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Last Updated: 7/18/2012

Liens

​A lien allows the Minnesota Department of Revenue to take property from an individual or business to pay a tax or another state agency debt. A lien is a legal claim filed in the Secretary of State’s office. The Secretary of State’s office and counties also charge a $30 recording and release fee. View the statutes (Minnesota Statutes, section 270C.63 and M.S. 16.D.08).
 
The department can file a lien at any time, and will release the lien when all debts are paid.
 
A lien must be renewed before it expires and a copy of the renewal sent to the debtor. View the statute (M.S. 270C.63 subd. 9).
 

Attaching a Lien

The department can file liens on real property, such as homes and land, and personal property, which includes possessions like jewelry, motorcycles, cars, bank accounts, wages, guns and business equipment.
 

Multiple Owners of Real Property

In the event that ownership of property changes, the department lien is only attached to the debtor whose name is on the lien. 

If a joint tenant dies, the lien against the deceased debtor is ended. If there is no lien against the other joint tenant, the property would not have a lien attached to it.
 
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, and the lien remains attached to the property.
 

Single Owner of Real Property

When 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 if real property is discovered in another county. Liens are also transcribed from abstract to Torrens if it is discovered 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

Liens must be filed within five years of the assessment date for both tax and other agency debts.
 
If the debt is the result of a commissioner filed return (CFR), the five year period for filing a lien begins the date the CFR was assessed.
 
Once the department files a lien, the statute of limitations (SOL) date for the collection of the debt is extended 10 years from the date the lien was recorded.
 

Administrative Review

If the debtor believes the lien was filed in error a debtor may request an administrative review. If the department determines that the lien was filed in error, the lien must be released. View the statute (M.S. 270C.63 subd. 15).
 

Effect Bankruptcy has on Liens

A lien cannot be filed when a debtor is in bankruptcy.
 
Bankruptcy extends the SOL date for filing a lien by the length of time the debtor was in bankruptcy. A lien can be filed on any debt that was not discharged in the bankruptcy. However, the time for renewing liens that were filed before the bankruptcy is not extended.
 

Subordination of Liens

A debtor can pursue a subordination of the lien at the time of refinancing a mortgage. Subordination allows the new finance agreement priority over the department’s lien. The department will consider subordination if it benefits the state, and if granted, the department does not relinquish its rights to take enforced collection action on the remaining unpaid debt.
 

Lien Payoff and Releases

A lien release is issued when the debt is paid in full using secured funds. If not paid with secured funds, the lien is released after 30 days from the payment received date.
 
Mortgage companies, financial institutions and debtors can obtain payoff information as liens are public information and do not require a power of attorney to disclose payoff information. View the statute (M.S. 270B.085 subd. 2).
 

Partial Lien Release

A partial lien release may occur when a home or equipment is sold and there is not enough equity available to pay the lien in full. The partial lien release will detach the new owner(s) from the liened property, but the lien will stay attached to the debtor(s) until the lien is paid in full. If the partial lien release is not obtained, the lien stays with the property.
 

Release of an Expired Lien

Expired liens do not attach to any property interest of the person whose name appears on the lien. The department will not release an expired lien or take any enforced collection action on it. View the statute (M.S. 270C.63).

Withdrawal of a Lien

A lien filed by the department will be withdrawn if duplicate liens were recorded by the recorder’s office or the registrar of titles’ office and memorialized on a Certificate of Title.