A lien on a property is the most usual type of lien but not the only type. For example when you take a loan from a bank to finance a car, the bank can put a lien on the car to ?ensure? repayment until all outstanding payment is made.

The same applies to funding a house through a bank. The lien gives the bank the right to repossess the house if you are unable to make the payment.

A tax lien is imposed by law on property to assure the payment of taxes. They may be imposed on real or personal property for delinquent taxes and/or the failure to pay any sort of taxes on the property including income taxes.

A tax lien on properties ?runs? with the property owner. It means that the new property owner is responsible for paying the taxes even though the tax was incurred by a previous owner.

The rulings on tax lien varies from states to states but the owner of the property may be personally liable for the remittance of all outstanding taxes. This can be made by the property owner or indirectly by the mortgage holder. Plenty of notices are given to make sure that both the owner and the mortgage holder are appraised of the situation.

If a tax lien on a personal property is not settled within a designated time, the asset may be confiscated and sold at a foreclosure sale. This normally happens after several notices are given and attempts are made to establish contact and/or payment. If a property is sold by the owner prior to tax foreclosure, the tax lien is most often paid as part of closing costs from the sale proceeds.

One of two methods may be used in dealing with the result of foreclosure on a piece of real property. The property may be confiscated and sold in what is called a tax deed sale. The other method can differ from state to state but the tax lien may be offered to investors in the form of what is called a tax lien certificate. This accompanies the right for the investor, after a specific period of time has passed, to begin foreclosure actions. This is known as a tax lien sale.

It goes without saying that it is desirable to stay current on the payment of taxes on property as this saves time and frustration in dealing with foreclosure actions. It makes sense to ensure that the property that you plan to purchase is free of a tax lien.