Commercial Liens

Commercial liens are business contracts between private individuals wherein an item owner bestows a hold on her item to a creditor which she borrows money or services from. Commercial liens are voluntary and consensual, which means that both parties agreed on all the conditions written in their lien contract. Some types of commercial liens are mortgages, car loans, and mechanic liens.

Mortgages are liens wherein the item owner promises the title of her property to the lender in exchange of a loan. Derived from French words which mean "dead" and "promise," mortgages are a type of lien that dies when the promises of the property owner to her creditor are either completely fulfilled or miserably unfulfilled. If the promises are realized, then the owner has the claim to all the legal rights of the property. If they are not, then the lien can be brought to foreclosure.

Car loans are liens that work similar to mortgages. A bank, the lender, can give loan to a borrower to purchase a new car. Unlike mortgages however, the car owner only has a short period to fulfill her obligations to the bank. This period depends on the model of the car and the expected diminishing value that it carries as time goes. The bank also has the ability to seize the car if the owner fails to return the loan.

A mechanic's lien is a type of commercial lien that gives security interest in an owner's property to the people who have catered services or supplied materials in construction or renovation of the property. A mechanic lien is known for a lot of names, which includes construction lien, renovation lien, material man's lien, supplier's lien, laborer's lien, designer's lien, and the like, the modifying terms of which are all self-explanatory.