If you’ve ever been close to a real estate closing only to have a lien surface at the last minute — you know the knot it puts in your stomach. Whether you’re an agent, investor, title professional, or buyer performing due diligence, understanding the types of property liens in New Jersey real estate transactions is foundational.
New Jersey property law gives liens significant legal force. A single unresolved lien can cloud title, delay closing, reduce seller proceeds, or expose a buyer to inherited liability. This article breaks down the most common lien types encountered in NJ transactions and explains what each one means for your deal.
This is a supporting resource for our cornerstone guide, Understanding Property Due Diligence: What Real Estate Professionals Must Verify. If you haven’t reviewed that framework, start there — then use this article as a deeper technical reference focused specifically on liens.
What Is a Property Lien — and Why Does It Matter in New Jersey?
A property lien is a legal claim against real estate that secures payment of a debt or obligation. It creates an encumbrance on title, meaning the property cannot typically transfer free and clear until the debt is satisfied or otherwise resolved.
In New Jersey, liens are recorded at the county level (with the County Clerk or Register of Deeds, depending on the county). Certain liens — particularly judgment liens — are docketed with the New Jersey Superior Court Clerk in Trenton and automatically attach statewide to real property owned by the debtor.
Liens fall into two primary categories:
• Voluntary liens — agreed to by the property owner (e.g., a mortgage).
• Involuntary liens — imposed by statute, court order, or government authority (e.g., tax liens or judgment liens).
Both categories appear during a title search. Both can affect marketability. And in most cases, both must be resolved before closing.
The Most Common Types of Property Liens in NJ Transactions
1. Mortgage Liens (Voluntary)
A mortgage lien arises when a borrower pledges real property as collateral for a loan. The lender records the mortgage in county land records to establish priority.
At closing, existing mortgage liens must be paid off and properly discharged. If the seller has multiple mortgages (first, second, HELOC), each must be satisfied. It is critical to confirm that a Discharge of Mortgage is recorded after payoff to formally clear the lien from title.
Failure to record the discharge can create future title defects.
2. Property Tax Liens (Involuntary)
Unpaid municipal property taxes in New Jersey result in a tax lien under the New Jersey Tax Sale Law (N.J.S.A. 54:5-1 et seq.). Municipalities conduct annual tax lien sales where investors may purchase tax sale certificates.
Key considerations:
• Tax liens generally hold super-priority over most other liens, including previously recorded mortgages.
• Interest rates on tax sale certificates can reach up to 18% annually (subject to bidding structure).
• After a statutory waiting period (generally two years for standard certificates), the certificate holder may initiate foreclosure.
Before closing, municipal tax searches must confirm no outstanding delinquent taxes, assessments, or tax sale certificates.
3. Judgment Liens (Involuntary — Often the Most Disruptive)
When a creditor obtains a money judgment against a debtor, it becomes a statewide lien on all real property owned by that debtor in New Jersey once docketed with the Superior Court Clerk (N.J.S.A. 2A:16-1).
Important points:
• Judgment liens attach automatically to real estate upon docketing.
• They remain enforceable for 20 years.
• They may be renewed for an additional 20 years if properly revived before expiration.
Judgment liens frequently delay closings because payoff amounts may include interest, court costs, and attorney fees. In some cases, negotiation or settlement is required prior to closing.
4. Mechanic's Liens / Construction Liens (Involuntary)
Under the New Jersey Construction Lien Law (N.J.S.A. 2A:44A-1 et seq.), contractors, subcontractors, and material suppliers may file a construction lien if unpaid for work or materials provided.
Critical nuance:
A property owner may face a construction lien even if they paid the general contractor in full. If the contractor failed to pay subcontractors, those subcontractors may assert lien rights.
For residential properties:
• A Notice of Unpaid Balance and Right to File Lien (NUB) must generally be filed within 60 days of last work or material delivery.
• Strict statutory procedures apply before a lien claim can be filed.
Recent construction activity should always trigger enhanced diligence during a transaction.
5. Federal Tax Liens (IRS)
If a taxpayer neglects or refuses to pay federal taxes after demand, the IRS may file a Notice of Federal Tax Lien. This lien attaches to all property and rights to property belonging to the taxpayer.
Federal tax liens are typically filed with the county clerk where property is located (and sometimes indexed through state systems). While priority depends on filing date and federal law principles, IRS liens carry substantial enforcement power.
Before closing, parties must confirm:
• Payoff amount
• Formal lien release, discharge, or subordination (if applicable)
Title insurance cannot be issued without documented resolution.
6. HOA and Condominium Association Liens
Under N.J.S.A. 46:8B-21, condominium associations may place liens for unpaid assessments, fees, and related charges. In certain circumstances, up to six months of unpaid common expense assessments may have limited priority over a previously recorded mortgage.
HOA liens may not always be easily discoverable through standard deed searches. A formal HOA estoppel or status letter is essential to confirm:
• Outstanding balances
• Pending special assessments
• Violations or fines affecting transfer
7. Child Support Liens
Unpaid child support obligations in New Jersey can result in judgment enforcement mechanisms that attach to real property. Once properly docketed, these obligations function similarly to other judgment liens and must be satisfied before clear title can transfer.
Because child support enforcement may involve family court records and probation systems, confirmation sometimes requires deeper court-level verification beyond basic land record searches.
Quick Reference — Property Lien Types in NJ Transactions
| Lien Type | Key Consideration in NJ Transactions |
| Mortgage Lien | Voluntary; must be paid off and released at closing. |
| Property Tax Lien | Involuntary; high priority under NJ Tax Sale Law; up to 18% interest. |
| Judgment Lien | Statewide; enforceable for 20 years; most disruptive to closings. |
| Construction Lien | 60-day filing window for residential; can arise even if owner paid GC. |
| Federal Tax (IRS) Lien | Attaches to all assets; must be resolved before title insurance. |
| HOA / Condo Lien | Limited priority over mortgage; verify via HOA status letter. |
| Child Support Lien | Remains until debt paid; verify through title search and court records. |
Pro Tip for New Jersey Real Estate Professionals
A standard title search is essential — but not always sufficient. Effective due diligence in New Jersey may require:
• County land record searches
• NJ Superior Court judgment docket review
• Municipal tax certification
• IRS lien verification
• Direct HOA inquiry
A layered search approach reduces closing risk.
How Are Property Liens Resolved Before a New Jersey Closing?
Most NJ liens are resolved through one of three methods:
Payoff at closing using seller proceeds.
Negotiated settlement with the lienholder.
Legal discharge, bonding off, or court-ordered removal if improperly filed.
Every resolution must be documented. A recorded discharge, warrant to satisfy judgment, IRS release, or construction lien discharge is required before title insurance can be issued without exception.
Improperly handled lien resolution can create post-closing liability and claims against professionals involved in the transaction.
Why Lien Awareness Is Central to Property Due Diligence
Each lien type discussed above can materially impact transaction timing, financing eligibility, and title insurability.
For real estate professionals, lien awareness is not merely procedural — it is risk management.
At AcerSearch, our platform helps real estate professionals access NJ public records, judgment data, property history, and lien-related information efficiently. Due diligence becomes systematic instead of reactive — allowing you to identify issues early and protect your transaction pipeline.
→ Continue reading: Understanding Property Due Diligence: What Real Estate Professionals Must Verify for the complete framework.
Frequently Asked Questions About Property Liens in New Jersey
Can a buyer purchase a property with a lien in New Jersey?
Legally, yes. Practically, it is uncommon. Most lenders require liens to be satisfied prior to closing. In most transactions, liens are paid from seller proceeds.
How do I find out if a property has a lien in NJ?
A comprehensive title search includes county land records, the NJ Superior Court judgment docket, municipal tax records, and (where applicable) federal lien filings. Licensed title companies or attorneys conduct this search.
How long does a judgment lien last in New Jersey?
A docketed judgment lien remains enforceable for 20 years and may be revived for an additional 20 years if properly renewed before expiration.
What is a construction lien in New Jersey?
A construction lien is a statutory claim filed by a contractor, subcontractor, or supplier who was not paid for work or materials. Residential claims are subject to strict notice requirements, including a 60-day Notice of Unpaid Balance filing.