What is a Lien in North Dakota?
In North Dakota, a lien is a legal hold that a creditor party has on the owing party's property, with the intent of enforcing payment. Liens are part of commercial transactions and contracts in North Dakota. They place a constraint on the property owner to pay up pending debts. Sometimes, it is in the property owner's interest to initiate lien action. This type of lien is called a consensual or voluntary lien. On the other hand, non-consensual liens are a prerogative of creditors, and as the name suggests, do not get the consent of the indebted party. Whichever the case, liens are primarily enforced by judicial orders issued by North Dakota courts.
Liens could be attached to some or all the assets of the indebted party. Specific liens are limited to a particular item, while general liens encompass all the debtor's assets.
Are Liens Public in North Dakota
Yes, liens in North Dakota are public record. Per North Dakota FOIA laws, all liens filed in North Dakota must be recorded with the Clerk of District Court, and become a matter of public record. The types of liens that are publicly accessible include federal tax liens, mechanic’s liens, judgment liens, and state tax liens. However, selected liens and certain financial documents are exempt from public disclosure per state law.
Types of Lien in North Dakota
There are various types of liens in North Dakota.
A lien created through a contractual arrangement between concerned parties is called a consensual lien. Some examples of consensual lien include a mortgage lien. On the other hand, the operations of the law, whether statutory or common, may give rise to a non-consensual lien. A tax lien is an example of a non-consensual lien. The government may impose a tax lien on an individual's property whenever such individual declines in paying taxes.
North Dakota liens may also be general and specific. A specific lien is attached to a particular property as security. Alternatively, a general lien affects all available properties of an individual. In addition, mechanic or construction lien is another type of lien in North Dakota. This lien is filed by contractors, suppliers, and construction lenders if not paid for the materials supplied or services rendered on a construction project.
What is a Property Lien in North Dakota?
Most liens in North Dakota are considered property liens. This is because, the most popular assets to attach a lien to are real, personal, or automobile property.
The property selected for a lien usually carries a monetary value equal to or more than the amount owed. The purpose of this is to ensure that the creditor gets paid if the property has to be sold. Some examples include landed property, buildings, vehicles, business equipment, bank accounts, shares, etc.
North Dakota state and federal laws limit the type of property available for liens. However, property liens are only applicable to private property. Government-owned property is not subject to liens, but creditors can implement a bond claim to the property to facilitate payment. Some examples of property liens include mechanics liens, tax liens, construction liens, etc.
How Do You Know if a Property Has a Lien in North Dakota?
Interested members of the public may find out if a property has a lien attached to it in North Dakota quite easily. Whenever an individual creates a lien through a contractual arrangement between concerned parties, the property owner is aware that their property has a lien attached to it. The lienee would receive a notice before filing a lien against their property for a construction lien. If the individual does not settle the payment, they understand the repercussion of their action that a lien will be attached to the said property.
However, if a third party wishes to know whether a property has a lien attached to it in North Dakota, the individual can enquire at the appropriate office. They can also do a title deed search by visiting a county recorder's office.
What is a Tax Lien in North Dakota?
North Dakota tax liens are priority liens implemented by the government against defaulting taxpayers. Taxes are required of owners of property in North Dakota. According to the North Dakota Century Code 57-28, when owners fail to pay property tax for up to three years, the authorities place a tax lien on the property and set it up for auction at the county level. The county recorder's office has charge of the procedure. The property owner has until the date of annual sale to pay up delinquent taxes. After the sale, the property owner loses the property's rights to the new buyer, usually the highest bidder.
What is a Mortgage Lien in North Dakota?
Mortgage liens are voluntary liens that a prospective buyer can employ to qualify for a credit or loan. Mortgage unions are beneficial when buying a house or a vehicle, but there is no bulk cash for an upfront payment. Usually, the agreement in mortgage liens is that the house of vehicle or property becomes that of the indebted parties upon completion of payments. If there is a default in payment, the property can be withdrawn from the indebted party. Mortgage liens are also specific aliens because they are attached to a particular property.
What is a Mechanics Lien in North Dakota?
In North Dakota, a mechanic's lien is used in the construction industry. Due to the nature of construction processes, there may be delays in the payments of monies to relevant parties. Construction workers may file a mechanic's lien to guarantee payment for services rendered. A mechanic's lien is a legal tool that places interest on the property until the indebted party pays up pending debts. It also eliminates the possibility of disputes that may arise, leading to avoidance of payment or accessibility to the owner or contractor on the project. Architects, engineers, and suppliers can all file a mechanic's lien in a construction project. A mechanic's lien differs from other property liens because it is specific to construction work. A mechanic's lien may be filed any time during a construction project if the creditor thinks that payment is late.
Here are the following guidelines for getting a mechanic's lien in North Dakota:
- The contractor or materials man must give a preliminary notice at least ten days before the recording date. All filing for mechanic's liens must be submitted within 90 days from the claimant's last service delivery date.
- Mechanics lien holders must bring an action to enforce the lien anytime after ten days but before three years from the date of record. It is 90 days after the claimant's last delivery or of completing the project for public construction.
What is a UCC Lien?
The term 'UCC' means Uniform Commercial Code. It comprises legal definitions and opinions about commercial transactions in the United States. All states within the country adopt the UCC laws, including North Dakota.
A UCC filing for a lien serves to establish the right to a property because of pending payments. According to the law, filings are made to the Secretary of State. The primary advantage of a UCC filing is a premium priority. It is essential when there are multiple liens on the same property. Also, the uniformity of process across the federation makes it easy to use within and outside the state. UCC liens have a validity period of five years that is renewable so long as the indebted party is yet to pay up. After the debtor completes payments, the lienholder is expected to terminate it by notifying the Secretary to release the lien.
What is a Judgment Lien?
A judgment lien in North Dakota is a court ruling that gives the creditor the right to claim an indebted party's asset. Usually, when the judgment creditor gets a favorable ruling, they record it with the county records office.
Judgment liens usually begin with the judgment creditor filing a complaint with the relevant courts of jurisdiction in North Dakota. Next, they serve a summons to the plaintiff while they both prepare for a court hearing. Judgment liens are involuntary and may or may not be specific. However, the North Dakota state provides a list of non-exempt property eligible for judgment liens. For example, if the owing party has obtained homestead exemption, the property of interest may become ineligible for a judgment lien. Also, if the owing party has filed for bankruptcy, it automatically places a 'stay' on creditor actions. However, a few exceptions to the rule exist by law. If there are mechanics, mortgages, or tax liens on the homestead exemption property, it becomes liable to a judgment lien. Judgment lien holders are expected to initiate action by forcing a foreclosure.
Voluntary Lien vs. Involuntary Lien in North Dakota?
Voluntary liens in North Dakota referred to liens placed on property because of the property owner's decision. Mortgage liens are an example of voluntary liens. Involuntary liens in North Dakota arise due to creditors' actions to get their payment. Involuntary liens are not with the consent of the property owner. Also, the chances of a forced foreclosure are higher than in the case of voluntary liens. Examples are mechanic's liens, tax liens, and judgment liens.
How Do I Check for Liens in North Dakota?
In North Dakota, government agencies are responsible for lien records. Like other records kept by them, Liens are public record information. Anyone who wishes to know the status of any property in the state can contact the government agencies to make inquiries. Also, an individual can check with the county recorder to examine available records concerning land and other real properties within the county. Likewise, interested individuals can visit the county recorders' website to carry out this inquiry in North Dakota. Notably, when individuals make a physical visit to the recorder's office or access the website, they always pay a fee to obtain record copies.
On the other hand, individuals can search with county courts to ascertain if a lien was attached to specific properties in the county. Alternatively, requestors may use a third-party search service or engage the services of title agents to do a thorough lien search on properties in North Dakota.
Free Lien Search in North Dakota
Individuals may contact government agencies that file a lien when doing a lien search. They can visit the agency in person or visit their website to search for various types of lien in North Dakota. Note that information sourced online via the government agencies' websites is sometimes incomplete. Therefore, it is expedient that an individual visits the agency physically to obtain the record(s). However, this may require the payment of a certain fee to reproduce the documents.
How Creditors Collect Payment Through a Lien
Creditors may collect payment through a lien in North Dakota. However, the responsibility is on the creditor to use available legal means to force the debtors to pay up the debt. For instance, creditors can seize the debtor's real estate and sell it to settle the debt or use a property levy against a debtor's personal property. The creditor only needs a writ of execution. With the writ of execution, the creditor can approach the sheriff to assist in seizing the property or force the individual holding the property to release it. Then, the sheriff can sell the property, settle the debt from the proceeds, and remit the sale remains to the debtor.
How Do I Get a Lien Removed in North Dakota?
The easiest way to remove a lien in North Dakota is by paying off the debt. The property is released once the debtor pays the debt and the creditor vacates the lien. On the other hand, lienees may choose to challenge the validity of a lien in court. Although it is not automatic for the court to vacate a lien, they consider the facts available and decide on the validity of the lien. Furthermore, an individual can file for bankruptcy to remove a lien.
How Long Does a Lien Stay on Your Property in North Dakota?
The length of time a lien stays on an individual's property depends on the type of lien. For instance, a judgment lien will customarily last on real estate for ten years in North Dakota. This implies that the judgment will expire in 10 years from the date the judge gives the judgment. However, some circumstances may call for judgment renewal and lien extension. On the other hand, a consensual lien lasts until the debtor pays. For instance, if an individual takes an auto loan to buy a car, the car becomes the collateral for the loan. The bank can sell the vehicle if an individual defaults on loan repayment.
How to Avoid a Lien in North Dakota
The best way to avoid a lien is for individuals to adhere to any repayment plan and ensure that they fully pay the debt. Failure to pay may jeopardize the right of individuals to their property if the creditor decides to take legal action.
