What Is a Judgment Lien?
A judgment lien is a way to encumber a debtor’s property, granting the creditor a legal right to collect what they are owed if the property is sold or refinanced.
Florida law allows a judgment creditor to obtain a lien of all the debtor’s personal property located in Florida by filing a judgment lien certificate with the Florida Secretary of State. Judgment liens encumber the debtor’s non-exempt property for five years.
The judgment lien encumbers subsequent sales or other conveyance of your personal property, such as a car, boat, or a collectible. The lien also attaches to your interest in a business, such as a corporation or a limited liability company. If you were to sell something to an unrelated purchaser, the purchaser or transferee would receive the property or business interest subject to your judgment lien.
This is why many sales transactions require you to sign an affidavit that there are no liens encumbering the property being sold.
How Long Do Judgment Liens Last?
In Florida, a judgment lien on personal property filed is good for five years. This is different than a judgment lien on real estate, which is valid for ten years.
Judgment liens on personal property can be extended one time for an additional five years.
How Do Judgment Liens Work?
Recording a certified copy of the judgment in any county creates a judgment lien on the debtor’s real property located in the same county, other than homestead property. The recorded lien will prevent the debtor from making an insured transfer of real property title to a mortgagee or buyer.
A properly filed judgment lien also encumbers personal property. In the past, the judgment lien affected only tangible personal property such as equipment, furniture, and other physical assets.
A new Florida statute effective July 2023 extended the scope of the judgment lien to tangible personal property, including, for example, rents, payment for goods sold, and payments due by contract or settlement agreement.
Judgment liens can also attach to a debtor’s vehicles and boats. The judgment debtor may apply to a court to require the Florida Department of Motor Vehicles to place notice of the judgment lien on the vehicle’s electronic title. The judgment lien would be subordinate to purchase liens.
The judgment lien impairs the debtor’s subsequent sales or conveyance of the debtor’s personal property. The purchaser or transferee takes possession of the property subject to the judgment lien. Judgment liens, however, are subordinate to prior perfected security liens filed to secure the debtor’s other payment obligations.
Here are the most important things to know about judgment liens in Florida:
- Duration: In Florida, a judgment lien on personal property lasts for 5 years, and a judgment lien on real estate lasts for 10 years. Both types of liens can be renewed.
- Attachment: It can attach to both real and personal property of the debtor.
- Filing Requirement: For personal property, the creditor must file the judgment with the Florida Department of State to create a lien on personal property.
- Homestead Exemption: Florida’s homestead exemption may protect a debtor’s primary residence from a judgment lien.
- Priority: The priority of judgment liens in Florida is generally determined by the order of filing.
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