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Can I put a Friendly Lien on my commercial property in Texas to protect from lawsuits?

Can I put a Friendly Lien on my commercial property in Texas to protect from lawsuits?

Q: What is the most common lien on personal property?

The most common lien on personal property is a security interest created by a loan agreement. This type of lien allows a lender to claim the personal property if the borrower defaults on the loan. For example, when you finance a vehicle, the lender typically holds a lien on the car until the loan is fully paid.

Q: What is the most common lien on property?

The most common lien on property is a mortgage lien. This type of lien is created when a property owner borrows money to purchase real estate, using the property as collateral. If the borrower fails to repay the loan, the lender can foreclose on the property to recover the owed amount.

Q: What is the most common type of lien on property?

The most common type of lien on property is a mortgage lien. This lien secures a loan used to buy real estate, giving the lender a claim to the property until the loan is repaid. Other common types include tax liens, which arise from unpaid property taxes, and mechanic's liens, which are filed by contractors for unpaid work.

Full question:

I am concerned about frivolous law suits since I own commercial property with lots of equity. I was told I could file a friendly lien so when they check for assets, the will find I have none since I have liens on the property. What are the steps to follow so the lein is legal?

Category: Real Property
Subcategory: Liens
Date: 04/07/2025
State: Texas

Answer:

A friendly lien is a term for a procedure involving creating a loan in a promissory note and/or mortgage document that uses property as collateral for the loan, with the owner of the property or allied party being the lender. If recorded prior to other claims, it has priority over the later claims and stands ahead in line to be paid.

Case law has found the conveyance of a “friendly lien” to be a fraudulent conveyance of an
interest in property for no consideration. The object of the fraudulent lien is to defraud
creditors when there is no true loan, involving repayment to another for money loaned.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Which of the following is a common example of agreements that create liens against property?

Common agreements that create liens against property include mortgages, which secure a loan with real estate, and security agreements, which can attach to personal property. Other examples are mechanic's liens, which arise from unpaid work on a property, and judgment liens, which result from court judgments against a debtor. These agreements establish the lender's claim to the property until the debt is satisfied.

What is the most common lien on personal property?

How do you protect personal assets from a business lawsuit?

To protect personal assets from business lawsuits, consider forming a limited liability company (LLC) or corporation. These structures separate personal and business liabilities. Additionally, maintaining proper business insurance and keeping personal and business finances distinct can further shield personal assets from claims against the business.

How to put a friendly lien on property?

To put a friendly lien on property, you need to create a formal loan agreement where you or an allied party acts as the lender. This agreement should outline the loan terms and be properly documented. After that, file the lien with the appropriate local government office to ensure it is recorded. However, be cautious, as friendly liens can be scrutinized for fraud if not executed with genuine intent.