When you borrow money, the lender -- whether an individual or a bank --- usually wants to get repaid. Repayment is easier to enforce when the debt is linked to property, which creates a legal arrangement termed a lien. Even if you don't agree to a lien on your property, one can be created by court action or by statute. The latter type is termed a statutory lien.
If you are borrowing money, you may agree to secure the debt with a lien. In exchange for the loan, you give the lender the right to recover the debt from specific property. For example, if you take out a home loan, you usually must give the lender a lien against the house you purchased. If you fail to meet your mortgage payments, the lender can sell your house. This kind of lien is called a consensual lien because you agreed to it as part of the loan.
Read More: How to Contest a Lien
Sometimes a lender is entitled to a lien on your property to secure a debt even if you don't agree to it. Generally, these "nonconsensual" liens fall into two categories. One is judicial liens. A judgment lien is created when someone goes to court and gets a money judgment against you. By filing the judgment with the appropriate government agency, the person creates a lien on real estate you own in that jurisdiction. The other type of nonconsensual lien is called a statutory lien.
Statutory liens do not result from a court case. They arise from statute. That means that the lien is created under certain circumstances because a law says that in those circumstances, a lien may be created. The classic example of a statutory lien is a mechanic's lien, also called builder's lien. If you don't pay a contractor who works on your house, state statutes give him the right to file a mechanic's lien against your house for the amount he is owed.
Other Statutory Liens
Since statutory liens are created by laws, each jurisdiction may have a different list. For example, some states give a mechanic who works on your car a lien on that car for unpaid repair bills. An owner of storage units may be given a lien on the contents of the unit for unpaid rent. A laundry person may be given a statutory lien on clothing he cleans and irons to secure payment for those services. Likewise, the rights of a person holding a statutory lien depend on the terms of the statute. Some include the right to force sale of the property.
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