A lien is a legal claim against a property that serves as security for a debt or obligation, and it must be resolved before the property can be sold free and clear.
Liens can come from many sources: unpaid mortgages, tax debts, contractor bills, or court judgments. When purchasing any real estate, a title search is conducted to identify existing liens so they can be settled at closing. In co-ownership, liens are particularly important to understand because a claim against the property or its holding entity could affect all owners, not just the one who incurred the debt.
GoForth, a luxury co-ownership company, conducts thorough due diligence and title searches on every property before acquisition to ensure there are no outstanding liens. Each home is held in a dedicated LLC, which provides an additional layer of protection by separating the property from any individual owner's personal liabilities. This structure ensures that one family's financial situation cannot create a lien that puts the other three co-owners at risk.