Robbins: How liens give you muscle to enforce a debt (column) | VailDaily.com

Robbins: How liens give you muscle to enforce a debt (column)

Rohn K. Robbins
Vail Law

Lean on me when you're not strong
I'll be your friend, I'll help you carry on
For it won't be long
'Til I'm gonna need somebody to lean on.

— Bill Withers, "Lean on Me."

OK, it's not exactly like that. And it's spelled a little differently: "lien," not "lean." But hey …

So, anyway, what is it? What exactly is a lien?

Well, first things first: How do you pronounce the little devil? Is it one of those "you say po-Ta-to, I say po-TAA-to" kind of things? Yup, sorta. In an informal survey taken among attorneys, most — to my ears anyway — say "lean," just like the song. Others say "LEE-an" which, sticking with our musical theme, rhymes with Rimes (of the LeAnn variety). To be candid, there really was no survey other than me listening to other lawyers over the years and reaching the conclusion that "lean" is the preferred alliteration.

Whichever way you say it, a lien can spell trouble. But not necessarily so. A lien can also be a sort of place marker — although with substantially more heft — securing such things as a mortgage.

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A lien is a charge, security or encumbrance upon property.

There you have it; dare I say, a lean definition of a lien.

OK, try this: A lien is a claim or charge on property for the payment of a debt, obligation or duty. A lien secures the payment of a debt or other obligation by glomming on to something of value.  A lien gives a person an interest in somebody else's property. It provides security to somebody, who can take the property of another or take other legal action to satisfy debts and other obligations. A lien is a tie that binds property to a debt or claim for satisfaction of that debt or claim.

Let's look at an example.

Say you loan me money for, let's say, the purchase of a Popsicle. In days of miracles and wonder, a Popsicle goes for a buck. We agree that your largesse will come with strings attached. You want to turn a little profit. The loan will be extended to me at five percent per diem, simple interest. In other words, if I pay back the loan within a day, I will owe you a dollar and five cents. Let's say, though, I enjoy my Popsicle but decide you've taken advantage of me. In retrospect, five percent per diem seems a little steep and, anyway, I've enjoyed my Popsicle and the urgency to repay you is not nearly equal to the craving that created the debt. In a huff, I decide to blow you off. "Pound sand," I say, or something to that effect when you ask me for repayment.

Where does that leave you, other than out your buck and the interest you were expecting? Well, nowhere really. The Popsicle is gone. You can't demand the Popsicle in satisfaction of the debt. Your recourse, then, would be to go to court and state your case. You would claim I breached our contract and you are, accordingly, entitled to repayment of the buck you loaned me plus interest as provided under our agreement. For a buck, though, you probably will just pound sand. And not loan me money in the future.

Say the stakes are a little higher though. Rather than a Popsicle, what I want is to remodel my house. The remodel work will cost $100,000. I decide that you'd be the perfect person to perform the work. We agree on the tab and you order materials, line up your troops and get to work. Then, when you put in three-quarters of the work, I get cold feet. I decide the house was just fine the way it was. I tell you to stop and you tell me to pay. I tell you, to borrow a line that worked well before, "Pound sand!"

This time, though, although the stakes are higher, you are better off. You know about mechanic's liens and the laws that support them. Unlike the popsicle, my home has not melted into nothingness and, by statute, not only are you entitled to be paid, but you can compel my payment.

Under the mechanic's lien law, you can stake a claim against my property as security for payment under our agreement. Provided you comply with all statutory requisites, you can lien my property. And once the property is liened, if I continue to thumb my nose at you, you can begin foreclosure of the lien. In other words, you can commence legal proceedings whereby the home will be sold and the proceeds of the sale will be applied in satisfaction of my debt. For me, as the debtor, this is, obviously, a whole different kettle of fish. Rather than walking smugly away and ignoring my obligation to you, you have real leverage to ensure that you are paid. You see, your lien right binds my property— the specific property you benefitted — to satisfy the debt.

There are, as you might guess, a whole slew of liens, a smattering of which includes architect and artisan liens, attorney liens, equitable liens, execution liens, factor's liens, judgment liens, tax liens and vendor's liens.

What is a lien? Its entomology is helpful. The word derives from the Latin "ligare" (think "ligature") which means to bind. Simply, the debt is bound to the property securing payment of the debt. It is a happy semantic coincidence perhaps that a lien allows you to lean on the debtor for payment of the debt and does so by binding something real and tangible (that is, the property) to what might otherwise be ethereal and, certainly, more challenging to enforce.

Liens give you muscle to enforce a debt.

Sometimes, anyway, we're gonna need somebody to lien on.

Rohn K. Robbins is an attorney licensed before the bars of Colorado and California who practices in the Vail Valley with the law firm of Stevens, Littman, Biddison, Tharp & Weinberg LLC. His practice areas include business and commercial transactions, real estate and development, family law, custody and divorce, and civil litigation. Robbins may be reached at 970-926-4461 or at his email address, robbins@slblaw.com.