Legal Definitions - lienee

A lienee is an individual or entity whose property is subject to a legal claim known as a lien. This means that someone else (the lienholder) has a legal right to hold or sell that property as security until a debt or obligation owed by the lienee is satisfied. Essentially, the lienee is the person or entity who owns the property that has a lien placed on it.

Here are some examples to illustrate the concept of a lienee:

• Homeowner with a Mortgage:

  When Maria buys a house, she typically takes out a mortgage loan from a bank. The bank then places a mortgage lien on Maria's new home. This lien gives the bank a legal claim to the property if Maria fails to make her loan payments as agreed.

  In this scenario, Maria is the lienee because her house is the property that is subject to the bank's mortgage lien.

• Car Owner with Unpaid Repairs:

  John takes his car to an auto repair shop for extensive engine work. After the repairs are completed, John is unable to pay the full amount of the bill. Under state law, the mechanic's shop places a mechanic's lien on John's car. This lien allows the shop to legally retain possession of the car or, in some cases, sell it to recover the cost of the repairs if John does not pay.

  Here, John is the lienee because his car is the asset against which the mechanic's shop has asserted a lien.

• Business with Unpaid Taxes:

  A small manufacturing company, "Precision Parts Inc.," falls behind on its federal income tax payments for several fiscal years. To recover the outstanding debt, the Internal Revenue Service (IRS) places a federal tax lien on Precision Parts Inc.'s assets, which could include its factory building, machinery, and bank accounts. This lien ensures the government has a legal claim to these assets to recover the unpaid taxes.

  In this situation, Precision Parts Inc. is the lienee because its property and assets are encumbered by the IRS's tax lien.