A lien sale is the sale of the claim or "hold" placed on an asset to satisfy an unpaid debt. Typically, lien sales are conducted as public auctions and the lien is on real estate, automobiles and other personal property. Depending on a particular state's laws, contractors, subcontractors and suppliers may put a lien on a piece of property they have worked on pending payment for services rendered.


Buying delinquent tax-liens at a sale is becoming an increasingly popular form of investing, and is similar to purchasing a long-term Certificate of Deposit (CD). However unlike a CD, tax-liens cannot be sold back to the taxing authority and must be held until they are repaid. Redemption of the purchased lien is typically at a given rate of return within a specified time frame.

How Lien Sales Can Be a Source of Revenue

Lien sales for unpaid debts on a property can result in the amount owed increasing further. When the lien debt is sold, usually by a local government agency, the buyer can employ a lien servicing company that may add more fees and interest to the lien. This allows the buyer to see a return on their investment as the debtor must now pay the additional costs imposed.

In many instances, several notices of an impending lien sale will be sent to the debtor before a file notice stating the approaching date for the auction.

Though a debtor may owe on taxes and other sees, there can be exceptions that will their property and other assets from being subject to a lien sale. For example, disabled homeowners, senior citizens, and veterans could receive exemptions. Active duty military personnel might also be eligible for exemption for lien sales on their property. Each jurisdiction will have its own criteria, application process, and window of time when the responsible agency must be contacted.

Owners of property that is subject to a lien sale can bring get their property removed from such sale by making payment arrangements to bring their outstanding debt up to date.

There may be special procedures for different types of lien sales, such as auction for a vehicle of a certain value. How that is handled can differ from a lien sale for the contents a self-storage unit if the owner fails to pay their bills to the storage company on time.

Notices for lien sales might be posted online by the overseeing local agency as well as in local newspapers.