Can I place a lien on my son’s home for money that I lent to him for a downpayment?

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Can I place a lien on my son’s home for money that I lent to him for a downpayment?

My husband and I lent our son $46,000 on 2 separate home purchases with a note of repayment. Can we place a lien on his current home so in the event of a sale we would get our money back? He and his wife may be separating and we need to protect ourselves.

Asked on January 27, 2011 under Real Estate Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

If you had not already loaned your son money, this would be easy...you would simply extend him a private mortgage secured by the home(s). However, if you have already loaned him the money, you cannot after the fact add a security interest unless you give him something for it--e.g. extend his time to repay, forgive some of the debt, lower interest rate (if any), loan him more money, etc. There needs to be some consideration, or something of value, he gets in exchange for giving up a security interest. Alternately, if he is in default under his obligations, you could sue him for payment, then seek a lien on the property to help ensure payment. However, if  he's currently not in default, you have no grounds for seeking a lien in that fashion, so you would need to extend him something new in exchange for a security interest.


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