Legal Definitions - Statutory lien

A statutory lien is a legal claim or right against a property that is established and governed by a specific law (a statute) passed by a legislative body. Unlike liens that arise from contracts or common law principles, a statutory lien's existence, scope, and enforcement are directly outlined in the written law. These statutes also typically define the conditions under which the lien arises, the type of property it affects, and its priority relative to other claims on that property.

Here are some examples to illustrate this concept:

• Property Tax Lien

  Scenario: A homeowner fails to pay their annual property taxes to the local government.

  Explanation: State or municipal statutes automatically grant the local government a lien on the homeowner's property for the unpaid taxes. This lien exists because a specific law dictates it, not because the homeowner agreed to it or a court ordered it based on common law. The statute also typically grants this type of lien a very high priority, often superior to most other claims on the property, ensuring the government can collect essential revenue.

• Mechanic's Lien (Construction Lien)

  Scenario: A general contractor completes a major renovation on a commercial building, but the property owner refuses to pay the agreed-upon amount for the work and materials.

  Explanation: In many jurisdictions, state statutes allow the contractor to file a "mechanic's lien" (also known as a construction lien) against the property. This lien is created by law to protect those who provide labor or materials for property improvements. The statute specifies the requirements for filing the lien, the timeframe, and how it can be enforced if payment is not received. Without this specific statute, the contractor would only have a contractual claim, not an automatic property lien.

• Federal Tax Lien (IRS Lien)

  Scenario: An individual owes a significant amount of unpaid federal income taxes to the Internal Revenue Service (IRS).

  Explanation: Federal law (specifically, the Internal Revenue Code) grants the U.S. government a statutory lien on all of the taxpayer's property and rights to property, both real and personal, when federal taxes are not paid after demand. This lien arises automatically by operation of federal statute once the IRS assesses the tax and sends a notice and demand for payment, giving the government a powerful tool to collect outstanding tax debts.