Owning property in Alabama can be complicated by liens. A lien is a legal claim against a property that can affect its sale, refinancing, or clear ownership. For homeowners, investors, or those managing inherited property, understanding liens is important for protecting financial interests. Liens arise from various situations and have different consequences depending on their type and when they were established.
Types of Liens Under Alabama Law
Alabama law recognizes several types of liens on real property, each arising from different situations and governed by specific state regulations.
Mechanic’s Liens
Mechanic’s liens are for individuals or companies that provide materials, labor, or services for property construction or improvement but are not paid. Alabama Code Section 35-11-210 allows those who perform work or supply materials under a contract with the owner or their representatives to claim this lien.1Justia Law. Alabama Code § 35-11-210 (2020) – Lien Declared This includes direct contractors, subcontractors, and suppliers. The lien attaches to the building, the improvement, and the land, securing the debt.
Judgment Liens
A judgment lien arises after a court awards money to a creditor, who then links the judgment to the debtor’s real estate. In Alabama, a judgment becomes a lien when a certificate of judgment is recorded with the probate judge in the county where the property is located, as per Alabama Code Section 6-9-211.2Justia Law. Alabama Code § 6-9-211 (2024) – Judgment Constitutes Lien on Property of Defendant This recorded judgment encumbers all real property the debtor owns in that county for ten years from the judgment date. If the debtor sells property with an attached judgment lien, the new owner typically takes the property subject to the lien, meaning the creditor might still force a sale to settle the debt.
Tax Liens
Governmental bodies impose tax liens for overdue taxes, such as property taxes and state income taxes. If property taxes are unpaid, a lien automatically attaches to the property. Alabama Code Section 40-1-3 states that Alabama holds a lien for all unpaid taxes, which usually takes priority over other liens.3Justia Law. Alabama Code § 40-1-3 (2024) – Lien for Taxes – Date of Lien Unpaid state income taxes can also lead to a lien on a taxpayer’s real property, potentially resulting in its forced sale. Federal tax liens, governed by federal law, can also affect property in Alabama.4Internal Revenue Service. Understanding a Federal Tax Lien
Priority Rules for Property Liens
When multiple liens are on the same Alabama property, priority rules determine who gets paid first. These rules often follow the first in time, first in right principle: the lien recorded earliest usually has higher priority.
If a property is sold to cover debts, proceeds are paid to lienholders based on their priority. However, the first in time, first in right rule has exceptions. State tax liens, for instance, often take precedence over most other liens, regardless of when they were recorded.
Mechanic’s liens in Alabama have unique priority rules. These liens can relate back to when work started or materials were first supplied, not just the filing date. Alabama Code Section 35-11-211 states these liens are preferred over others that attach after work began.5Justia Law. Alabama Code § 35-11-211 (2021) – Priority of Lien This relation back feature can give a mechanic’s lien priority over a mortgage recorded after work started but before the lien was filed. A mechanic’s lien does not usually supersede a mortgage recorded before any work began.
The priority of judgment liens is determined by their recording date in probate court records, following the first in time, first in right principle.
Filing Requirements in Court Records
To be formally recognized and serve as public notice, liens against real estate in Alabama must be filed in the county court records where the property is located. The Office of the Judge of Probate in each county is the main depository for these records.
Individuals or companies providing unpaid labor, services, or materials for property improvements can file a mechanic’s lien. This requires filing a verified statement with the Judge of Probate in the property’s county. Alabama Code Section 35-11-213 states this statement must include:
- The amount owed
- A description of the labor or materials
- The owner’s name
- An adequate property description
6Justia Law. Alabama Code § 35-11-213 (2024) – Verified Statement – Duty to File; Contents; Form
Filing deadlines are strict. Original contractors must file within six months after completing work or supplying materials. Journeymen and day laborers have 30 days to file their initial statement and then four months from that statement to file the lien. Materialmen and subcontractors must file their verified statement within four months after the debt accrues.
Governmental entities also file liens for unpaid tax debts. For overdue state income or business taxes, the Alabama Department of Revenue can file a certificate of lien in the probate court of the county where the taxpayer’s property is located. While property tax liens often arise automatically by law, records of delinquency and actions on unpaid property taxes are managed by county tax officials and become part of public land records.
Enforcement Procedures
Once a lien is correctly filed against an Alabama property, the lienholder can use legal methods to collect the debt. Enforcement procedures vary by lien type but often involve court action and potentially the forced sale of the property.
Mechanic’s lien holders enforce their liens by filing a lawsuit. Alabama Code Section 35-11-221 requires this legal action to start within six months after the debt matures.7Justia Law. Alabama Code § 35-11-221 (2024) – Limitation of Actions The lawsuit, filed in the circuit court of the property’s county, seeks a judgment confirming the lien and the amount owed. A favorable ruling can lead to a court order for the property’s sale to cover the debt.
To enforce a judgment lien after it’s recorded, a creditor can pursue the property’s sale. This involves obtaining a writ of execution from the court, which instructs the county sheriff to seize and sell the debtor’s property. The sheriff conducts a public sale, and proceeds are applied to the judgment, with any surplus returned to the property owner.
Governmental bodies have specific methods for tax lien enforcement. For unpaid state taxes, the Alabama Department of Revenue can levy on a taxpayer’s property, which may involve seizure and sale (Alabama Code Section 40-29-23).8Justia Law. Alabama Code § 40-29-23 (2024) – Levy and Distraint For delinquent property taxes, counties can sell tax liens or the property itself, often through a public auction (Alabama Code Title 40, Chapter 10). If a tax lien is sold and the owner doesn’t redeem the property by paying the dues within the set timeframe, the lien purchaser can sue to acquire title.
Steps to Release or Satisfy a Lien
To remove a lien recorded against Alabama property, the underlying debt must be fully paid. Once paid, the lienholder is obligated to formally release the lien.
After a mechanic’s lien is paid, the claimant must acknowledge its satisfaction. Alabama Code Section 35-11-231 requires the lienholder to note satisfaction on the record in the probate judge’s office or file a separate release document. This recorded release, often called a release of lien or satisfaction of lien, is filed where the original lien was recorded. If a lienholder fails to release a satisfied mechanic’s lien promptly after a written request, they may be liable for damages.9Justia Law. Alabama Code § 35-11-231 (2020) – Acknowledgment of Satisfaction
When a judgment lien is fully paid, the judgment creditor must indicate the judgment’s satisfaction. The creditor files a satisfaction of judgment with the court clerk that issued it. A certified copy is then recorded in the probate court of any county where the certificate of judgment was filed. This recording is necessary to clear the lien from property records. Probate offices may have specific forms or fees for this process.
Releasing tax liens involves the governmental taxing authority. After payment of state taxes that resulted in a lien, the Alabama Department of Revenue issues and records a lien release in the counties where the original lien was filed. For local property tax liens, paying delinquent taxes, interest, penalties, and costs to the county tax official satisfies the lien. If a tax lien certificate was sold, the owner redeems the property by paying these amounts to the official, who then processes the redemption.
Property owners should ensure any lien release or satisfaction document is correctly and promptly recorded in the public records of the property’s county, usually the Office of the Judge of Probate. This recording officially documents the lien’s removal and helps maintain a clear property title. Many probate offices now offer electronic recording, which can expedite this. Failing to properly record a lien release can cause future title problems, affecting sales or refinancing.
Dispute Resolution in Lien Matters
Disagreements over Alabama property liens can be resolved through the court system or alternative methods. The nature of the dispute and the type of lien often guide the approach.
A property owner who believes a lien was improperly filed or is incorrect can legally challenge its validity, often by suing in the circuit court of the property’s county. The court reviews evidence from both the owner and claimant to assess the lien’s legitimacy. Grounds for dispute can include procedural errors, such as failing to give proper notice or meet filing deadlines, or inaccuracies in the lien statement, like an incorrect property description or an exaggerated amount owed.
A quiet title action is another legal tool for resolving lien disputes. This lawsuit aims to establish clear property ownership and remove clouds on the title, like contested liens. An owner might file a quiet title action if a paid lien was not correctly released or if there is a fundamental disagreement over the debt. A court judgment in such an action defines the rightful owner and can nullify other claims.
Parties in a lien dispute can also request a declaratory judgment under Alabama Code Section 6-6-222.10Justia Law. Alabama Code § 6-6-222 (2022) – Power of Courts of Record; Form and Effect of Declarations This allows a court to define the parties’ rights or the lien’s validity before enforcement actions, such as foreclosure, start.
Alternative dispute resolution (ADR) methods like mediation or arbitration can also resolve lien disagreements. Mediation involves a neutral third party helping parties negotiate a settlement. Arbitration is more formal, with an arbitrator making a decision after hearing evidence, which can be binding. ADR can be quicker and more cost-effective than a trial. Some contracts may require attempts at mediation or arbitration before litigation.