What does it mean to perfect a lien?

With the exception to property tax liens, liens are generally honored in the chronological order they’re placed on property. However, only when a lien is “perfected” will it be legally entitled to priority over subsequent liens. A lien is not perfected until it is properly recorded with the appropriate government agency.

In regards to real estate, the lien should be recorded via a deed of trust or mortgage instrument at the county recorder’s office in the county where the property is located. Titled vehicles should have the lien recorded on the title at a Department of Motor Vehicles in the state where the vehicle is registered. Personal property liens are recorded by filing a UCC-1 form with the Secretary of State’s office in the state where the property is located.

In addition to perfecting a lien, a security agreement or promissory note should accompany the recorded document.