There are different types of deeds, the most common being a warranty deed. A variety of encumbrances can be placed on a warranty deed, including a vendor's lien. Fully understanding real estate transactions requires an understanding of a warranty deed with a vendor's lien.
A warranty deed is used to convey an interest in real estate. When a warranty deed is issued, the presumption is that there are no unknown encumbrances on the property.
A vendor's lien is placed on title to real estate by a person or company that has performed work on the real estate and no payment has been made.
Placing a Vendor's Lien
A vendor's lien is placed on real estate by filing a standard form with the register of deeds office in the county in which the property is located.
Removing a Vendor's Lien
A person or entity owed money for work done on the property will remove the vendor's lien once payment is made.
When a piece of real estate is being sold a title search is undertaken to determine what liens---including vendor's lien---are placed on the property.
- The Wall Street Journal. Complete Real-Estate Investing Guidebook, David Crook, 2006
- Cornell Law School, Real Estate Transactions: An Overview