Montana Lien: A Complete Guide to Liens in the State

A lien is a legal claim filed in court by a creditor against property to secure repayment of a debt or a debtor’s obligation. The lien allows the creditors to enforce their rights and restricts the debtor from selling, transferring, or refinancing their property until the lien is satisfied.

What Is a Lien in Montana?

In Montana, a charge imposed by a creditor on a debtor’s property until repayment is made is called a lien. Liens may be general or specific in nature. In a general lien, the lienholder (creditor) may choose which of the debtor’s property to seize or sell to recover their funds. However, when a creditor enforces a specific lien, the creditor may only seize the property that is linked to the debt. Generally, liens apply to a debtor’s real property (including homes, land, and commercial buildings) or personal property (such as vehicles, business equipment, or other assets).

Once the liens are recorded with the county recorder, they become part of the public record, notifying buyers, lenders, and title companies of any outstanding obligations. For debtors, the presence of liens may delay refinancing or block the sales of their property until the debts are cleared. For buyers, lien searches are essential before closing on a property, so they do not incur obligations on the property.

Types of Liens in Montana

An overview of the types and characteristics of liens available in Montana includes:

1. Tax Liens - These are filed by county treasurers when individuals do not pay their property taxes. The Internal Revenue Service (IRS) may file a tax lien against the real or personal property of an individual, trust, business, or estate for unpaid federal income taxes. This tax lien is known as a federal tax lien.
2. Mechanics or Construction Liens - They are filed by licensed contractors who are not paid for their labor or materials on a property. Montana law requires the lien to be enforced within 90 days of the last day of work.
3. Judgment Liens - These occur when a creditor wins a court judgment and records it against the debtor’s real estate. Judgment liens may be attached to property once recorded in the appropriate county.
4. Mortgage Liens - these are liens placed by lenders on a property that serves as collateral or security for a mortgage. They remain until the loan is paid off and released.

In Montana, other types of liens include Hotel Liens, Loggers' Liens, Threshers' Liens, Miscellaneous Liens, Farm Laborers' Liens, Oil and Gas Owners' Lien, and Liens of Certain Health Care Providers.

How to Search for Liens in Montana

Per the Montana Public Records Act, lien records are public and may be accessed by interested parties in several ways, including:

• County Clerk and Recorder’s Offices: The county clerk and recorder’s offices in every county maintain lien and property filings. Individuals must provide information such as the property owner’s name, address, or parcel number to view the records.
• Online County Databases: Some counties, including Yellowstone, Gallatin, and Missoula, offer online portals that enable the public to search for property and lien documents.
• Montana Courts Public Access Portals: The Montana Judicial Branch offers a statewide portal that supports online access to court records, including judgment liens throughout the state.
• Title Companies and Third-Party Services: Several third-party firms exist that provide full lien searches and title reports to the public. They are often used during property transactions, and records from these firms are unofficial.

Lien Records in Major Montana Cities

An individual may find the lienholder’s name, amount owed, recording date, and property description in a lien record. To obtain a copy of a lien document in a city, individuals must visit the county where the property is located. Major counties in Montana include:

• Billings (Yellowstone County): The Yellowstone County Clerk and Recorder provides lien and property record searches, with online access to the public.
• Missoula (Missoula County): Missoula County Recorder maintains lien filings in the county and makes them accessible to the public.
• Great Falls (Cascade County): Cascade County Clerk and Recorder manages lien and deed filings for every city in the county.
• Bozeman (Gallatin County): Lien records are handled by the Gallatin County Clerk and Recorder, with online services available to the public.
• Helena (Lewis and Clark County): Lewis and Clark County Clerk and Recorder maintains property and lien records.

How Long Does a Lien Stay on Property in Montana?

A lien may remain on a property for a period of time, depending on the lien type. It is outlined below:

• Property Tax Liens: These tax liens remain in effect until they are redeemed or the lienholder forecloses after the redemption period of 3 years.
• Mechanic’s Liens: They must be enforced through a lawsuit by the building contractors within 2 years of filing, or they may expire.
• Judgment Lien: This is usually valid for 10 years, with a possibility of renewal by a creditor in court.
• Mortgage Liens: They continue to stick to the property until the mortgage is fully repaid and the lien is released.
• Tax Liens (Federal/State): Federal liens last 10 years, while state liens follow Montana’s statutory collection limits.

How to Remove a Lien in Montana

Individuals may get a lien release in Montana once they satisfy some obligation or conditions. Some common approaches in the state include:

• Paying the Debt: The easiest way for an individual to remove a lien on their property is to pay all their debts. Then, the lienholder must issue a release, which must be recorded with the county clerk and recorder.
• Negotiating a Settlement: Creditors may allow their debtors to pay their debts installmentally.
• Court Petition: Property owners are permitted to challenge any fraudulent, invalid, or improperly filed lien in court.
• Recording a Release or Satisfaction: After completing the payment of the debts, individuals should obtain a release document from the lienholders. The release document must be filed with the county recorder's office or the Clerk of the District Court.

Liens in Montana are important to creditors as they help them recover their funds from their debtors. They ensure creditors are protected while requiring the debtors to meet their financial obligations. Individuals must understand the types of liens in Montana, how to search for them, their duration, and the process for removing them from their property. The office of the county clerk and recorder, a title company, or an attorney offers more information on the subject matter.

By resolving liens correctly, debtors (property owners) may maintain clear property titles and smooth real estate transactions.