What is a Lien in Alaska?
A lien in Alaska is a legal claim or document filed against collateral assets or properties. Typically, the assets are designated to satisfy debts, and as a result, when a creditor or claimant files a lien against them, they become subject to the claim. Hence, if the underlying contractual obligation is not fulfilled or the debts are not paid, a creditor may seize the collateral assets legally. There are many types of liens, and they vary based on the attached obligation, creditor, or legal judgment. Regardless, every type of lien falls under either of the following primary classifications:
- General or specific liens
- Voluntary or involuntary liens
While voluntary and involuntary liens depend on the property owner's consent, general or specific liens depend on the claimed asset's specificity. A general lien is attached to all the borrower's assets, while a specific lien is attached to a particular asset.
In Alaska, claimants or creditors file a lien at the state recorder's office, which, in conjunction with Alaska courts, maintain and disseminate related filings and documents. Creditors must note that filing a lien claim is a public declaration that another entity has not fulfilled an obligation. Therefore, this process should be a last resort option. The creditor and debtor can seek other alternatives to ensure the fulfillment of a bargain before filing a lien claim.
Filing a lien in Alaska usually starts with a preliminary notice. This document is used to inform a property owner or borrower that the entity is subject to a lien if the contract is breached. Failure to present this notice before executing the agreed obligation can cause the claimant to lose the right to file a lien if the contract is breached. Eventually, if the agreement is not fulfilled, the claimant must file the lien with the appropriate authority to enforce it within the state's deadline.
Types of Lien in Alaska
Generally, creditors can place two types of liens against a debtor's property in Alaska:
- Voluntary or involuntary liens
- General or specific liens
A voluntary lien is attached with a property owner's consent. It is also known as a consensual lien. Most people become familiar with a voluntary lien when they need to secure a loan to buy real estate, a vehicle, or a home appliance. In several cases, a condition of the loan is that the buyer uses the purchased property as collateral. The buyer's agreement to that requirement creates the lien, which secures the creditor's investment if the party fails to repay the loan. One well-known example of a voluntary lien is a mortgage lien.
An involuntary (or nonconsensual) lien, on the other hand, is established by statute. Typically, this lien becomes effective when someone fails to fulfill a financial obligation required by law. For example, the payment of taxes, a judgment, child support, utilities, or construction workers. One characteristic of involuntary liens is that the property owner's permission is not needed to establish the lien. Examples of such liens include a tax lien, judgment lien, and mechanics lien.
Liens can also be general or specific. A general lien affects all property in a debtor's name. Meanwhile, a specific lien affects only a particular property. Because no one will readily give creditors access to all of their properties, a general lien is often an involuntary lien, and a specific lien is often a voluntary lien. Of course, a lien can also be specific and involuntary. One example is a mechanics lien.
What is a Property Lien in Alaska?
Alaska property liens gives a creditor or claimant the legal right to seize or sell a debtor's real property if a contract is not fulfilled. The lien grants its holder access to a piece of property if the property owner fails to make payment. A valid property lien must be filed and approved by the county records office in the county where the property is located. Additionally, the claim should contain the terms that apply to the creditor's rights and specific terms and actions that a property owner can take to repossess the property when the agreement is honored.
How Do You Know if a Property Has a Lien in Alaska?
The simplest way to know if a property has a lien in Alaska is to conduct a lien search. The search will identify the entity with legal ownership over the property and any claims or liens against the property. Interested parties can search for liens themselves or contract a third party (e.g., an attorney, title agent, or another preferred provider) for the service.
How Do I Check for Liens in Alaska?
The Alaska Department of Natural Resources (DNR) receives lien filings against real and personal property for Alaska. Hence, anyone who wants to check for liens against property in Alaska can query the DNR Recorder's Office.
To find liens filed against real property, an individual can search the DNR's statewide recording system online or visit any recorder's office.
The DNR recorder's offices are headquartered in Anchorage, Kenai, and Fairbanks to accommodate Alaska's 34 recording districts. The Anchorage recording office oversees 21 districts, the Fairbanks office oversees 12 districts, and Kenai oversees one district.
Members of the public can view or retrieve copies of lien records in paper, CD, file, or electronic formats at the recorder's offices. However, one's request must be made to the office in charge of the district where the property is located. An individual can locate the appropriate office using the DNR's Find Your District Office tool. Note that:
- There is a fee for copy requests;
- In-person requesters have the option of receiving the record at the office or having it mailed to them; and
- Requests can be made by phone call.
Alternatively, an interested party can fill and submit an Online Copy Request to receive the record of a real property lien by email. Documents of liens recorded from January 1, 1970, to the present date are available. For documents recorded before 1970, the party should call the DNR's Archives Unit in Anchorage at (907) 269-8884.
To check for liens filed against personal property in Alaska, one can search the DNR's UCC Central File online or request records in person at the Anchorage office. (See fee schedule for search and copy requests.)
Free Lien Search in Alaska
The Department of Natural Resources (DNR) does not usually charge requesters a fee to perform lien searches in Alaska, except it involves duplicating a document at a DNR recording office or requesting copies via the internet. For this reason, interested individuals can carry out free lien searches using the DNR's statewide recording system and Uniform Commercial Code (UCC) Central File online databases.
Between the two systems, there are various search criteria that someone can use to find liens placed on properties, including:
- Name Search
- Date Search
- Document Number Search
- Document Type Search
- Book and Page Search
Regardless of the search parameters used, the following information may be retrieved at no charge:
- The recording district
- Document number, year, and suffix
- The recording date and time
- Number of pages in the document
- Book and page numbers
- Type of document
- The document's index code (e.g., LI, which stands for Liens; TL, which stands for Tax Lien)
- The owed amount
- The grantee and grantor's names
- Document images (e.g., notice of liens, release of liens, claim of liens)
Note that mortgage documents and tax liens are not available to view and print online. In those cases, the requester must visit the relevant DNR recorder's office to examine records and pay for copies or order copies online for a small fee.
What is a Tax Lien in Alaska?
A tax lien in Alaska is a statutory lien created by law. It is the government's claim against an entity's property or assets upon a refusal to pay tax debts. The claim is put in place to protect the state government's interest. In most situations, tax liens are general, implying that they are usually set against all of the debtor's assets, including real estate, personal property, financial assets, bank accounts, current and future assets. As a result, defaulters may lose all of their properties if they fail to pay state taxes.
Debtors can void tax liens by either paying their tax debt in full or reaching a settlement with the tax authority.
What is a Mortgage Lien in Alaska?
Mortgages are secured loans that are used to buy or refinance homes. Thus, a mortgage lien is a financial claim on the bought or improved collateral property. As such, the property can be seized if the homeowner fails to pay back a loan.
What is a Mechanics Lien in Alaska?
A mechanics' lien guarantees payment to individuals or entities employed in Alaska's construction industry. For instance, it ensures that builders, contractors, and construction firms receive compensation or remuneration for their services. It secures their payment in the event of a project's liquidation. As such, owed individuals or companies can file liens against any property being constructed or repaired.
Entities that intend to file a mechanics' lien in Alaska must qualify according to the conditions outlined in Alaska Stat. § 34.35.050. These entities include:
- Companies or individuals that performed labor for the improvement of a property
- Architects and surveyors
- Union Trust and trustees
- Materialmen (that contracted with a subcontractor or higher official)
- Equipment suppliers
The deadline to record a mechanics' lien in Alaska is 120 days. State law requires claimants who constructed or repaired property to file a mechanics' lien within 120 days of the contract's completion or after they have finished offering their services.
An Alaska mechanics' lien must contain every information outlined in Alaska Stat § 34-35-070, including:
- Owner's name and address
- Claimant's name and address
- Hiring party's name & address
- The legal description of the real property (this information must be sufficient enough for identification).
- General description of the services rendered, including the labor, materials provided, construction or repair
- The original contract price of the labor, materials, services, or equipment
- Amount due to the claimant
- The date that the construction/ repair was complete.
Failure to include all the necessary information may invalidate the claim. Also, to assert the validity of a lien claim in Alaska, the claimant must take an oath.
The law mandates that the filed mechanics lien must be enforced within six months of filing. If for any reason, a claimant requires an extension, state law permits an extension of 6 months. This is only achievable on the condition that the claimant files an "extension notice" in the same recording office as the original lien within the initial 6-month period.
What is a UCC Lien?
The UCC (Uniform Commercial Code) governs commercial transactions in every state, including Alaska. When an entity loans money to another, the lender submits a UCC filing or lien to the Secretary of State in Alaska. This filing serves as an official notice to the general public that the lender claims an interest in borrowers' property as collateral for a debt. The UCC lien puts a claim on the collateral property until the debt is repaid or the obligation fulfilled.
The UCC (Uniform Commercial Code) lien is a specific lien. Thus, a lender can file a UCC lien against a particular piece of equipment or property. If the loan is satisfied, the borrower can ask the lender to notify the Secretary of State and file to terminate the lien.
In Alaska, the state recorder's office maintains the UCC Central File System, containing public records of security interests on personal property. Because liens are a matter of public record, they are accessible by contacting the recorder's office:
Uniform Commercial Code (UCC) Central File
550 West 7th Avenue, Suite 108A
Anchorage, Alaska 99501-3564
TelePhone: (907) 269-8873
Fax: (907) 269-8945
What is a Judgment Lien?
A judgment lien in Alaska is a court ruling that allows a creditor to rightfully take possession of a borrower's real or personal property upon a failure to fulfill a contractual obligation. With this claim, the creditor may be able to access the debtor's business, personal property, or real estate.
Typically, judgment liens in Alaska are non-consensual because they are attached to a debtor's property and assets without the entity's consent or agreement. This type of lien is a debt collection method initiated by a judge's ruling in a civil case. According to the state's collection laws, if the debtor refuses to pay voluntarily, the judgment creditor can enforce judgment liens by a writ of execution.
Voluntary Lien Vs. Involuntary Lien in Alaska?
The distinction between voluntary and involuntary liens in Alaska relates to the owner's consent. That is, a voluntary lien filed against a debtor's property is placed with the owner's consent. A common example is a mortgage lien. In contrast, an involuntary lien is placed on properties and assets regardless of the owner's consent. Examples of involuntary liens include judgment and mechanic liens.
How Creditors Collect Payment Through a Lien
When people acquire debts, creditors can attach liens to their properties. Since the existence of a lien can hinder the sale, transfer, or refinancing of a property - and even damage a person's credit - the owner will most likely be motivated to pay off a debt upon discovering the encumbrance. Liens also grant creditors the right to repossess or force the sale of a debtor's property if the latter fails to pay up.
Several liens can exist on one property simultaneously. Hence, if the property is sold against the debtor's agreement, creditors collect payment in the order that their liens were perfected or as given by law. Ordinarily,the government is the first party to be paid after a liened property's sale. If, for example, a mortgage lien, real estate tax lien, and judgment lien are attached to a parcel of land; the real estate tax lien will be paid first before others.
Notwithstanding, the sale of the debtor's property may not always be the best option for creditors. Sometimes, it may be impossible to sell the property because the sale proceeds will not be sufficient to satisfy the existing liens, especially if the property is a low-value item.
How Do I Get a Lien Removed in Alaska?
To remove a lien in Alaska, a property owner must either pay the creditor or dispute the lien in court. The owner can also opt to do nothing and allow the statute of limitations to expire.
Paying the creditor is by far the fastest method. Once the debt is settled, the creditor will file a release with the Department of Natural Resources Recorder's Office. This action effectively removes the lien from the owner's property.
However, if convinced that a lien is illegal, fraudulent, or inaccurate, the affected property owner can take the case to court; advisably, after sending a letter to the lienholder demanding the removal of the invalid lien. If the court deems the lien to be indeed unlawful, the lien will be cleared.
The third option - i.e., waiting for the statute of limitations to expire — is recommended only to persons willing to risk the creditor renewing the lien before it lapses and pursuing other legal recourse to collect payment. For example, forcing the sale of the lienee's property.
How Long Does a Lien Stay on Your Property in Alaska?
In Alaska, some liens expire, and others do not. The general principle is that if a lien is voluntary, it will likely stay on a person's property until the underlying debt or loan is repaid. Meanwhile, if the lien is involuntary (established by law), a statute of limitations will govern the enforceability of the lien. Case in point: a judgment lien lasts for ten years from the date of judgment, and a mechanics lien lasts six months from the filing date in Alaska. However, such liens can often be renewed before their expiration dates.
How to Avoid a Lien in Alaska
There is usually not much a person can do to avoid a lien in Alaska except pay their bills and taxes promptly, follow stipulated debt repayment plans, and avoid further debt. The result is that a creditor will have little or no reason to record a lien against their property.