Various entities can encumber a California property with a lien, a legal claim against assets typically used as collateral to satisfy a debt. These include government agencies (for unpaid taxes or other assessments), contractors, subcontractors, and suppliers (for work performed or materials provided but not paid for, also known as mechanics’ liens), homeowners’ associations (for unpaid dues), and individuals or businesses who win judgments in court against a homeowner.
The ability to encumber a property with a lien provides a critical mechanism for ensuring debts are paid. It protects the interests of creditors by offering a legal recourse for recovering funds owed. This system supports responsible financial practices in real estate and construction, encouraging timely payments and contributing to a stable market. Historically, liens have been an essential element of property law, providing a consistent means of securing obligations related to real property.
