Equitable lien

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Equitable lien - is one of the elements of law which is connect with a branch of properties. Aside from this definition we can distinguish a few concepts like common-law liens, statutory liens, and maritime liens[1]. Equitable lien derives from a written contract which indicates a notion of to charge a property with debt or is pledged by Court of Equity which is beyond a mainly contemplating of right which has been used like relations between a parties of this contracts and circumstances of them doings. Equitable lien is based on a written contract and it cannot be assorted to the universal area of equitable lien[2].

The differences between Equitable lien and Legal lien

There are a few basic differences[3]:

  • The first different - an equitable lien is different among other legal liens. This denotation is often confusing and to explain this definition pass that is it a right which derives from nature and it inheres each of the people against the property which belongs to another person to keep safe an obligation. Moreover, a legal lien and an equitable lien may be a reason an operation implementing an equitable lien to real life may be stopped by the statute of limitations.
  • The second different - the state of possession is crucial elements of legal lien, on the other hand an equitable lien may exist regardless of possession.
  • The third different - an equitable lien may be created on the grounds of written contract and it ensures creditors the rights in the term of equitable lien. What's more, an equitable lien was recognized by courts as upstand a new solution of actions which are connected with equity, in any situation where one of the sides of the contract will be undeservedly enriched.
  • The fourth different - an equitable lien may arise from nature as a relationship between parties of contracts, as a result, the transaction. E.g. Wife may be write in equitable lien against the property of her husband for payments about his property.
  • The fifth different - an equitable lien may arise from compromise where it is obvious that the parties of the contract going to provide this right. The agreement may be in two forms: written and oral.

The right to an equitable lien be owed to every people or corporation. This right may be gauged against item or property and in each country, it is regulated by the law. This is a significant part of the transactions between people. The main objective is to fulfill all claims. Secondly, this right is often used to enforce on the other people repair a damaged item or pay out a recompensation for inflicted infringement.

Examples of Equitable lien

Equitable liens are a form of security interest that can be used to secure the payment of a debt or performance of a duty. These liens are created in equity, rather than at law, and are not necessarily enforceable by a court.

  • Foreclosure: In the case of foreclosure, the equitable lien is created when a lender loans money to a borrower and secures the loan with the borrower's real property. If the borrower fails to make payments on the loan, the lender can foreclose on the property and take possession.
  • Construction Lien: A construction lien is an equitable lien that is created when a contractor provides labor or materials to a project but is not paid for their work. The lien applies to the property that was improved as a result of the contractor's work and can be used to secure payment for the contractor's services.
  • Possessory Lien: A possessory lien is an equitable lien that is created when a person holds goods belonging to another person and has not been paid for their services in regard to those goods. In this case, the lien applies to the goods that are being held and can be used to secure payment for the services provided.
  • Tax Lien: A tax lien is an equitable lien that is created when a taxpayer fails to pay taxes owed to the government. The lien applies to the taxpayer's assets and can be used to secure payment of the taxes owed.
  • Charging Lien: A charging lien is an equitable lien that is created when a lawyer provides legal services to a client and has not been paid for their work. The lien applies to any money that the client may receive from a settlement or judgment related to the case and can be used to secure payment for the lawyer's services.

Advantages of Equitable lien

Equitable lien is a legal remedy which allows a creditor to take possession of and retain a debtor’s property until the debt is paid. The following are the advantages of equitable lien:

  • An equitable lien is a powerful tool for creditors to secure their debt. It allows them to take possession of the debtor’s property and holds it in trust until the debt is paid, giving the creditor legal protection.
  • It is also beneficial to the debtor, as it provides them with an incentive to pay the debt. The threat of losing their property can be a strong motivator to pay the debt.
  • The lien also provides the creditor with an advantage in the event of a bankruptcy, as the lien allows them to receive their portion of the proceeds from the sale of the debtor’s property before other creditors.
  • Lastly, an equitable lien can be used to secure other types of debts, such as alimony or child support payments. This can provide the creditor with a reliable source of income and the assurance that their debt will be paid.

Limitations of Equitable lien

Equitable lien is a legal concept that allows a person to have a security interest in another person's property. However, there are some limitations associated with equitable lien. These limitations include:

  • Equitable lien does not give the person a right to possession of the property, but only a right to receive payment for a debt or claim.
  • Equitable lien cannot be enforced against a third party who is not a party to the legal proceedings.
  • The lien is not transferable from one person to another and can only be used by the party to whom it was granted.
  • Equitable lien does not allow for the attachment of any interest or rights in the property that would not be available under the law.
  • In some cases, equitable lien cannot be enforced until the court has issued a judgment in the matter.
  • Equitable lien is not recognized in all jurisdictions, so parties should always check their local laws before proceeding.

Other approaches related to Equitable lien

The other approaches related to an equitable lien are as follows:

  • A lis pendens is a notice to the public that a dispute over a property is taking place. It is filed in the public records and serves to protect the party’s interests in the property until the dispute is resolved.
  • A constructive trust is a court-imposed trust, imposed in order to prevent unjust enrichment of one party at the expense of another. It is used to compel a defendant to restore property to the plaintiff.
  • A security interest is an interest in personal property that secures payment or performance of an obligation. It is used to secure repayment of a loan or other obligation.
  • A statutory lien is a lien that is created by a statute rather than a contract. It is used to secure payment for services rendered or for the payment of taxes.

In summary, an equitable lien is one of several approaches that can be used to secure payment or protect the interests of one party in a property dispute. Other approaches include a lis pendens, a constructive trust, a security interest, and a statutory lien.

Equitable lienrecommended articles
Clear titleSpendthrift clauseCertificate of satisfactionBankers lienLien theoryAssignment of claimsAbsolute titleStatutory lienVitiating factor



  1. Jones A L.(2005), p.17
  2. Jones A L.(2005), p.17
  3. Osborne D.(2014), p.116,117

Author: Tomasz Kuś