An equitable lien is a claim on a wrongdoer’s property that is placed by a court of equity, or through an equivalent legal proceeding. The goal of the equitable lien is to correct some injustice or wrongful act that has occurred, by placing a lien on the wrongdoer’s property, in favor of the party harmed by the wrongdoer’s actions. A common example of a situation where an equitable lien might be appropriate involves the embezzlement of the proceeds from a trust by a trust administrator or trustee. In this case, a court of equity might order an equitable lien against the trustee’s property in order to compensate the trust’s beneficiaries, who have obviously been harmed by the trustee’s misdeeds.
Equitable liens are not administratively filed with governmental entities or offices, such as is the case with most types of liens placed on real estate and other types of property. Rather, an equitable lien is a remedy that is available to judges and courts in the context of a civil lawsuit that alleges a party’s wrongdoing, so as to compensate and/or remedy the party that was financially harmed by the other’s misdeeds. Therefore, a court order is typically required in order to impose an equitable lien on a party’s property.
Getting an equitable lien released is completely subject to the court’s order regarding the imposition of the equitable lien. It is likely that the court may give the wrongdoer some alternatives to an equitable lien, or some sort of recourse in order to allow the wrongdoer to have the equitable lien released. For instance, the court’s order may require the wrongdoer to pay the victim a certain sum of money in order to have the equitable lien released, or in order to avoid the imposition of a lien on his or her property altogether.
As obtaining an equitable lien necessarily requires one to file a civil lawsuit and obtain a court order imposing the lien, retaining the services of an experienced attorney is essential. Therefore, an attorney will be instrumental in filing the appropriate documents to initiate the lawsuit, proving the claim of wrongdoing, and requesting that the court impose an equitable lien on the wrongdoer’s property. Because this is court-created remedy that is only available in the context of a civil lawsuit, attempts to obtain an equitable lien absent the assistance of a skilled attorney are unlikely to be successful.