What is a voluntary lien?

A voluntary lien is established when the property owner willingly agrees to a lien on their property, typically as part of a financing agreement such as a mortgage. This type of lien is created with the consent of the property owner, who acknowledges the obligation to a lender or another party that is providing funds, thereby allowing them to have a legal claim against the property for the amount owed.

In this scenario, if the owner defaults on their obligations, the lienholder has the right to pursue the property to recover the outstanding debt. This contrasts with involuntary liens, where the owner does not consent, and those liens arise through legal actions, such as judgments or tax liens, imposed without the owner's agreement.

Understanding the distinction between voluntary and involuntary liens is crucial for anyone entering the real estate field, as it affects property ownership, obligations, and potential risks for buyers and sellers alike.