Cameron Miranda
A common-law lien is a right to retain possession of another's property, where that possession already lawfully exists, pending the discharge of indebtedness. In other words, it is a security interest in property that is not a statutory lien or a judicial lien obtained by legal or equitable process. A common-law lien only gives the right to retain the property, not the right to sell it to recover funds. However, some statutes have conferred an additional power of sale, and it is possible to do so by contract. Common-law liens are divided into special liens and general liens, with the former being more common and requiring a close connection between the property and the service rendered.
| Characteristics | Values |
|---|---|
| Etymology | From Anglo-French "lien" or "loyen" ("bond" or "restraint") and Latin "ligamen" ("to bind") |
| Definition | A lien is a right to retain possession of another's property pending the discharge of indebtedness |
| Types | Common-law liens are divided into special liens and general liens |
| Special Lien | Requires a close connection between the property and the service rendered |
| General Lien | Affects all of the property of the lienee in the possession of the lienor and stands as security for all debts of the lienee to the lienor |
| Equitable Lien | A nonpossessory security right conferred by operation of law, similar in effect to an equitable charge |
| Maritime Lien | A lien on a vessel given to secure the claim of a creditor who provided maritime services or suffered an injury from the vessel's use |
| Statutory Lien | Created by statute, rather than by contract or common law |
| Accountant's Lien | The right of an accountant to retain a client's papers until the accountant's fees have been paid |
| Common Law Lien | A lien against personal or real property that is not a statutory lien, a security interest created by agreement, or a judicial lien obtained by legal or equitable process or proceedings |
| Transferability | A lien cannot be transferred or asserted by a third party |
| Power to Sell | A lien does not confer the right to sell the property to recover funds, but some statutes have conferred this power of sale |
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What You'll Learn
- Common-law liens are divided into special and general liens
- A common law lien depends on the lawful possession of the property by the lienor
- A lien differs from a pledge as the property is delivered to the creditor
- A statutory lien is created by statute, not by contract
- A maritime lien is a lien on a vessel to secure a creditor's claim
Common-law liens are divided into special and general liens
A lien is a claim or legal right to a person's or company's physical property or other assets, often created when assets are voluntarily put up to secure a loan. Liens can also be established involuntarily through a legal judgment by a court or by tax authorities looking to collect what they are owed. Unless the debtor is able to satisfy the debt, they face the risk of losing their property.
Common-law liens are divided into special liens and general liens. A special lien, the more common type, requires a close connection between the property and the service rendered. It can only be exercised regarding fees relating to the instant transaction; the lienor cannot use the property held as security for past debts. A general lien, on the other hand, affects all of the lienee's property in the possession of the lienor and stands as security for all of the debts of the lienee to the lienor. A special lien can be extended to a general lien by contract, which is commonly done in the case of carriers.
It is important to note that a common-law lien only gives a passive right to retain the property; there is no power of sale that arises at common law. However, some statutes have conferred an additional power of sale, and it is possible to separately confer a power of sale by contract. Common-law liens are closely aligned with the concept of "common callings" but are not co-extensive with them.
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![A treatise on the law of liens, common law, statutory, equitable, and maritime / by Leonard A. Jones Volume v. 2 1888 [Leather Bound]](https://m.media-amazon.com/images/I/81HiC2Oig0L._AC_UY218_.jpg)
![A treatise on the law of liens, common law, statutory, equitable, and maritime / by Leonard A. Jones Volume v. 1 1888 [Leather Bound]](https://m.media-amazon.com/images/I/61kelb6mFML._AC_UY218_.jpg)
A common law lien depends on the lawful possession of the property by the lienor
A common law lien is a lien against personal or real property that is distinct from a statutory lien, a security interest created by agreement, or a judicial lien obtained by legal or equitable process or proceedings. A common law lien confers the right to retain the property but not the right to sell it to recover funds.
A common law lien is dependent on the lawful possession of the property by the lienor. This means that the lienor must have lawfully acquired the property in the first place. If the lienor does not have lawful possession of the property, they cannot claim a common law lien. For example, an innkeeper may claim a common law lien on the belongings of a tenant in arrears. In this case, the innkeeper has lawful possession of the tenant's belongings and can retain them until the tenant settles their debt.
The concept of a common law lien is closely related to the idea of a "passive right to retain." This means that the lienor has the right to keep the property until the debt or obligation is discharged but does not have the power to sell the property. This is in contrast to other forms of security interests, such as mortgages or charges, where the holder of the interest may sell the property to satisfy the debt.
It is important to note that a common law lien is different from an equitable lien. While a common law lien requires lawful possession of the property, an equitable lien does not. An equitable lien is a nonpossessory security right that arises by operation of law, often in unique and complex situations.
Common-law liens can be further divided into special liens and general liens. A special lien requires a close connection between the property and the service rendered, and it can only be exercised for fees related to the specific transaction. On the other hand, a general lien affects all of the lienee's property in the possession of the lienor and serves as security for all debts owed by the lienee to the lienor.
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A lien differs from a pledge as the property is delivered to the creditor
A lien is a right to retain possession of another's property, where that possession already lawfully exists, pending the discharge of indebtedness. A lien differs from a pledge as the property is delivered to the creditor not for the purpose of security for a debt but in relation to the carrying out of a service. For example, a garage may retain possession of a car until a repair bill is paid, or a solicitor may retain papers pending the settlement of fees.
In the United States, the term lien generally refers to a wide range of encumbrances and would include other forms of mortgages or charges. In other common-law countries, the term lien refers to a very specific type of security interest—a passive right to retain (but not sell) property until the debt or other obligation is discharged. In contrast, in the US, when possession of the property is lost, the lien is released.
Common-law liens are divided into special liens and general liens. A special lien, the more common type, requires a close connection between the property and the service rendered. A general lien affects all of the lienee's property in the possession of the lienor and stands as security for all of the debts of the lienee to the lienor.
A lien generally entitles the creditor to retain possession of the property, but not to sell it. Certain liens, however, do give the holder of the lien these rights. An example of this is a statutory lien, which is created by statute rather than by contract or common law. A lien over books, papers, or other documents of the insolvent is unenforceable to the extent that it would stop an official receiver, liquidator, or trustee from having access to them.
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A statutory lien is created by statute, not by contract
A lien is a right to retain possession of another's property, where that possession already lawfully exists, pending the discharge of indebtedness. A lien is not a right to sell the property to recover funds. A common-law lien only gives a passive right to retain.
A statutory lien is a lien created by statute, not by contract. It is a claim upon the property, both secret and invisible, often given priority by statute over other forms of registered security interest. A statutory lien can be created by statute or by common law. For example, the Civil Aviation Act 1982 in the UK permits an airport to detain aircraft for unpaid airport charges and aviation fuel. This right has been treated as a lien under UK insolvency law, but it has been argued that such statutory rights are not liens but rights analogous to liens.
A lien can also be created by the performance of a service. For example, a garage may retain possession of a car until a repair bill is paid, or a solicitor may retain papers pending the settlement of fees. A lien differs from a pledge as the property is delivered to the creditor in relation to the carrying out of a service, not for the purpose of security for a debt.
Common-law liens are divided into special liens and general liens. A special lien requires a close connection between the property and the service rendered. A general lien affects all of the property of the lienee in the possession of the lienor and stands as security for all of the debts of the lienee to the lienor. A special lien can be extended to a general lien by contract, which is commonly done in the case of carriers.
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A maritime lien is a lien on a vessel to secure a creditor's claim
A lien is a right to retain another person's property if they owe you an obligation. In common-law countries, a lien is a passive right to retain (but not sell) property until a debt or obligation is discharged.
A maritime lien is a specific aspect of admiralty law. It is a privileged claim upon a vessel to secure a creditor's claim for services rendered to it or injuries caused by it. It is a proprietary instrument, meaning it concerns the property (the res). This includes the vessel and its appurtenances, equipment, services, and injuries caused by the property. A maritime lien is unique because the vessel itself owes obligations that may be breached, and the law of maritime liens is a mix of federal statutes and case law.
A maritime lien is distinct from a land-law-type lien as it does not depend on either notice or possession. Maritime liens are generally thought of as silent liens, and possession of the subject property is not a requirement for the existence of such a lien. Another difference is that maritime liens may only be enforced under the maritime jurisdiction of a federal court, at which point the marine equipment can be "arrested" and brought under the control of the federal court.
In the United States, a federal tax lien is a non-maritime lien that is subordinate to every lien for supplies, fuel, repairs, etc., which are all maritime liens. In the UK, there is a closed list of situations where a maritime lien arises, including salvage, seamen's wages, damage done by a ship due to a wrongful act of manoeuvre, and masters' remunerations and disbursements.
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Frequently asked questions
A common law lien is a lien that is not a statutory lien, a security interest created by agreement, or a judicial lien obtained by legal or equitable process or proceedings.
A lien is a right to retain possession of another's property, where that possession already lawfully exists, pending the discharge of indebtedness.
Common-law liens are divided into special liens and general liens. A special lien requires a close connection between the property and the service rendered, while a general lien affects all of the property of the lienee in the possession of the lienor.
An example of a common law lien is an innkeeper claiming a lien on the belongings of a tenant in arrears.
