Discovering that your property has a lien against it can feel like a roadblock, but it doesn’t have to stop your sale. Liens are more common than most people realize, and in many cases they can be resolved as part of the sale process itself.
Here’s what you need to know about selling a home with liens in Edmonton.
What Is a Lien?
A lien is a legal claim registered against your property by a creditor. It gives that creditor the right to be paid from the proceeds of any sale before you receive your equity. Liens can be registered by mortgage lenders, the Canada Revenue Agency for unpaid taxes, contractors for unpaid work, or judgment creditors following a court ruling.
In Alberta, liens must be registered on title, which means they’ll show up in a title search during any real estate transaction.
Common Types of Liens on Edmonton Properties
Mortgage liens are the most common, your lender holds a lien on your property until the mortgage is paid in full. These are standard and resolved automatically at closing when the mortgage balance is paid from sale proceeds.
Builder’s or contractor’s liens, sometimes called mechanic’s liens, are registered when a contractor or tradesperson hasn’t been paid for work done on the property. These are common on properties that have undergone renovation.
CRA liens can be registered if you owe back taxes. These are serious and must be addressed before or during the sale.
Judgment liens arise from court decisions where a creditor has been awarded money against you and has registered that judgment against your property.
Can You Sell With a Lien on Title?
In most cases, yes, but the lien must be resolved at or before closing. If the sale proceeds are sufficient to pay off the lien, it can simply be settled at closing and removed from title as part of the transaction. Your lawyer or notary handles this as part of the closing process. If the liens exceed the value of your property, the situation is more complex and you’ll need legal and potentially financial advice to navigate your options.
Don’t Let a Lien Stop You From Exploring Your Options
Many homeowners with liens assume they can’t sell and simply do nothing, which often makes the situation worse over time. The truth is that experienced buyers and real estate professionals deal with liens regularly and can help you find a path forward.
At FairKey Home Buyers, we’ve purchased properties with various encumbrances and we’re happy to walk you through the process honestly. Give us a call at 587-401-2627 or reach out through our website.