Perfected Lien


DEFINITION of 'Perfected Lien'

A security interest in the collateral that is used to secure the performance of a debt that is protected from third-party claims. A perfected lien for real property must be filed with the correct legal authority. Perfected liens for real estate are achieved when the mortgage deed of trust is recorded in the land records of the appropriate municipality.

BREAKING DOWN 'Perfected Lien'

Perfected liens on personal property are created when the lender files a Form UCC-1 financing statement with the correct authority (usually the office of the secretary of the state or the office of the county recorder). This statement will outline the type and location of the collateral used to secure the loan. The filing statement gives the lender precedence in the collection process if the borrower defaults.

  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. UCC-1 Statement

    One of the standard mortgage documents listed in the Uniform ...
  3. Unperfected Lien

    A lien for which the holder has not provided a valid claim. Unperfected ...
  4. Prior Lien

    A lien that is recorded prior to any other claims. Prior liens ...
  5. Real Property

    Any property that is attached directly to land, as well as the ...
  6. Lien

    The legal right of a creditor to sell the collateral property ...
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