Tax lien
A legal claim against a property for unpaid taxes; property tax liens usually rank ahead of mortgages and can be sold to investors.
Definition
A tax lien is a legal claim against a property for unpaid taxes. Property tax liens attach by law and, in most states, rank ahead of mortgages and other liens. In Florida, for example, property taxes are a first lien superior to all other liens under section 197.122 of the Florida Statutes.
In tax lien certificate states, the county sells the lien to investors at auction, often by bidding down the interest rate or bidding a premium. The investor pays the taxes, earns interest if the owner redeems, and can eventually apply for a tax deed or foreclose if the owner does not. Federal and state income tax liens are different: the IRS or a state revenue department records them against a taxpayer's property after an unpaid tax assessment. Both kinds show up in county records, and both have to be paid or released before a clean sale. Rules vary by state; confirm with a local real estate attorney.
Source: leg.state.fl.us
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