A real estate lien is a piece of real estate which is issued out as a security against a loan or other forms of debt. A lien is much like collateral would be to your ordinary debt security. In the event of a failure to repay the debt in time, this lien is taken over by the creditor.
What is real estate release?
A real estate release is a formal announcement by a property owner of his relinquishment of any claims to an asset. This release is necessary to transfer and showcase the surrender of the asset in question to the creditor. It is necessary before any item may be admissible as a lien for the purpose of securing any future loan.
When and who releases the lien?
The lien is definitely released by a property owner who also doubles up as a debtor. He does so at such a time when his loan has been processed and is almost due for approval. This happens after the said property has been inspected and evaluated to ascertain its actual value.
What role a real estate lien release form plays?
A real estate lien release form covers and protects the parties as follows:
Transfer of Claims
It is the real estate lien release form that showcases the relinquishment of the controls or claims to an asset. On it are the details that pertain to the entire transaction. Among these are the descriptions of the real estate property and the identities of those who are to take it over.
If and when a dispute arises within the duration of the transfer of ownership, the form may be used for matters of litigation. It may be used to prove which of the parties concerned has a legitimate claim of that property at that time.
Lastly, it may also serve as a reference should such a need arise in the future. Most of the time, there is usually the need for solid and hard proof. Such a proof is only made possible if there is documentary evidence to that effect.
Types of real estate lien release forms
This is issued out in that instant when a contactor enters an agreement with a homeowner to carry out some repairs. It transfers the claim of ownership temporarily to the mechanic until such a time when the last due is paid. This gives the mechanic some confidence to do a good job.
In this form of lien, the property that is being bought is the one that is issued out as security. It guarantees that in the event of a complete default, the property owner shall issue out the property in exchange for the outstanding balance.
If you have any debt that is incurred against your property, you might want to take advantage of the tax lien to settle that debt. It differs slightly from the other kinds of liens in that it does not lead to the immediate seizure of your property. This lien is however irrevocable and overrides other liens.
Partial Release Lien
This is a premature waiver or release of lien upon the completion of a phase of work. It is issued out at that time that the property owner pays for the service. It is exclusively used in the building and construction industry. Hardly will you find it elsewhere.
Free Release Forms (by State)
Release Form Templates
Basic contents of real estate lien release form
A typical real estate lien release form contains the following issues:
- Name of property
- Property address
- Name of owner
- Name of creditor
- Signatures of owner and creditor