Can I put a Friendly Lien on my commercial property in Texas to protect from lawsuits?
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?
03/17/2009 |
Category: Real Property ยป Liens |
State: Texas |
#15656
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.
