Judgment
Definition and meaning of Judgment in real estate.
Judgment is a formal decision issued by a court of law that resolves a dispute and determines the rights and obligations of the parties involved.
In more detail
When a creditor wins a lawsuit for unpaid debt, the court issues a judgment for the amount owed. To secure the debt, the creditor can record this judgment in the county where the debtor owns real estate, creating a judgment lien. This lien attaches to the property and must be paid off before the owner can sell or refinance the home.
The duration of a judgment lien varies by state, but it can typically be renewed if the debt remains unpaid.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Applies to | Real estate owned by the debtor in the county of recording |
| Watch out for | Title clouds that prevent closing until the debt is satisfied |
| Typical duration | Varies by state, often five to ten years unless renewed |
A contractor sues a homeowner for unpaid renovation work and wins a judgment. The contractor records the judgment at the county clerk office, which places a lien on the home, preventing the owner from selling it until the contractor is paid.
Frequently asked questions
How does a judgment lien affect a home sale?
A judgment lien creates a cloud on the title, meaning the property cannot be sold with clean title. The seller must pay off the judgment at or before closing to clear the lien.
Can a judgment lien attach to a primary residence?
Yes, a judgment lien can attach to a primary residence, though homestead exemptions in some states protect a portion of the equity from forced sale by creditors.