Types of Property Liens
| Type | Created By | For What | Release |
|---|---|---|---|
| Banker's Lien / MODT | Bank when giving home loan | Security for outstanding loan | Full loan repayment + bank NOC + CERSAI discharge |
| Property Tax Lien | Municipal authority | Unpaid property tax arrears | Clear all tax arrears + obtain clearance certificate |
| Judgment Lien | Court decree | Court-ordered payment or damages | Satisfy court decree + apply to court for lien removal |
| Income Tax Lien | Income Tax Department | Unpaid income tax dues | Pay outstanding tax demand + IT clearance |
| Mechanic's / Builder's Lien | Contractor or builder | Unpaid construction dues | Settle dues + obtain lien release from contractor |
How to Remove a Bank Lien on Property
Steps to Remove Bank Lien After Loan Repayment
- Repay full outstanding loan: Get foreclosure statement from bank — pay exact final amount including any charges
- Get NOC from bank: Bank issues No Objection Certificate confirming loan is fully repaid
- Collect original documents: Bank returns original title deed, sale deed, and other documents pledged as security
- CERSAI discharge: Bank should discharge the mortgage registration at CERSAI — verify at cersai.org.in after 30 days
- Verify EC updated: Get fresh EC after 3–6 months — confirm the mortgage is no longer showing as an encumbrance
- Keep all records: Preserve bank NOC, foreclosure letter, and original documents safely — needed for future sale
Related Terms
Frequently Asked Questions
A lien is a legal claim a creditor holds over a property as security for a debt. The most common is the bank's lien from a home loan — the bank holds rights over the property until the loan is fully repaid. Other liens include property tax liens (municipal authority for unpaid taxes) and court-ordered judgment liens. A property with an uncleared lien cannot be freely sold.
When you take a home loan, you create an equitable mortgage (MODT) — depositing your property title documents with the bank. The bank registers this mortgage with CERSAI (Central Registry). This creates a lien — the bank has a legal claim over the property. If you default, the bank can invoke SARFAESI Act to recover dues. On full repayment, the bank issues NOC and discharges the lien at CERSAI.
Not freely. A property with an active lien (typically a bank mortgage) cannot be sold without the lienholder's consent. In practice, the buyer's bank or the buyer pays off the outstanding loan to the lienholding bank, gets NOC, and then the sale proceeds. This is coordinated between the two banks for home loan-to-home loan transactions. Verify all liens in EC and CERSAI before buying any resale property.
After full repayment: (1) Get NOC + foreclosure letter from bank, (2) Collect original documents (title deed, sale deed), (3) Verify bank has discharged CERSAI registration — check at cersai.org.in after 30 days, (4) Get fresh EC after a few months to confirm mortgage no longer appears. Keep the NOC and original documents safely — they are essential for future sale or mortgage.
Check via: (1) Encumbrance Certificate (EC) — shows all registered encumbrances including mortgages, (2) CERSAI portal (cersai.org.in) — search by property details to find registered equitable mortgages, (3) Ask the seller to provide fresh EC + CERSAI search result. Always check both before buying any resale property — an undisclosed lien can create serious legal complications after purchase.