Duhaime's Law Dictionary


Statutory Lien Definition:

A lien arising solely by force of a statute on specified circumstances or conditions.

Related Terms: Lien, Builders' Lien, Judicial Lien, Mechanic's Lien

"The term statutory lien," wrote Justice Alexander Palsky of the United States Bankruptcy Court, sitting in Fort Myers, Florida in Re Engler:

"... means lien arising solely by force of a statute on specified circumstances or conditions. Even a cursory reading of the definition leaves no doubt that a statutory lien must have its legal existence solely due to a specific statute and not as a result of a judicial proceeding. On the other hand, the term judicial lien means lien obtained by a judgment, levy, sequestration or other legal or equitable process or proceeding. It is clear in the present instance that the liens in question came into existence as a part and parcel of the process to collect on a judgment and, therefore, they do not owe their existence solely to a statute but to a judicial proceeding."

The classic example of a statutory lien is the builders' lien (aka mechanic's lien or construction lien).

In Re Tracey Schick, Justice Kugler of the United States District Court (New Jersey) discussed the distinction between a judicial lien and a statutory lien, defining both terms in the process:

"A judicial lien is defined as a lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding. By contrast, a statutory lien arises solely by force of a statute on specified circumstances or conditions.... [A] statutory lien is only one that arises automatically and is not based on an agreement to give a lien or on judicial action. [A] statutory lien must be a lien arising automatically by operation of a statute, not one requiring subsequent judicial action.

"[L]iens that arise by operation of law without judicial action are not judicial liens ... because they are not obtained through the judicial process. On the other hand, where liens do not arise automatically and solely by force of statute, but rather are obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding, such liens are deemed judicial liens. Thus, to decide whether a lien is statutory or judicial, a court must consider the nature of the lien, i.e., whether it arises automatically and by force of statute or whether it is based on an agreement to give a lien or on judicial action...."

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