What Happens If I Have Liens on My House in Indiana?
Discovering a lien on your property can feel like a dead end — but in most cases, liens can be resolved at closing and do not prevent a sale. Marion County and Indianapolis homeowners deal with mortgage liens, mechanic's liens, tax liens, judgment liens, and HOA liens. Understanding what each type means, how it affects your title, and how it gets resolved gives you the clarity to move forward.
Call (317) 495-3440 — Free ConsultationWhat Is a Lien and How Does It Affect Your Property?
A lien is a legal claim against your property that must be satisfied before clear title can transfer to a buyer. Liens attach to the property itself, not just to you personally — meaning they follow the property regardless of who owns it. When you sell your home, the title company conducts a title search to identify all liens. Any outstanding liens must be paid off at closing from the sale proceeds before you receive any remaining equity.
Mortgage Liens: The Most Common Type
Your primary mortgage is a voluntary lien you agreed to when you purchased or refinanced the property. It is the first lien paid at closing. If you have a second mortgage, home equity loan, or HELOC, those are also mortgage liens that must be paid at closing. The total of all mortgage liens plus closing costs determines how much equity you receive from the sale.
Mechanic's Liens: Contractors and Unpaid Work
Under IC 32-28-3, contractors, subcontractors, and material suppliers who performed work on your property and were not paid can file a mechanic's lien. This lien must be filed within 60–90 days of the last work performed and enforced within one year. Mechanic's liens can be disputed if the work was defective or the amount is incorrect. A title company or real estate attorney can help you negotiate or challenge a mechanic's lien.
Property Tax Liens: Priority Claims
Unpaid property taxes result in a tax lien under IC 6-1.1-24. Property tax liens have priority over most other liens, including mortgages. If property taxes go unpaid for 18 months, the county can sell a tax lien certificate to investors. If the certificate is not redeemed within the redemption period, the investor can petition for a tax deed. Paying delinquent taxes at closing is the most common resolution.
Judgment Liens: Court-Ordered Claims
If a creditor wins a lawsuit against you and records the judgment in the county where your property is located, it becomes a judgment lien on all real property you own in that county. Judgment liens must be paid at closing. The amount owed may be negotiable — creditors sometimes accept less than the full judgment amount to facilitate a sale. A real estate attorney can help negotiate judgment lien payoffs.
Indiana Legal References
The following Indiana statutes are referenced on this page. Links go directly to the Indiana General Assembly website.
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