What Is an Equitable Lien?
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To persuade a judge in a court of law to place an equitable
lien on the defendant’s property, the plaintiff often has to
prove that there was wrongdoing that resulted in harm. For
example, if the defendant embezzles money from the
plaintiff to buy property, then the plaintiff can seek an
equitable lien in that property. The plaintiff also may have
the choice of an alternative remedy to a lien called the
constructive trust. When a court imposes a constructive
trust, it gives complete title of the property to a plaintiff
because it was obtained by fraud or in bad faith. It’s often
a better remedy for the plaintiff, especially if the property
will increase in value.

Buyers of real estate with an equitable lien are subject to it
if they were given notice or had prior knowledge of it. If the
recipient of real estate that has an equitable lien gives no
compensation or value for the property, then the buyer is
also subject to the lien. A bona fide purchaser is often not
subject to the lien under any circumstances. To qualify as
a bona fide purchaser, the buyer has to show that he or she
purchased the property for value and was unaware of the
facts related to the lien and had no reason to be aware of
them. Plaintiffs who obtain an equitable lien should put the
public on notice by recording it with the local agency in
charge of keeping public records.