Can You Sell a House With a Lien on It in California?

A lien is a legal claim against your property that secures a debt, and it’s recorded so that anyone buying the house can see it. Most homes have at least one, the mortgage. Having a lien almost never stops you from selling: the liens are paid from the sale proceeds at closing, and the buyer gets clear title. This guide explains how that works in California, the common types of liens and what to do when the money doesn’t stretch far enough or a lien shouldn’t be there at all.

How liens get paid when you sell

Once you’re in escrow, the title company searches the public records and lists every recorded lien in a preliminary title report. Escrow then asks each lienholder for a payoff demand, the exact amount needed to clear its lien as of the closing date. Mortgage servicers have to provide a payoff statement within seven business days of a written request.

At closing, escrow pays each lienholder directly from your proceeds and sends you what’s left. You don’t have to pay the liens off first.

For a mortgage or home equity loan secured by a deed of trust, California law sets deadlines for clearing the record afterward. The lender has 30 days after payoff to send the trustee a request for reconveyance, and the trustee then has 21 days to record it. If 75 days pass without a reconveyance, a title insurance company can record a release. Keep your closing statement until you see the reconveyance recorded.

Common liens and how each one works

Mortgages, second mortgages and HELOCs

These are voluntary liens you agreed to when you borrowed. They’re paid in order of priority, usually the first mortgage, then any second or HELOC. The payoff includes interest up to the closing date and any fees, so it’s often higher than the balance on your last statement.

Property taxes

Secured property taxes are a lien on the home by law. Escrow pays any taxes due, and if past-year taxes are unpaid, it pays the amount needed to redeem them. Our guide to being behind on property taxes in Alameda County explains how back taxes grow and how the county’s payment plan works.

Federal tax liens

If you owe the IRS, its lien attaches to everything you own, including property you acquire later. When you pay the tax debt, the IRS releases the lien within 30 days. When you sell one property, the IRS can issue a certificate of discharge that removes its lien from that property alone. IRS Publication 783 explains who qualifies and how to apply.

Judgment liens

When someone wins a money judgment against you, they can record an abstract of judgment with the county recorder, which creates a lien on real property. It lasts 10 years from the date of the judgment and can be renewed. If you recorded a homestead declaration before the judgment lien was recorded, the lien generally reaches only the equity above your existing loans and the homestead exemption. Liens for child or spousal support are treated differently, and an attorney can tell you how the rules apply to you.

Mechanics liens

A contractor or supplier who wasn’t paid for work on the house can record a mechanics lien. The claimant then has 90 days to file a lawsuit to enforce it. If no suit is filed in time, the lien expires and can’t be enforced, and you can ask a court for an order releasing the property from it.

HOA liens

If you fall behind on HOA dues, the association can record a notice of delinquent assessment, which makes the unpaid amount, plus allowed costs, late charges and interest, a lien on your home. In some cases an HOA can foreclose on that lien, so it’s worth dealing with quickly.

Code enforcement liens

When a city cleans up or repairs a nuisance on a property and the owner doesn’t pay, it can record a nuisance abatement lien, which has the same priority as a judgment lien. Some cities instead add the cost to the property tax bill as a special assessment. Either way, the amount is paid at closing. Ask the city for a written payoff and a release.

What if the sale won’t cover every lien?

Liens are paid in order of priority, and any lien that won’t be paid in full has to be released by agreement before the sale can close. You have a few ways to bridge the gap:

Bring cash to closing to cover the difference.
Ask the lienholder to accept less in exchange for a release. Judgment creditors, contractors and others sometimes agree when the alternative is waiting or getting nothing, but they don’t have to.
If a mortgage is the problem, ask the lender for a short sale. In California, once a lender agrees in writing to a short sale of a home of one to four units, it can’t collect the rest from you afterward. Our guide to short sales versus foreclosure covers the details.

A lien can also be released from one property while it stays on others. An IRS certificate of discharge works this way, and other creditors with liens on more than one property can sometimes agree to release just the house you’re selling. For a fuller look at selling when you owe more than the house is worth, see selling your house for less than you owe.

Old, paid or disputed liens

Title searches often turn up liens that should have been cleared years ago:

A paid lien that was never released. Find your proof of payment and ask the creditor to record a release. For a paid-off deed of trust, the reconveyance deadlines above apply.
An expired mechanics lien. If no lawsuit was filed within 90 days, the lien can’t be enforced, but it still shows in the records until it’s released. The title company will tell you what it needs to clear it.
A lien you dispute. Don’t wait until you’re in escrow. A real estate attorney can review whether it’s valid and how to clear it, which can take longer than the rest of the sale.

Liens can hold up a closing, so ordering a title report early helps.

Selling a house with liens to a cash buyer

A direct sale works the same way: the title company orders the payoffs, and every lien is paid or released at closing. EZ Home Offer buys houses as-is across Alameda County, and liens are paid from the proceeds at closing like in any other sale. You get a written cash offer, usually within 24 hours. We charge no fees or commissions and cover typical closing costs. Closing can happen in as little as 3 days once title is clear. Clearing liens is part of getting title clear, so the more liens there are, the longer that step can take. A cash offer is usually below full market value, so compare what you’d net. You can see how our process works before you call.

Sources

General information about California rules as of October 3, 2026, not legal, tax or financial advice. Laws change and every situation is different, so check the details with an attorney, CPA or other professional.