Vermont Lien: A Complete Guide to Liens in the State

A lien is a legitimate right on a property to make sure a debt is paid. Once a lien is recorded, it gives creditors the right to enforce payment and stops the property owner from selling, refinancing, or transferring the property until the debt is cleared. Since lien laws are different in every state, it is important to know how they work in Vermont.

What Is a Lien in Vermont?

In Vermont, a lien lets a creditor legally claim a debtor’s property until the debt is paid. They cover real estate, vehicles, and business assets. Filing makes them publicly visible. Buyers and lenders see this debt as a warning.

When a property is reported, owners cannot sell or refinance easily, so it is advised that buyers research a property for debt before purchasing. Liens protect creditors' repayment rights.

Types of Liens in Vermont

The most common liens filed in Vermont include the following:

1. Property liens in Vermont occur when a property owner fails to pay their property levy. This means the town files a legal claim on the property that allows them to collect the unpaid levy. This claim stays attached to the property until the debt is paid off. The levy can also prevent the owner from selling or refinancing the property. If the owner still does not pay, the town may sell the property at auction or start a foreclosure process to recover the money owed, including any extra charges, after informing the owner.
2. Mechanic’s or construction liens. These are claims that protect contractors, subcontractors, and suppliers who provide labor or materials to improve a property. If this obligation is not fulfilled, they can file a lien on the assets to secure their payment. This lien makes it hard for the property owner to sell or refinance the property until the debt is paid.
3. In Vermont, a judgment lien is a legal claim placed on a person’s real property after a court issues a final judgment against them in a civil case. Once the judgment is recorded with the town clerk where the property is located, it creates a lien that secures the creditor’s right to collect the money owed by attaching to the debtor’s property.
4. Mortgage liens in Vermont are legal claims placed on a property to secure a loan. When an individual borrows money to purchase or refinance a house, the lender records a mortgage lien on the property. This lien gives the lender the right to take the property if the borrower does not repay the loan as agreed. A lien is the lender’s way of making sure they get paid back by using the property as security for the loan. It remains in place until the mortgage is fully paid and formally discharged.
5. IRS or Vermont Department of Taxes liens in Vermont are legal claims placed on a person’s property when they fail to pay their federal or state taxes. These liens give the IRS or Vermont tax authorities the right to secure the unpaid tax debt by placing a claim on all property and rights to property owned by the taxpayer. This applies to both real and personal property

How to Search for Liens in Vermont

Lien records in Vermont are public and can be accessed through:

• Town Clerk’s Offices: Vermont does not use a county system for keeping property records. Instead, each town or city clerk is responsible for keeping and managing all lien and property records for their area.
• Online Town Databases: Some towns in Vermont, like Burlington and Montpelier, let you search property and lien records online.
• Vermont Judiciary Public Portal: Judgment liens in Vermont can be searched through the state’s online court case system. This system allows the public to look up court cases and find information about judgments and liens filed against property.
• Title Companies and Third-Party Services: Commonly used in real estate transactions to perform thorough lien searches.

Lien Records in Major Vermont Cities

Because Vermont’s lien system is town-based, searches must be performed with the town clerk where the property is located:

• Burlington (Chittenden County): The Burlington City Clerk/Treasurer’s Office manages property and lien records, with some online access available.
• South Burlington (Chittenden County): Records are also maintained by the South Burlington City Clerk.
• Rutland (Rutland County): Rutland City Clerk manages lien filings.
• Barre (Washington County): Barre Town and City Clerk’s Offices maintain lien and property records.
• Montpelier (Washington County): The Montpelier City Clerk provides property and lien record searches.

How Long Does a Lien Stay on Property in Vermont?

Lien validity in Vermont varies depending on the lien type:

• Property Tax Liens: Until the taxes are paid or the property is sold at a tax sale. After the tax sale, the property owner usually has one year to pay back the owed amount plus interest
• Mechanic’s Liens: In Vermont, this lien must be enforced within 180 days (about 6 months) after the date payment for the last work or materials is due. If not enforced within this time, the lien expires and can no longer be used to claim payment.
• Judgment Liens: This lien lasts for eight years from the date the judgment becomes final, and there is interest on the unpaid amount that usually accrues at 12% per year.
• Mortgage Liens: This stays in place until the loan is fully paid off and officially cleared from the property records. The mortgage is considered satisfied only when the lender records a discharge or release, showing the debt is paid.
• Tax Liens (IRS/State): These taxes last for 6 years, while state tax liens in Vermont follow the rules set by Vermont’s tax collection laws. These state liens remain until the tax debt is paid

How to Remove a Lien in Vermont

Removing a lien in Vermont requires addressing the underlying obligation or disputing the lien’s validity. Common methods include:

1. Paying the Debt in Full: After the debt is paid, the lienholder must file a release with the town clerk.
2. Negotiating a Settlement: Creditors may agree to partial payment and then file a lien release.
3. Court Petition: Property owners can ask the court to remove liens that are false, invalid, or filed incorrectly.
4. Recording a Release or Satisfaction: Property owners should verify that the lienholder files a release after payment to clear the title.

Liens are a key tool to protect creditors and make sure property owners meet their financial obligations. It is important for buyers, sellers, and lenders to know the different types of liens, how to check for them, how long they last, and how to remove them.

Since Vermont records liens at the town level and has specific deadlines, it is helpful to work with a town clerk, title company, or lawyer to make sure liens are handled correctly. Following the right process keeps property titles clear and helps make buying and selling property smoother.