CORPORATE TRANSACTIONS & COMPLIANCE BLOG

New Hampshire Extends Statutory Period for Judgment Liens

By: Despina Shields, COGENCY GLOBAL INC. on Thu, Dec 29, 2016
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A new statutory period for judgment liens? That hardly ever happens! Well, it happens occasionally, and things are indeed changing in New Hampshire effective January 1, 2017 with New Hampshire House Bill 1175.  Prior to 2017, New Hampshire’s statutory period for judgment liens affecting real property was only six years. The new legislation changes it to 20 years. Most other states have a statutory period of ten years or more for judgment liens, so this change in statutory period better aligns New Hampshire with other states. This makes sense since a suit may be maintained on a judgment in New Hampshire for twenty years [1]. Up until now, there was a disconnect between the life of a judgment and a judgment lien.

Judgment vs. Judgment Lien:  There is a Difference

Before we discuss the changes this legislation brings to New Hampshire, let’s define a few terms.  Two terms, in particular, are very important, are often misused and can cause confusion for due diligence searchers.

  • The statutory period of a lien is the amount of time, determined by law, that a lien remains effective.
  • A judgment is a decision rendered by a court in a particular case.
  • A judgment lien is a claim or encumbrance on property, most often against the real property and the judgment debtor.

A judgment and a judgment lien are not the same. First, they are normally found in two different public offices/locations. A judgment is filed in a court.  A judgment lien is normally filed in the county where the affected real property is located. There are some instances in some jurisdictions where a lien is created automatically.  In most situations, however, the judgment creditor must take the step of filing the lien in the correct county where the real property is located in order for the judgment lien to attach. Therefore, searchers are well advised to search the court of general jurisdiction for pending suits and judgments, as well as those counties where the judgment debtor owns real property, for judgment liens. In New Hampshire, the court of general jurisdiction is the Superior Court and judgment liens are found at the county Registry of Deeds.

New Hampshire Judgment Lien Changes

A judgment entered by any court in this state may be secured against real estate by recording or re-recording, at any time during the duration of the judgment, a certified copy of the judgment with the Registry of Deeds of the county in which the real estate is located. This means that a judgment lien filed on or after the first of the year with the county registry of deeds in which the real estate is located will remain effective for as long as a suit may be maintained upon the judgment pursuant to RSA 508:5, which is normally twenty years. This is helpful to judgment plaintiffs that wish to secure a lien against the judgment debtor’s real property without concern that the judgment lien will lapse before the judgment is satisfied.

What does this change mean to due diligence searchers who are searching for judgment liens in New Hampshire?  First off, any judgment liens filed with the county registry of deeds BEFORE 1/1/17 will retain the six-year statutory period. Only judgment liens filed after 1/1/17 will remain effective and enforceable for the life of the judgment. However, a judgment lien with a six-year life could be renewed AFTER 1/1/17 to take full advantage of this legislation and extend the life of the judgment lien to remain enforceable and effective for the life of the judgment, which could be up to twenty years. 

Is This a Good Change?

So, is this legislative change a positive one?  In my opinion, this is clearly an improvement.  A six-year statutory period of lien is a very short time frame for a lien attached to real property.  And it created a gap between the enforceability of a judgment and the effectiveness of a judgment lien.  A longer period makes sense in order to collect on the judgment without having the burden of refiling or continuing the lien repeatedly.  This change also brings New Hampshire in line with most other states that have longer judgment lien life spans.

Final Reminder: Search for Judgments AND Judgment Liens

Remember, there is a difference between judgments and judgment liens.  They are not interchangeable terms.  Moreover, a pending suit may become a pending judgment lien.  Thus, it is wise to search for judgments as well as judgment liens when conducting due diligence searches.

[1] See RSA 508:5

 

This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: UCC, Article 9 Filing, Searching and Due Diligence