§ 25-2191.Encumbrances; objection of owner to payment; procedure; notice.
Article 21: Special Proceedings and Actions · Not amended since original codification · Last verified July 22, 2026
In one sentenceThis section directs the court to hold or invest the sale proceeds tied to a disputed encumbrance whenever the owner objects to paying it, and requires prompt notice to the encumbrancer of that dispute unless the encumbrancer is already a party to the case.
Full Text of § 25-2191
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If the owner objects to the payment of such encumbrance, the money shall be
retained or invested by order of the court to await final action in relation to its disposition, and notice thereof shall be forthwith given to the encumbrancer, unless he has already been made a party.
Not every owner agrees that an encumbrance is valid or owed. Section 25-2191 covers what happens when the owner objects to paying it out of sale proceeds: rather than releasing the money to the encumbrancer, the court orders it retained or invested to await a final decision on how it should be distributed.
The section also protects the encumbrancer’s right to be heard. If the encumbrancer is not already a party to the partition action, the court must give the encumbrancer prompt notice of the owner’s objection, so the encumbrancer has the chance to press the claim rather than lose it by default.
Frequently Asked Questions
What happens to the sale proceeds when the owner disputes an encumbrance?
The court orders the money retained or invested pending final resolution, instead of paying it out immediately.
Does the encumbrancer automatically learn of the owner’s objection?
If the encumbrancer is not already a party to the case, the court must give prompt notice of the objection.
What does final action on the disputed proceeds mean here?
A later determination of who is entitled to the retained or invested money, reached through the proceedings the surrounding sections describe.
Can the money be invested rather than held as cash?
Yes. The court may order it retained or invested by its own order.
Does this section decide who ultimately wins the encumbrance dispute?
No. It addresses only what happens to the money while the dispute is pending; a separate section lets the court frame an issue between the owner and the encumbrancer to resolve the dispute itself.
Why does the encumbrancer need separate notice only sometimes?
The statute excuses notice when the encumbrancer is already a party to the proceedings, since that party already has notice of the case’s developments.
Source & verification. Section text and the amendment-history citation are
reproduced verbatim from the Nebraska Legislature, Revisor of Statutes, enacted by the
Nebraska Legislature. Last verified July 22, 2026. ·
Official source
Also known as:owner objects to encumbrance paymentdisputed encumbrance proceeds nebraskacourt retains money pending disputenotice to encumbrancer of objectionpartition sale proceeds held pending