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Does lien against rental income in Oklahoma make sense? Lien would cover personal loan to make house rentable.

My brother is fixing up a house in Oklahoma. He plans to rent it when it’s fixed up. He needs money to fix up the house. He wants me to loan him the money, but frankly I cannot rely on him to pay me back. Does it make sense for me to file a lien in this kind of situation? Can the lien specify that the tenant will pay rent to me until the loan is paid off? Thanks in advance for any advice or direction you can provide.

1 reply

Jun 24, 2020

Mechanics lien claims are only available to those who provide labor or materials to the project. So, lending funds generally won't give rise to lien rights. What's more, when the lien is voluntarily being entered into between the parties, mechanics liens are almost never the right solution. As for other types of liens - you should be able to establish a voluntary lien on the property, like an informal construction loan, to secure your ability to recover payment. Through that document, you should also be able to assign rents, or a portion of the rents, toward paying down that loan. However, that's outside of my expertise and I wouldn't be comfortable providing information on how to go about doing that. For help drawing up the necessary documentation, it'd be wise to consult an Oklahoma construction or real estate attorney. They'll be able to discuss what you're looking to do, then advise on how to achieve that goal. Then, they'll be able to draw up the necessary paperwork.

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