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Last Updated: 7/26/2017

Liens

A lien is a legal claim filed in the Secretary of State’s office or a county recorder’s office. It allows us to take property from an individual or business to pay a debt we are collecting. The Secretary of State’s office and counties charge a $30 recording and release fee. (See Minnesota Statutes, section 270C.63 and section 16.D.08.)
 
We can file a lien at any time and will release the lien when all debts are paid.
 
We must renew a lien before it expires and send a copy to the debtor. (See Minnesota Statute 270C.63, subdivision 9.)

 

Attaching a Lien

When we file a lien (legal claim) on a debtor’s real property (such as homes and land) or personal property (such as jewelry, bank accounts, cars, or other possessions) to satisfy a debt.

    

Multiple Owners of Real Property

If ownership of property changes, the lien only applies to the debtor whose name is on the lien.

If a joint tenant dies, the lien against the deceased debtor ends. If there is no lien against the other joint tenant, then no lien is attached to the property.

If the real property is owned as tenants in common, when one of the owners dies, their share of the property goes to the heirs not the owner. The lien remains attached to the property.

 

Single Owner of Real Property

If ownership of property changes, the lien remains attached to all proceeds. If a debtor dies, the property becomes part of the debtor’s estate and the lien remains attached to the property.

 

Transcribing Liens

Liens are copied (“transcribed”) between counties if the debtor moves or real property is found in another county. Liens are also transcribed from Abstract to Torrens if it is found that the real property is Torrens and the lien was not previously memorialized on the Certificate of Title at the county.

 

Statute of Limitations and Liens

We must file a lien within five years of the assessment date for tax debts and other debts we collect.

If the debt is the result of a commissioner filed return (CFR), the five-year period for filing a lien begins the date we assessed the CFR.

Filing a lien extends the statute of limitations (SOL) for us to collect the debt by 10 years from the date the lien was recorded.

 

Administrative Review

If you believe we filed a lien on your property in error, you may ask us to review our decision. We will release the lien if we determine the lien was filed in error. (See Minnesota Statute 270C.63, subdivision 15.)

 

Effect Bankruptcy has on Liens

We cannot file a lien on your property when you are in bankruptcy.

Bankruptcy extends the statute of limitations (SOL) to file a lien for debts that are not discharged in the bankruptcy. However, it does not extend the time to renew liens that were filed before the bankruptcy.

 

Subordination of Liens

If we have a lien on your home and you refinance the mortgage, you can ask for a subordination of the lien, which gives the new finance agreement priority over our lien. We will consider subordination if it benefits the state. If we agree to your request, we may still take other legal actions to collect your unpaid debt.

 

Lien Payoff and Releases

We will release a lien when the debt is paid in full with secured funds. If the debt is paid with other funds, we will release the lien 30 days after we receive the payment. (See Minnesota Statute 270B.085, subdivision 2.)

 

Partial Lien Release

We may issue a partial lien release when a home or equipment is sold and there is not enough equity available to pay the lien in full. A partial release detaches the lien from the new owners of the property, but the lien stays attached to the debtor until the lien is paid in full. Without a partial lien release, the lien stays with the property.

 

Release of an Expired Lien

Liens expire after 10 years unless they are renewed. Once a lien expires, we cannot take any enforced collection action on it. (See Minnesota Statute 270C.63.)

 

Withdrawal of a Lien

We will withdraw a lien if the Recorder’s Office or the Registrar of Titles’ Office recorded duplicate liens and memorialized on a Certificate of Title.