What is the process for removing a commercial lien?

A lien is a formal document which states that a creditor has an official claim to a debtor’s property for services rendered by the creditor or for an amount owed by a debtor to the creditor. Though the lien-holder (creditor) does not have all ownership rights--for instance, he may not be allowed to sell the property--he does have some rights. The extent of these rights depends upon the agreement terms, such as having priority over other creditors in case the debtor goes bankrupt or insolvent.

The commercial lien process, then, can be placed against types of properties that have commercial purposes. This includes agricultural properties, land which has multiple buildings, and structures that have more than four or eight residential units (condominiums and townhouses excluded).

Though commercial lien laws vary depending on what state the property is located, most commercial liens are filed to ensure that contractual obligations are paid for. For example, since new laws have been recently enacted to protect brokers, in some states brokers are now allowed to place a lien on a particular property which will only be lifted once all broker fees have been paid. Furthermore, the only thing necessary to file a commercial lien is accomplishing the necessary paperwork against the debtor; no court order is necessary for it to be enforced.

Once a commercial lien is in place, the lien can only be removed by paying off all debts to the creditor and/or by approval of the lien holder or creditor for it to be removed.