Tax liens are legally allowed in cases where individuals have fallen behind on tax payments. The tax lien is imposed upon property so that the debtor will pay those taxes, even if the property is sold. In some cases, the tax lien requires that the price of the lien be included in the sales price of the property and in others, the owner cannot sell the property unless the lien is paid first.
Tax liens can be imposed when an individual or entity has failed to pay property taxes or income taxes. Those that purchase a piece of property, at foreclosure for instance, are now responsible for tax liens against the previous owner.
Although the tax lien should be disclosed at the time or purchase, that is not always the case. The county searcher should discover any tax liens during their search, which then becomes the responsibility of the title company if the lien was not discovered or disclosed.
Tax liens can be paid in a variety of ways. The property may be seized and sold in order to pay any delinquent taxes. The tax lien may also be paid from an escrow account, which would likely be through the bank that holds the mortgage on the property. In fact, a tax lien takes priority over mortgages and they should be paid before the bank collects monies for mortgage payments.