What is a Lien in Minnesota?
A lien in Minnesota is a legal claim filed on property, which indicates that the holder has a right to collect the property if the owner does not repay a debt or fulfill an obligation. Under Chapter 270C.63 and Chapter 500-515B of the Minnesota Statutes, liens are legal vehicles proposed to protect the creditor's interests in an agreement. The lien ensures that the borrower honors the deal or makes reparations for defaulting.
Minnesota liens are categorized as consensual liens and non-consensual liens. Consensual liens are among the most common types of liens in Minnesota and are most applicable to money-lending agreements. Non-consensual liens involve judicial orders issued by Minnesota courts; examples include judgment liens and tax liens.
Are Liens Public in Minnesota?
Yes, liens in Minnesota are public records. Any person or entity can access information about liens according to the provisions of the Minnesota Data Practices Act. Lien information includes the name of the lienholder, the amount of the lien, and any other details associated with it. This information can be accessed by filing a request with either the court in which the lien was filed or directly with the Minnesota Secretary of State’s office. However, if a lien has been paid off or released, this will not necessarily show up in public record search results. Certain types of liens may not be public records, such as those related to child support payments and certain security interests.
Types of Lien in Minnesota
There are various types of liens in Minnesota. They include bank liens, judgment liens, mechanic liens, UCC (Uniform Commercial Code) liens, real estate liens, and tax liens. Furthermore, liens can be classified as consensual or non-consensual (also known as voluntary or involuntary liens) and general or specific liens.
Consensual liens are usually agreed upon by the parties involved. These types of liens often involve signed agreements between a debtor and a lender in the form of security agreements or other similar agreements. In these signed agreements, a debtor would grant a creditor interest or lien on their personal properties. Essentially, these agreements are considered contracts, and when signed, these contracts can be enforceable by a court.
On the other hand, non-consensual liens include judicial liens and statutory liens. Judicial liens are established following a judicial hearing, while statutory liens arise due to state statutes. For example, when a court orders a judgment in a particular party's favor, a judicial lien can be automatically placed on the losing party's personal property, which serves as a security for the judgment satisfaction.
Liens can also be general or specific. In Minnesota, general liens are attached to all the debtors' current and future personal properties. General liens grant lenders the right to sell any of the debtor's properties to satisfy a financial obligation. Specific liens offer no such rights as these types of liens are attached to specific personal properties owned by a debtor. These are "collateral properties," and they are sold if a debtor fails to pay off a debt.
Per section 270C.63 of Minnesota statutes, the penalty for failing to pay state taxes are liens placed upon all properties owned by the debtor within the state. However, selected items are exempted under subdivision 8 of section 270C.63. These liens are both statutory and general, as it arises due to state statutes, and it affects all properties owned by the debtor within the state. A tax collection agency usually sells the affected properties to pay off a taxpayer's outstanding debt. In Minnesota, these liens are typically issued by the Department of Revenue and other related agencies.
How Do I Check for Liens in Minnesota?
Once a lien is recorded in Minnesota, it becomes public information. Therefore, anyone interested in checking for liens in the state would have to contact or visit relevant government agencies/offices.
The Minnesota business and lien systems (MBLS) can be used to obtain lien records online, specifically tax and UCC lien records. Inquirers are required to create an account to order copies of their results. Otherwise, search results can be viewed online through the UCC/tax lien search page provided by the office of the Secretary of State. To perform a search, the inquirer would need to provide either the file number, UCC debtor name, or the tax lien debtor name.
An inquirer would need to visit the recorder office of the country where the property is located and request a title deed search to check for real estate liens. The inquirer would be allowed to view the original records or obtain copies. However, requesting copies attracts service charges. In some counties, the recorder office provides information on properties online using search pages, i.e., the Hennepin county properties information search tool.
Free Lien Search in Minnesota
In Minnesota, free lien searches can be done through government agencies that maintain land ownership records or lien filing procedures. Requestors may visit the relevant agency in person or use online search tools on the websites of relevant government agencies that provide such services. Information on liens retrieved from these agencies would typically include:
- Lienee's full name and home address
- Lienholder's full name and home address
- Type of lien
- The lien's file number
- The date that the lien was filed/recorded
- Status of the lien (active, released, or expired)
- The expiry date of the lien
- Images of other documents related to the lien i.e., lien notices, abstract judgments, the release of lien, etc.
It is important to note that information provided online is not always complete. Inquirers may need to visit the agencies responsible for the record's maintenance to obtain complete official records.
What is a Property Lien in Minnesota?
Property liens in Minnesota are legal claims on an asset to provide security for a creditor. According to Minnesota statutes, property can be used as collateral in a legal agreement and foreclosed on if the lender fails to meet the repayment terms. Property liens encompass other liens such as mortgage, mechanics, environmental, agricultural producers, and medical assistance liens. A property lien creates assurance for a creditor in the form of tangible property, which the lender can repossess and sell to prevent financial loss if the borrower defaults.
How Do You Know if a Property Has a Lien in Minnesota?
Consensual liens attached to an individual's personal or real properties are usually fashioned by their actions. As such, debtors are usually aware of these kinds of liens. However, discovering non-consensual liens is not as straightforward. These liens can be filed either with the Office of Secretary of State or a county recorder. Hence, an individual would need to query relevant offices/agencies to obtain information on liens attached to their properties. The information obtained from these agencies is specific to liens filed with the office or agency. Hence, information on the property of interest is not always complete, as released records on properties do not include all liens placed on that property.
In Minnesota, performing a title deed search through any county recorder office is the most efficient way of finding out if a lien is attached to a particular real or personal property. These searches can help uncover the legal owner of a real estate and any claims or liens that have been placed on a particular property. A good rule of thumb to follow when buying real estate is to hire a real estate attorney or title company to perform a thorough search on relevant properties. Obtaining title insurance can also protect an individual against liens and losses that may be incurred from such liens.
Property Lien Search by Address in Minnesota
Generally, a property lien search in Minnesota can be done at County Recorder and Treasurer’s Offices. A Minnesota resident who wants to find liens on a property can do so online or in person by providing the address of the property. For instance, a requester who wants to find liens on a property by using the property address in Meeker County can do so online at the Treasurer's office. The Office has a Tax & Parcel Search tool that an inquirer can use to check liens on a property via address.
Free Property Lien Search by Address
A person can conduct a free property lien search in Minnesota at County Recorder and Treasurer’s Offices by providing the address of the property. For instance, Steele County Treasurer’s Office has an online tool where an inquirer can conduct a property lien search by address for free. Alternatively, a person who wants to check liens on a property for free by using the property’s address can visit the Steele County Treasurer’s Office during business hours (Monday to Friday, 8 am to 5 pm). The Office is located at:
Steele County Treasurer’s Office
630 Florence Ave,
Owatonna, MN 55060
Phone: (507) 444-7420
Fax: (507) 444-7470
Email: treasurer@co.steele.mn.us
Contact County Recorder and Treasurer’s Offices for more information on how to check for liens on property for free using the property’s address.
What is a Tax Lien in Minnesota?
A tax lien refers to the legal right the government exercises over the property of an individual or a business that fails to pay either state or federal taxes. Tax liens are non-consensual liens initiated by statute either by the federal government or the state government. In Minnesota, tax liens are filed through the Office of the Secretary of State. Tax liens apply to all the property a tax defaulter owns and cannot be released until the debtor pays the outstanding taxes.
Tax Lien Lookup in Minnesota
Anyone in Minnesota can conduct a tax lien lookup because tax liens are deemed public records. County Recorder’s Offices are the repositories that maintain tax liens in Minnesota. Hence, anyone seeking to retrieve tax lien information can do so at the Recorder’s office in the county where land records are kept. For instance, a person can conduct a tax lien lookup in Clay County at the Recorder’s office by asking the staff to help with the search for a per-name fee or visit the Office to view the records for free. A request for a tax lien search on a specific debtor name can be done in the form of a memo, letter, or Uniform Commercial Code (UCC)-12 form.
What is a Mortgage Lien in Minnesota?
A mortgage lien is a property lien used to secure a creditor's interest who provides the money to buy or refinance a house. In a mortgage agreement, the asset used as collateral is the house being purchased or refinanced. The property used as security in this way retains the lien on it until the debtor completes the repayment. If the borrower does not repay the mortgage, the creditor can repossess the house and foreclose it to regain the unpaid amount.
What is a Mechanics Lien in Minnesota?
In Minnesota, mechanic's liens are typically filed by contractors, builders, materialmen, sub-contractors, and suppliers to ensure liquidation does not affect payment. The court legally authorizes contractors and builders to use the property as collateral, and the debtor cannot sell off the property until after settling the debts.
According to Minnesota regulations for mechanic's liens, whoever oversees the erection, fixture, repair, or removal of a building or provides the engineering and surveying service shall have a mechanics lien upon completion of the service to ensure payment. However, if the owing party does not pay, the property will be used as a guarantee to enforce payment.
Although both involve properties, a mechanic's lien is different from a property lien. A property lien gives the creditors access to the borrower's property to settle the debt. In contrast, mechanic's liens ensure payment for every material man, supplier, subcontractor, and contractor according to the contract's terms and conditions. Contractors and other interested parties who perform construction work and seek to file a mechanics lien in Minnesota must:
- Complete the mechanic's lien form, which will consist of a notice of intention to claim and hold a lien, the amount of lien, the personal details and address of the claimant, the personal details of the hiring party, the name of the property owner, and the dates of the last day and first day of work. It must also include the description of the property and its location for identification. The petitioner must sign the documents in the presence of an authorized notary officer.
- Proceed to have the mechanics' lien form recorded in the clerk's office in the county where the property is. Contractors must file the completed form within 120 days after the last day of work. If this time frame elapses, the action automatically becomes invalid.
- Serve the property owner a copy of the mechanic lien in the same time frame of 120 days and acknowledge this on the lien form. Service could be physically or electronically via e-mail.
After filing the mechanic's lien form and serving the property owner, the court schedules a hearing.
If the debtor pays, the petitioner can cancel the mechanic's lien. If there is no payment, applicants can begin a foreclosure lawsuit against the property. Mechanics liens are only valid for a year, so the petitioner must begin foreclosure action as soon as possible, or the lien will be inaccessible.
What is a UCC Lien?
The acronym UCC stands for uniform commercial code, and it is a body of laws that provides the framework for commercial dealings in the United States of America. The UCC is adopted in all states and has different codes for various purposes. In this context, a UCC-1 financing statement broadly referred to as a UCC-1 filing allows creditors to notify the general public that a debtor's property is being used as collateral and will take over the asset if there is a breach in the bargains of a contract. After the loan processing, the filings immediately occur to ensure repayment and protect the creditor from incurring a loss.
In Minnesota, all UCC liens can be filed electronically or in the secretary of state's office. Electronic filing involves 14 essential steps. Manual filing at the Minnesota secretary of state's office consists of completing the necessary forms and paying the validation fees.
How to Conduct a UCC Lien Search
A record seeker can conduct a UCC lien search at the Office of the Minnesota Secretary of State. The search can be done online by file number or UCC debtor name. The file number search is typically for free and does not require an account but the UCC debtor name search requires an account and a subscription. Alternatively, a requester can visit the Office to conduct a UCC lien search. This Office is located at:
Office of the Minnesota Secretary of State
First National Bank Building
332 Minnesota Street, Suite N201
Saint Paul, MN 55101
What is a Judgment Lien?
A judgment lien is a legal action that functions on a judge's ruling. Essentially, the creditor takes the debtor to court to prove that the borrower has fallen short of a contract's terms and conditions. The judge, in turn, places a lien on the defaulter's assets to ensure that the debtor pays the loan. A judgment lien legally authorizes the creditor to take possession of a debtor's property as collateral. Most judgment liens are non-consensual liens, seeing that the lender can take over the debtor's properties like houses and cars without the borrower's consent. The creditor can as well sell these properties to make up the loan.
The Minnesota statutes for judgment liens provide that the county's court administrator must enter every judgment that requires money payment. To attach a lien to a court judgment in Minnesota, it has to be officially recorded with the clerk in the county where the debtor has possessions. In addition to this, a judgment lien can stay valid in Minnesota for ten years and could involve the debtor's future properties.
What is a Federal Tax Lien
Per IRC § 6321, the Internal Revenue Service (IRS) files federal tax liens against taxpayers who have unpaid property taxes. Per IRC § 6322, the lien remains on the taxpayer’s property until the debt is fully paid or the collection statute expiration date (CSED) of the lien has elapsed, usually 10 years (IRC § 6502). Generally, federal tax liens are public records, and they can be accessed at County Recorder’s offices.
What is a Lien Title?
A title lien is a claim or legal right on the title of a property until property debts are fully paid. A title lien also allows lienholders to repossess a person’s property if they default on loans. The presence of a title lien on a property does not mean a person cannot use the property. It just means the person cannot receive the title of the property until they have fully paid off the loan. Once the loan is paid in full, the lienholder will sign the title over to the lienee to signify they have released the lien.
Where and How to Do a Title Search in Minnesota
A real property title search can be done at the Recorder’s office in the county the property is located. For instance, a person who wants to check a property title in Carlton County can do so at the Recorder’s Office. Requests can be made online via the iDoc Market, by mail, or in person. Mail applicants must send written requests that include the document number and appropriate fees in self-addressed stamped return envelopes to:
Carlton County Recorder’s Office
P.O. Box 70
Carlton, MN 55718
Individuals can also visit the public research area at the Office to view and purchase copies of property titles. The Office is located at:
Carlton County Courthouse
301 Walnut
Carlton, MN 55718
Phone: (218) 384-9122
Fax: (218) 384-9157
Email: realestate@co.carlton.mn.us
A motor vehicle title search can be conducted at the Minnesota Division of Driver and Vehicle Services (DVS). A title records request can be made by submitting a Record Request Form (PS2502) by mail to the DVS at:
Driver and Vehicle Services
Records Unit
445 Minnesota Street, Suite 161
St. Paul, MN 55101-5161
Phone: (651) 296-2940 TTY: (651) 282-6555
Email: dvs.dps.mn.gov
Mail-in requesters must submit the application form alongside a valid government-issued ID, driver's license, or notarized signature and the necessary fees. Requesters who are not subject of title records must provide written authorization (Grant Access to Record Authorization Form (PS2506)) from the record holders.
Voluntary Lien vs. Involuntary Lien in Minnesota?
In a voluntary lien, debtors agree with the creditor to put up assets as collateral to repay a loan or pay for a service. When the loanee does not meet the repayment terms, the lender can sell the collateral to make up for the loan. Voluntary liens are always of great advantage to personal loans and other agreements involving finance.
By contrast, involuntary liens are legal claims on properties to guarantee the repayment of debts. Following a contractual breach, the court ruling gives creditors the right to confiscate debtor's properties without the borrower's consent.
The primary difference between a voluntary lien and an involuntary lien is that a voluntary lien requires lesser enforcement because there has been a mutual agreement on the properties if there is a failure to pay. An involuntary lien is enforced by the court and the state's statutes.
How Creditors Collect Payment Through a Lien
In Minnesota, the state Department of Revenue (DOR) is responsible for collecting liens on behalf of creditors(any owned parties). The DOR would take possession of a liened property until the debt or financial obligation has been satisfied. The liened property may also be sold, and other legal actions can be taken against the debtor to satisfy a debt.
How Do I Get a Lien Removed in Minnesota?
Liens filed against a debtor's properties remain attached to their properties until the total amount of an owed sum has been paid or the statute of limitations expires. The statute of limitation is the legal timeframe in which a lien is enforceable.
There are essentially two ways of removing a lien in Minnesota. The first is to pay the total amount of the debt willingly and request that the creditor release the lien - including any court costs or recording fees. However, a lesser sum may be accepted depending on the agreement between the lienholder and the lienee.
Waiting out the statute of limitation is not viable to remove liens since liens can be refiled. On the other hand, a debtor can challenge a lien validity in court to have the lien removed from their property. The lien would only be removed if the lienholder can not prove the lien's legitimacy in court.
How Long Does a Lien Stay on Your Property in Minnesota?
In Minnesota, the type of lien determines how long a lien can stay on a property. Consensual liens are typically valid for the time stipulated in the signed arrangement between the lienholder and the lienee. Non Consensual liens such as judgment lien, tax liens, and UCC lien are enforceable for ten years per its statute of limitation under section 548.09 and section 270C.63 of the Minnesota statute, respectively. Meanwhile, mechanic liens are valid for one year.
How to Avoid a Lien in Minnesota
The best way an individual can avoid a lien in Minnesota is by repaying any debt that they incurred on time (preferably before its due date).
