Ohio State Property Lien Laws

Property is considered to be an asset. Thus, it can be used by its owner in financial transactions. One of the ways that this is done is through a property lien. However, property liens are governed by the laws of a particular state. Ohio is no different in that is has its own property lien laws.

Basics

A property lien is the term used for charging a particular property in exchange for the satisfaction of a debt. The owner of a property has the option of placing a lien on his or her property to get financing for a mortgage on it.

Sources

Aside from the lien stemming from the owner using the property to obtain a mortgage, property liens can result from a number of occasions. In Ohio, property liens can be made for debts that are not connected with the actual property being encumbered. This means that the owner of the property can place a property lien on his assets to satisfy other debts. For example, the property lien could be for the purpose of paying state and federal taxes, such as income tax. Another way in which Ohio allows property liens to be used is during divorce. One spouse may be awarded ownership of the marital home, but a property lien is granted over it in favor of the other spouse.

Read More: How to File a Property Lien

Creditor Protection

Ohio law also allows property liens to be used to protect the creditor. When a person fails to pay a debt to another, the creditor can take the case to court and ask that that judgment be entered in the land records so that the debt becomes a lien on the debtor's property. In cases where the debtor sells the property when the lien is still attached, the property lien still exists even after a new owner has been named. Businesses that supply the materials used to build a particular property may also use property liens in Ohio. They can obtain a "mechanics' and materialness" lien over the improvements made on the property.

Jurisdiction

In Ohio, property liens are governed by the existing laws of the state. However, parties that enter a lien are allowed to agree to use an alternative dispute resolution. This means that the court is not the only venue where property lien disputes can be resolved. The case may be tried and judgment promulgated at a legitimate alternative dispute resolution venue. However, the court system still maintains its jurisdiction to enforce the results of the alternative dispute resolution.

Satisfaction

Property lien laws in Ohio state that the property is released from this encumbrance when the debtor has satisfied the debt or obligation that was originally made. Remember that a lien is placed because of an unfulfilled obligation. When the obligation no longer exists, there is no need to place a lien on the property. Another way in which liens on a property are satisfied is when the creditor fails to enforce the lien within a specified period of time. It is unreasonable for the owner to indefinitely wait for the creditor to exercise his right over the property, so inaction over a specified period releases the property from the encumbrance.

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