Sell a House With a Lien in Texas

How Liens Actually Get Paid at a Texas Closing

If you want to sell a house with a lien in Texas, the process is more mechanical than most people expect. Once you sign a purchase contract, the title company opens a file and runs a title search. That search pulls everything recorded against your property in the county’s real property records, plus any unpaid property taxes on file with the tax office.

Then the title company asks every lienholder for a payoff letter. Those numbers go on the closing statement. At closing, the money moves in order: liens and the mortgage get paid, and whatever’s left goes to you. The buyer gets clear title. The lienholders get paid. You get a check.

You don’t call the county. You don’t negotiate with the HOA. The title company handles the payoffs from the sale itself.

Property Tax Liens: Automatic, First in Line, and Expensive

Texas property tax liens don’t get filed. They exist. On January 1 of every year, a lien attaches to your property for that year’s taxes by operation of law. Pay on time and nobody ever notices it. Stop paying and it becomes the most powerful lien on your title.

Under Texas Tax Code § 32.05, a property tax lien takes priority over the mortgage, judgment liens, and pretty much everything else. Federal law puts it ahead of an IRS lien too. When the title company disburses funds, the tax office gets paid before anyone else.

What Delinquent Taxes Actually Cost

Taxes go delinquent February 1. The penalty starts at 6%, goes up 1% a month, and jumps to 12% on July 1. Interest runs 1% a month on top of that. After July 1, many taxing units hand the account to a collection law firm and add a fee of up to 20%. On a $6,000 tax bill left unpaid for two years, you can easily owe $9,000 or more by the time you sell.

And remember, it’s not one bill. Your property might be taxed by the county, the city, the school district, a hospital district, and a MUD. Some counties collect for all of them. Some don’t. Each unpaid account is its own lien and its own payoff letter.

If back taxes are the main issue on your property, our guide on selling your house when you owe back taxes goes deeper on payment plans, deferrals, and timing.

Judgment Liens and Your Texas Homestead

This is the part most sellers never hear about, and it’s the one that can save you the most money.

When a creditor wins a lawsuit against you, they can record an abstract of judgment in the county where you own property. Under Texas Property Code Chapter 52, that creates a judgment lien on your non-exempt real estate in that county. It generally lasts 10 years from the date it’s recorded.

The key words are non-exempt. Texas protects your homestead from most creditors under the state constitution. A credit card company, a medical provider, or a former landlord with a judgment generally can’t force a sale of your home. The lien doesn’t attach to homestead property, so it shouldn’t come out of your proceeds when you sell.

The Homestead Affidavit

Here’s the problem. Title companies still see that abstract on the record, and some won’t insure around it. Texas Property Code § 52.0012 gives you a fix. You file a homestead affidavit in the county records and send a copy to the judgment creditor by certified mail. If the creditor doesn’t file a contradicting affidavit within 30 days, the affidavit works as a release of the lien on your homestead. Done right, a judgment lien on your house goes away without you paying it.

HOA Liens: Small Balances, Slow Paperwork

HOA liens come from the deed restrictions you agreed to when you bought. If dues or assessments go unpaid, the HOA can lien the property, and in many Texas communities it can foreclose. Texas Property Code Chapter 209 limits that power. Under § 209.009, an HOA can’t foreclose when the only debt is fines or the attorney fees tied to those fines. Unpaid assessments are a different story.

At closing, the HOA lien gets handled like a tax lien. The title company orders a payoff and resale certificate, pays the balance plus fees from your proceeds, and the lien releases.

The money usually isn’t the problem. The timing is. Some management companies take two to three weeks to send a payoff, and they often tack on transfer fees, resale certificate fees, and collection charges you didn’t know about. Call them before you accept an offer. Ask for a written statement of everything owed.

Mechanics Liens: Check Before You Pay

A contractor or supplier who says they weren’t paid can file a mechanics lien under Texas Property Code Chapter 53. On a homestead, Texas makes that hard. The contractor needs a written contract signed before the work started, signed by both spouses if you’re married, plus specific notice language. Miss those steps and the lien usually isn’t valid against your home.

Filing deadlines are strict too. A lien filed late, filed on a homestead without the required contract, or filed for more than what’s owed can be challenged. Texas gives owners a faster tool for this: a summary motion to remove an invalid lien under § 53.160.

If the lien is valid and you don’t dispute the bill, it gets paid at closing. If you do dispute it, sort that out before closing, not after. Our full Texas mechanics lien guide walks through deadlines, homestead rules, and the removal process.

IRS Liens and Child Support Liens

Federal Tax Liens

An IRS lien attaches to everything you own, homestead included. It doesn’t stop a sale. But it doesn’t go away on its own either, and the IRS doesn’t move at title company speed.

If your equity covers the full balance, the title company pays the IRS from proceeds and gets a release. If it doesn’t, you’ll need a certificate of discharge. That’s IRS Form 14135, and the IRS asks for it at least 45 days before closing. Build that into your timeline or the closing date will slip.

Child Support Liens

Unpaid child support creates a lien under Texas Family Code Chapter 157. It attaches to your non-homestead real property. Same homestead protection as judgment liens. On a rental or second property, it gets paid from proceeds before you see a dime.

City Liens From Code Violations

When a city mows your yard, boards up a vacant house, or demolishes a structure, it bills you. Unpaid, that bill becomes a lien on the property. Code enforcement fines can do the same. These show up a lot on vacant and inherited houses. They get paid at closing like everything else.

The rules vary city by city. We’ve broken them down for Houston, Dallas, and Austin. If the city has gone as far as condemning the house, see our guide on selling a condemned house in Texas.

How to Find Every Lien on Your Property Before You Sell

Don’t wait for the title company to surprise you. You can find most of this yourself in an afternoon.

1. Search the county clerk’s records. Most Texas county clerks have online real property search. Look up your name and your property. Abstracts of judgment, mechanics liens, IRS notices, child support liens, and HOA liens all get recorded here.
2. Pull every tax account. Check your county tax assessor-collector’s site. If you’re in a MUD or a city that bills separately, check those too.
3. Call your HOA management company. Ask for a full account statement, including fees they’ll charge at closing.
4. Get your mortgage and HELOC payoffs. Your lender will give you a payoff quote. Don’t use the balance on your statement. Payoffs include interest and fees.
5. Order a preliminary title report. A title company can run a search before you’re under contract. Some cash buyers order this as part of the offer.

Add it all up. Compare it to what the house will actually sell for in its current condition. That number tells you what you walk away with, and whether you have a problem at all.

When Liens Add Up to More Than the House Is Worth

This is the one situation that actually blocks a sale. If the mortgage plus every lien is more than any buyer will pay, the title company can’t pay everyone, and it won’t close.

It’s fixable, but it takes time. Judgment creditors, contractors, and even some lenders will accept less than the full balance when the alternative is getting nothing. A homestead affidavit can take judgment liens off the table entirely. A short payoff with the mortgage lender is possible but slow. The earlier you know the numbers, the more options you have.

If a lien is part of a bigger financial squeeze and a foreclosure date is already set, read our guides on selling before a foreclosure auction in Dallas and Houston. Time is the thing you can’t get back.