A final judgment issued in a civil action, or a restitution order entered under 13 VSA Section 7043, shall constitute a lien on real property owned by a judgment debtor if a copy of the judgment, certified by the court clerk, which contains the date it became final is filed in the land records.
A judgment lien shall be effective for eight years from the date the judgment became final, except that a petition for foreclosure filed during the eight-year period, if filed in the land records, shall extend the period until the termination of the foreclosure suit.
A judgment which is renewed pursuant to 12 VSA Section 506 shall constitute a lien for eight years from the issuance of the renewed or revived judgment, and if the renewed or revived judgment is recorded, 12 VSA 2903(b), it shall relate back to the date on which the original lien was first recorded.
A judgment lien shall be discharged in the same manner as a mortgage pursuant to 27 VSA Chapter 5.
Comment 1. For judgment liens see Title 12, Chapter 113.
Comment 2. Validity: Where judgment creditor failed to comply with requirement of the section that recorded copy of judgment order contain date judgment became final, certified by court clerk, no valid lien was created. Purcell v. FDIC, 141 BR 480 (Bankr. D. Vt. 1992), aff’d 150 B.R. 111 (D.Vt. 1993).
NB: Notwithstanding the foregoing, several decisions issued subsequent to Purcell caution that a Vermont court may not rule so narrowly and that a judgment lien which does not strictly comply with the statute may, nevertheless, constitute actual, constructive and/or inquiry notice that a lien has been asserted.
Comment 3. Writ of Attachment: When a judgment has become final by expiration of the time for appeal by dismissal of an appeal, or on certificate of decision from the Supreme Court, or by the expiration of any applicable stay of execution or the issuance of an order for immediate execution, an attachment shall continue for 60 days if the judgment is for the plaintiff but shall be dissolved forthwith if the judgment is for the defendant. VRCP 62(e).
Comment 4. Foreclosure: If not satisfied within 30 days of recording, a judgment lien may be foreclosed and redeemed as provided in 12 VSA 2903(d) and VRCP 80.1.
Comment 5. Domestication of foreign judgment order: The local law of the forum determines the methods by which a judgment of another state is enforced. Vermont law governs all procedural issues in actions to enforce foreign judgments in Vermont courts… When a cause of action is brought in Vermont, Vermont law determines the accrual date and the limitations period. A cause of action accrued in a foreign jurisdiction cannot be maintained after the time limit imposed by the Vermont statute for the same kind of action has expired. Conversely, an action timely brought in Vermont can be maintained here even if time-barred in the jurisdiction where the action arose. The only exception to this rule occurs when a foreign statute creates a new right of action and prescribes a specific limitation period. Since the right to enforce the judgment is not a creature of a foreign statute, but rather a common law action, we cannot import a foreign statute to determine its accrual date. Under Vermont law, “[a] judgment creditor generally has a right to bring an action upon a judgment at any time after its rendition, until it is barred by the statute of limitation.” An action on a foreign judgment not commenced within eight years is prima facie barred by the statute. Marine Midland Bank v. Bicknell, 176 Vt. 389 (2004); see also Restatement (2d) Conflict of Laws § 99 (1971)
Comment 6. Divorce Decree with financial obligations: Vermont court holdings vary on the question whether a recorded divorce decree creates an encumbrance pursuant to 15 VSA §754. In Cramer v. Billado, 2017 VT 38, the filing of a final divorce decree issued pursuant to 15 V.S.A. § 754 is a judgment lien. In Sumner v. Sumner, 176 Vt. 452 (2004) the final decree providing that one party owes a financial obligation to another did not automatically create an encumbrance on title, since an encumbrance is created only in accordance with the terms of the judgment. Additionally, the filing of a final divorce decree may not create a security interest under 12 V.S.A. § 2901. Absent specific language creating an equitable lien, a divorce decree that orders the payment of money at some future time may not be sufficiently conclusive to support a general lien.
Comment 7. IRS: For liens involving Federal General Tax liens, Federal Special Estate Tax, Federal Special Gift Tax see Standards 23.1, 24.1 and 25.1, respectively.
Comment 8. After acquired title: Judgment liens recorded against a person who does not own an interest in real estate at the time of the recording of such lien will attach by operation of law to any interest acquired subsequent to the recording of the lien for the effective term of the lien. The title examiner must search outside the traditional chain of title to find these liens. The recommended period of search for these liens is back twenty years plus 30 days from the date of the search. The title examiner must check for liens filed against each person who had title to the property being searched back for the full twenty-year period. The title examiner should also check the name of the client, if the client is acquiring the property being examined. As to judgment liens; See Powell, Law of Real Property§38.05(5). Reference is made to IRS Publication 785 regarding the priority of purchase money mortgages over a previously filed IRS Lien.
Comment 9. Bankruptcy: Judgment liens recorded in the land records do not become unenforceable merely because a debtor listed the debt on a bankruptcy petition and obtained a discharge in bankruptcy. The liens remain effective unless the Bankruptcy Court issues an order expressly stating that the property may be sold “Free and Clear” of liens.
Comment 10. Federal judgment liens: A judgment in a civil action creates a 20 year lien on all real property of a judgment debtor upon the filing of a certified copy of the abstract of the judgment in the land records. If approved by the court, the lien may be renewed for one additional period of 20 years upon filing a notice of renewal before the expiration of the 20-year lien period. Any renewal relates back to the date that judgment was filed. 28 U.S. Code Sect. 3201
Comment 11. Hospital Liens: A hospital lien, unless reduced to judgment, is not an encumbrance on real property. Town clerks are required to provide a book to be called the hospital lien docket which indexes the name of the injured person and the hospital. A hospital in Vermont which furnishes medical or other service, to a patient injured by reason of an accident not covered by the workers’ compensation act, shall have a lien upon any recovery for damages to be received by the patient, or by his heirs or personal representatives in the case of his death, whether by judgment or by settlement or compromise after date of the services. This lien shall not attach to one-third of said recovery or $500.00 whichever shall be the lesser and in addition said lien shall be subordinate to an attorney’s lien. 18 VSA § 2251 The lien shall not be effective, however, unless a written notice containing the name and address of the injured person, the date of the accident, the name and location of the hospital, and the name of the person alleged to be liable is filed in the office of the clerk of the town in which the hospital is located, before the payment of any moneys to the injured person, his attorneys or legal representatives as compensation for the injuries; nor unless the hospital also mails, postage prepaid, a copy of the notice with a statement of the date of filing thereof to the injured person, and to the person alleged to be liable before payment to the injured person, his attorneys or legal representative of compensation for the injuries. The hospital shall mail a copy of the notice to any insurance carrier which has insured the person against liability for the accident.
Comment 12. Child Support Order: A judgment issued for support arrearages in excess of one-twelfth of the annualized amount of support shall constitute an arrearage judgment lien, if properly recorded in accordance with 12 VSA Section 2904. The judgment shall become a lien for the amount of support arrearages at the time the judgment is issued and any arrearages which accrue after that time and until the lien is released. The judgment shall not become a lien for any sum or sums prior to the date they severally became due and payable. 15 VSA Section791. The lien shall be effective for eight years from the date of judgment or eight years after termination of the obligation to pay support, whichever is later.
This state shall accord full faith and credit to arrearage liens that arise in another state if the other state accords reciprocity to this state’s arrearage liens. 15 VSA Section791(h).
Comment 13. Homeowner Association Liens: Vermont law is unsettled on the term of the priority of HOA liens in Common Interest Communities (27A VSA §3-116). See Wells Fargo Bank v. Schunk et al., Windham Unit, Civil Division, Docket No 193-4-10 Wmcv (April 28, 2011) and Chase Home Finance LLC v. McLean et al. Rutland Unit, Civil Division, Docket 424-6-10 Rdcv (July 22, 2011) holding that claim to priority of HOA lien is based on a six month period of delinquencies accruing immediately prior to initiation of foreclosure AND all unpaid assessments that continue to accrue during the pendency of the foreclosure. Cf. EverHome Mortgage Company v. Murphy et al., Bennington Unit, Civil Division, Docket No. 115-3-10 Bncv and VHFA v. Coffey et al. No. S0367-11 Cnc, slip op. (Vt. Super. Ct. August 11, 2001) holding that priority of HOA lien is only for the six month period prior to the filing of the complaint for foreclosure.
Comment 14. Except for a Federal Tax Lien (See Standard 23.1), a creditor cannot attach property owned jointly by a debtor and a non-debtor when they hold title as tenants by the entirety. RBS Citizens, N.A. v. Ouhrabka, 30 A.3d 1266, 190 Vt. 251, 2011 VT 86 (2011). However, upon termination of a tenancy by the entirety, by death or dissolution of the marriage, the attachment or judgment lien may spring onto the interest of the spouse subject to the encumbrance. See Standard 2.2, Comment 5.
Comment 15. Enrollment in the Current Use program creates a notice of a contingent lien encumbering the enrolled land for the land use change tax. 32 VSA §3757.
Comment 16. Section 6 of An Act Relating to Emergency Judicial Response to COVID-19 provided for a temporary suspension of statutes of limitation. Specifically, effective 4/28/2020, all statutes of limitation or statutes of repose that would otherwise have expired during the STATE OF EMERGENCY were tolled until 8/14/2021, a date 60 days after the Governor terminated the state of emergency (6/15/2021).
History
September 20, 2012: This standard was added.
September 18, 2014: Corrected the citation in the last sentence of the standard from 12 VSA Chapter 5 to 27 VSA Chapter 5.
September 9, 2016: Comment 8 was revised to add “plus 30 days” in the 3rd sentence and to add the last sentence.; Comment 13 was added.
September 2018: Comment 14 was added.
September 2020: Comment 8 and Comment 14 revised.
September 2022: Revised Standard; Comment 6 revised; Comment 15 added; Comment 16 added.