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Equitable Liens

A lien is essentially a charge or claim on property. It is most often placed on real estate, but it can apply to other assets/interests, such as personal property, bank accounts, and even lawsuits themselves. Generally, there are strict requirements in place to properly assert a lien. The mechanic lien statute, for instance, sets for meticulous requirements to properly assert a mechanic’s lien. 

In certain situations, the law does not allow a lien to be asserted, even though it would be fair to do so to compensate someone. Thus, sometimes a Court’s equitable powers permits a lien to be placed on property on which an obligation is owed and where the law does not provide an adequate remedy and justice would suffer without relief. Estate of Ripley v. Mortgage One Corp., 16 S.W.3d 593, 596 (Mo. Ct. App. 1999). Usually there must be an express agreement, or conduct or dealings of the parties from which an intention may be implied, that some specific property be appropriated as security for a debt or obligation before equity will consider that a lien should be declared on the property. Wilkinson v. Tarwater, 393 S.W.2d 538, 542 (Mo. 1965). 

Broken into elements, the requirements for an equitable lien are: (1) a duty or an obligation owing by one person to another, (2) property to which that obligation “attaches,” which can be described with reasonable certainty, and (3) an intent, express or implied, that the property serve as security for the payment of the debt or obligation. Estate of Ripley, 16 S.W.3d at 596.  

Contact with questions pertaining to liens or equitable liens.