A judgment lien is a court-ordered lien placed on a debtor's property as a result of a lawsuit in which the creditor prevailed and was awarded a money judgment. When a creditor wins a judgment and properly records it with the county (or in some states, the judgment automatically attaches), it becomes a lien against any real property the debtor owns in that county. The lien gives the creditor the right to be paid from the proceeds if the property is sold, and in some cases, the creditor can force a sale of the property to collect the debt.
Judgment liens can arise from virtually any type of lawsuit that results in a money judgment: unpaid credit card debts, personal injury lawsuits, breach of contract claims, unpaid medical bills, deficiency judgments after foreclosure, divorce-related obligations, and business disputes. Federal tax liens from the IRS operate similarly but have their own recording requirements and priority rules. Child support judgments may also create liens on real property.
The priority of a judgment lien depends on when it was recorded relative to other liens. In general, the "first in time, first in right" rule applies — earlier-recorded liens have priority over later ones. However, property tax liens and certain government liens have statutory priority that supersedes recording order. A judgment lien recorded before a mortgage would have priority over that mortgage — which is why lenders require a thorough title search before funding any loan.
In Florida, judgment liens are valid for 10 years from the date of recording and can be renewed for an additional 10 years if properly re-recorded before expiration. Even if the debtor does not currently own real property in the county, the lien attaches to any property they later acquire in that county during the lien's validity period. In Texas, abstract of judgment liens last for 10 years and can be renewed. These long validity periods mean that old judgments can surface during a title search and must be addressed.
Judgment liens must be paid off or otherwise resolved before the property can be sold with clear title. The settlement agent arranges for payoff from the seller's proceeds at closing and obtains a satisfaction of judgment from the creditor, which is then recorded to release the lien. In some cases, the judgment amount can be negotiated — creditors may accept less than the full amount to avoid the time and expense of enforcement. At Beycome Title, we identify all judgment liens during the title search and coordinate payoffs to ensure clear title at closing. Get your free title quote.