What is a release of lien?

A release of lien is significant as it officially indicates the elimination of a claim against a property that was previously secured by a lien. When a loan or other obligation secured by the lien has been satisfied, the lender or lienholder issues this document to acknowledge that the debt has been paid, and thus, removes their legal right to claim the property in the event of a default. This process is essential in real estate transactions because it clears the title of the property, making it easier for the owner to sell, refinance, or otherwise use the property without the encumbrance of the prior lien. The release of lien serves to protect the property owner’s interests and ensures that the public record accurately reflects their ownership of the property free from that particular debt.