Q & A – Will a lien on your property hurt your credit score?
Some Questions & Answers
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Q1
Will a lien on your property hurt your credit score?
A1
Anything that is a matter of public record, which a lien will be if/when recorded, will affect one’s credit record if credit bureaus discover it when checking records in the county where recorded. Although it might take days, even months after the lien is recorded for it to appear in a credit report, it is almost certain to eventually appear.
How much it affects one’s credit record in general and score in particular will depend on both the type of lien involved and the other items on which the score is based. Liens can be filed by mistake or, for a mechanic’s lien, because of a dispute with a non-performing contractor. Although the risk score will be affected in accordance with the algorithm by which the particular risk score is calculated, the degree to which a lien affects a particular person in any given transaction will depend on the type of lien, why the lien occurred, the purpose of the credit report, and whether the person/business being asked to grant credit is able and willing to consider those specifics.
Liens can often be removed by showing the liening party that a mistake has been made. For example, a state income tax lien can likely be removed by showing the taxing authority that one was not a resident of the state, was not employed within the state, and performed no self-employment activity within the state during the tax year for which the tax lien was filed. As another example, a mechanic’s lien can be removed by showing that the lien was improper due to insufficient notice or filing against the wrong party. Paying off a valid lien should also be taken into account by the risk score provider and/or the potential grantor of credit.
Further discussion cannot be provided without knowing specific facts, including the type of lien involved.
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Q2
I’m confused by the eviction process in the state of New York. Based on the forms provided for NY state there is no 3 day notice. Please clarify if that notice is required. Thank you
A2
For some states there is not a form titled “X-Day Notice” (with X being the number days required for the tenant to pay the rent, cure other types of defaults, or surrender the premises to the landlord). For those states a generic form must be filled in so as to work for any notice to “do something or leave.” This is sometimes because a state has different notice period requirements for different types of terminations due to lease defaults.
Landlordonline.com provides three different such forms for the State of New York. They are:
1) Notice of Termination of Residential Lease
2) Notice of Breach with no Right to Cure Residential
3) Notice of Breach with Right to Cure Residential
If you take a look at all three forms you will see that 1 and 2 do not give the tenant a right to remain even if he/she cures the default, whereas, 3 allows the tenant to remain in occupancy if the default is cured. It is my understanding that the only defined 3-day notice for NY State is that for a “Pay or Quit” notice and that the notice period for other lease defaults depends on clauses in the lease, except for regulated units for which it is 10 days. It is also my understanding that the City of NY allows ”unconditional quit” notices (1 & 2) only for the case of a holdover month-to-month tenancy.
If you are in need of a “pay or quit” notice, you would need to adapt notice 3 by adding the necessary words, including the amount that needs to be paid, as that is the only one which allows the tenant to remain after curing the default – in this case, paying the rent owed. An alternative would be to obtain a dedicated “pay or quit” notice form from some other source.
If you want to provide more detailed information about the matter, I may be able to provide additional help. However, I am not an attorney, I do not have personal knowledge about specific NY state laws other than what I find in my reference books, and I cannot give legal advice. Accordingly, I advise you to further check landlord-tenant law NY State (and of any local jurisdiction that might have more strict regulations) or seek the advice of a competent NY landlord-tenant law attorney.
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Q3
Can a landlord ask for a pet deposit in addition to a 1-1/2 month security deposit?
A3
The answer may depend on the state in which the rental is located, although some states do not cover this issue by statute, leaving it up to judges to decide if the matter goes to court. Some states consider a pet deposit to be part of the security deposit, with the total maximum being the maximum security deposit under state law. Other states do not have any limits on pet deposit or pet rent. Let me know the state and I’ll see if I can provide information.
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