant agencies in person, or use an online search tool available on the county's website, to conduct the search. However, these online records are not always complete or official records. Requestors are advised to pay the required fee to view the complete record or visit the relevant agency office in person.
What is a Property Lien in Delaware?
A property lien in Delaware is a legal claim against a debtor's assets. The creditor can possess the assets if the owner fails to repay their debts. Such properties serve as collateral to give assurance of the payment of debts. Failure on the owner's part to pay the debts will result in the repossession of their assets. Liens can be placed on real estate, cars, jewelry, and other valuables. The Delaware Court 2019 Statistical Information reported 2,329 filings of property liens for the year. This was 20.3% of the state's 2019 total civil case filing.
Part II Title 25, Delaware Code contains the provisions of the state laws on property liens. These liens include mortgage liens, judgment liens, tax liens, and mechanics' liens.
How Do You Know if a Property Has a Lien in Delaware?
A property lien could stand in the way of a person refinancing a mortgage, selling, or buying a home. So, it is important to check if a property has a lien attached to it before making long-term commitments. Most times, the property owner will be aware of existing liens because they neither consented to it nor received notice of its existence. A third party interested in finding out if a property has a lien attached to it may search with the agency in charge of recording liens in the jurisdiction. Alternatively, interested persons may initiate a title deed search to reveal if a property has a lien on it or not.
Property Lien Search by Address in Delaware
A property lien search by address can be conducted through any Delaware county recorder of deeds office. The repository for all land transaction data, company filings, and financing statements in the state's many counties is the recorder of deeds. The recorder's office recorders office is also responsible for receiving, recording, processing, and delivering federal tax liens, mortgages, and deed restrictions. To perform a property lien search by address, interested persons can pay a visit to the county recorder of deeds office where the property of interest is located to request a records search using the property address as the keyword. property lien search by address online through the county e-recording database using the address of any property in the county. For instance, the Newcastle county recorders office online property document database or the Sussex county property search database can be used to search for property lien by address
Free Property Lien Search by Address
In Delaware, county recorder's offices typically don't charge for lien searches conducted through the online search portals they oversee. As a result, those looking for public records can find free liens on a property by using these portals. However, there is a price for requesting standard or certified copies of property lien records at a county recorder's office or through the websites they manage for internet searches.
What is a Tax Lien in Delaware?
A tax lien in Delaware is a charge imposed by the state or any political subdivision on the properties of individuals who fail to pay their taxes. The Division of Revenue handles delinquent taxpayers in the state and publishes their details on its website until they pay the debts.
Under Title 25, Chapter 29 § 2901, Delaware tax liens include real property taxes, school taxes, service charges for use or maintenance of water and sewer systems, and fines incurred from the violation of local ordinances.
For instance, liens assessed against real estate in the New Castle County jurisdiction are valid for ten years. However, if there is no change in ownership, the lien remains valid till the taxes are paid. The timeline for tax liens filed in Kent and Sussex counties is described in Title 25, Chapter 29 § 2903 (b).
Tax Lien Lookup in Delaware
A Tax lien look-up in Delaware can be performed online or in person through the Delaware division of revenue. Pursuant to § 359(b), Title 30 of the Delaware Code, the Delaware division of revenue is required to publicly publish an individual's or company's unpaid tax lien information Until one of the following occurs: the taxpayer pays their debt in full, presents evidence of bankruptcy, or enters into an accepted installment plan.
Record seekers can find Tax lien information on the Delaware Division of Revenue’s Delinquent Taxpayers web page. The webpage lists businesses and individuals that have not paid their tax liens and also gives the stipulated amount defaulted on this information is updated quarterly throughout the year. A lookup can also be performed by visiting the department office for inquiries.
What is a Mortgage Lien in Delaware?
A mortgage is a loan acquired to purchase real property. However, the real estate purchased stands as collateral for the loan and can be repossessed by the creditor if the borrower does not pay the loan. A mortgage lien in Delaware gives the creditor a legal claim to the real property until the owner pays off the debt. Mortgage liens provide a form of security to the creditor and ensure that the debtor reimburses them.
What is a Mechanics Lien in Delaware?
A mechanics' lien in Delaware is created by Title 25, Chapter 27 of the Delaware Code. It arises when a party that rendered a construction service - labor or provision of materials - is owed payment for services provided to an amount exceeding $25. In such cases, the unpaid party can file a lien against the serviced property. State law requires construction parties directly contracted for a job to file a mechanics' lien within 180 days of fulfilling their contractual obligations. Sub-contractors must file their claim within 120 days of the date their payment is due.
Generally, the mechanics' lien ensures the compensation of the party furnishing labor or material. Mechanics' liens can be filed against both individuals or corporations.
How to Conduct a UCC Lien Search
In Delaware, a UCC lien search can be done by running a query on the UCC database accessible through the Delaware Secretary of State website. To perform remote UCC lien searches in Delaware, record seekers can use the UCC Certified/Federal Liens Search service that is maintained by the Delaware Secretary of State. Delaware UCC searches are carried out by certified searchers, which include Registered Agents, Service Providers, and Law Firms that have received certification from the Delaware Division of Corporations for conducting online UCC filings and UCC searches. All of the UCC searches carried out by these agents are Certified UCC Searches received through Delaware's UCC Information System.
What is a UCC Lien?
A UCC (Uniform Commercial Code) lien is a set of laws that allow creditors to establish a legal claim on a debtor's business or personal assets to secure loans. The Delaware Division of Corporations handles UCC filings in the state. Interested persons can complete and file the appropriate UCC forms online. Filing parties can view the UCC Administrative Rules to obtain more information on the UCC filing requirements.
What is a Judgment Lien?
A judgment lien is often the result of a courts verdict following a civil proceeding. Upon awarding monetary damages to a plaintiff, the court can impose a judgment lien to ensure the defendant pays the amount owed. Typically, judgment liens ensure the party awarded the money judgment gets paid by the other party. In this arrangement, the plaintiff is the creditor and can place a lien on the debtor's property.
A judgment lien in Delaware can only be placed on the defendant's real estate located in the county where the Superior Court's verdict was issued. Per Title 10, § 4711, a judgment lien placed on a real estate remains attached to the property for ten years, irrespective of the new owner. However, this deadline does not apply to judgments involving a mortgage or mechanics' lien.
What is a Federal Tax Lien
A federal lien is a legal claim made on all of an individual's present and future assets, including real estate, personal property, and rights to assets like wages and bank accounts by the government. Per § 6321 Title 26 of the Internal Revenue Code, If someone owes any taxes and neglects or refuses to pay the required amount upon demand as well as any fees that may arise, the lien is immediately created. The lien immediately ceases to exist when the person pays all their debt or produces proof of payment of the debt.
What is a Lien Title?
A lien title is a formal statement of a monetary claim made against real estate or other assets. A lien on a title indicates that there is a debt owed or a legal claim against the property and that the creditor or claimant has the right to repossess the property if the obligation is not paid. The lien can be discharged and the title can be transferred to a new owner without any restrictions once the debt or legal claim has been met.
Where and How to Do a Title Search in Delaware
A title search is typically done by visiting the county recorder's office in the state to search for different document types like mortgage, deed, and release of lien that are attached to the property of interest. In Delaware, most counties maintain their land records online. But, some counties do not, thus record seekers will have to visit the county recorder in person. To acquire copies of the relevant documents, the requestor must supply the property address or owner's name and pay a charge.
Voluntary Lien vs. Involuntary Lien in Delaware?
A voluntary lien is a claim to a property that the owner permits. The property owner willingly grants the lien to the creditor and is aware that failure to repay their debt will result in repossession of the property. A voluntary lien occurs in mortgage loans, personal loans, and business loans.
In contrast, involuntary liens are liens that do not require the debtor's consent before being placed on a property because of debts. Generally, regulatory authorities and the state courts impose involuntary liens on properties for unpaid debt obligations by the owner. An involuntary lien can be attached because of unpaid taxes, court judgments, or unpaid construction services.
How Creditors Collect Payment Through a Lien
While a lien is a legal mechanism for enforcing a loan, it does not give a creditor automatic rights over the property in question. Before enforcing a lien, the creditor must go to court and get an order of enforcement. The court order tranforms the lien from a potential claim on the property to a proof of partial ownership for the creditor. Any lien enforced without a judicial writ is illegal, and a creditor cannot automatically seize a person's property for failing to pay a debt.
However, in Delaware, a judgment lien is created automatically on any debtor's property located in the county where the superior court rendered the judgment. The creditor must file the judgment with the superior court in the county where the debtor has property for personal property liens.
Once a creditor enforces a lien, the creditor may conduct a sale of the property. For example, if a person defaults on mortgage payments, the bank may foreclose on the home and sell it as part of the lien enforcement process. After the sale, the bank keeps the amount owed and returns the excess to the debtor.
How Do I Get a Lien Removed in Delaware?
The major way to remove a lien in Delaware is to discharge it. Liens paid off or satisfied for any reason may be properly discharged by filing a lien release in the county where the lien was recorded. It is also possible to remove off a lien through bankruptcy. A Chapter 13 bankruptcy reorganizes existing debts and creates a repayment plan that lasts three to five years. A person filing for a Chapter 13 bankruptcy may request that the lien be stripped after completing the debt repayment plan.
How Long Does a Lien Stay on Your Property in Delaware?
Different liens in Delaware have specific time limitation periods. Under § 4711 of the Delaware Code, a judgment lien stays on a person's real estate for only ten years unless renewed. It is, however, possible to renew a judgment lien for another ten years. For mortgage liens, the lender can start foreclosure proceedings once there is a default in payment. Hence, mortgage liens typically stay on a person's property until it is paid off or foreclosed.
How to Avoid a Lien in Delaware
The best way to avoid a lien in Delaware is to avoid or pay off debt. A lien can only affect a person's ownership or possessory rights if the person misses payments and the creditor secures a judgment. As a result, the original owner only partially owns the property, to the extent of the amount owed. However, since the lender has no duty to maximize the asset when it's time to sell it to recover the debt sum, it is debt to avoid the process altogether. The debtor only gets what is left after the sale of the property, whatever amount it was sold.
