Tax Lien

A tax lien is a legal claim placed by the government on a property when the owner fails to pay owed taxes, such as income, property, or business taxes. This lien secures the government’s interest in the property until the debt is paid off. A tax lien can hinder the owner’s ability to sell or refinance the property and may lead to foreclosure if unresolved. 

In loan management, it’s important to identify tax liens because they take precedence over other debts, increasing the risk to lenders.