Are Clouds on Title Stressing You Out? Part Two
Don’t be stressed! As we discussed in Part 1 of this series, clouds on title can cause closings to be postponed and sometimes cancelled. Terra Abstract can assist you in getting title issues cleared.
Part 2 – Other Liens
In addition to old mortgages, unsatisfied liens and judgments have the potential to be a costly surprise. Some common liens and judgments are mechanic (contractor) liens, property tax liens, municipal liens, income tax liens, child support liens, and judgment liens.
Mechanics’ liens can be filed by a contractor when work has been done on a property but the contractor has not been paid. The laws vary from state to state in terms of the specific process to be followed. Most mechanics’ liens will expire if not acted on in a timely fashion. Mechanics’ liens usually can be resolved, but the process is often time-consuming, particularly if the contractor has left the area, gone out of business, or cannot be found.
Property, Municipal, and IRS Tax Liens – If a homeowner’s property tax, sewer, water, or trash utility payments are delinquent, this can result in a lien against the property. Property tax liens are prioritized over other claims to the property, and when property taxes go unpaid for too long, the government may sell the property to pay off the tax balance. When a homeowner owes the IRS for delinquent personal taxes, whether or not the tax payer lives in the property, the IRS can attach a lien to any real estate owned by the tax payer. The IRS will only remove the lien when the back taxes are paid.
Child and Spousal Support Liens – A lien can be placed on a property when support is not paid. These types of liens can be difficult to clear for various reasons.
Judgment Liens – If there is a judgment against a property owner, the judgment could possibly attach to any real estate they own. An unpaid judgment could leave the new owner at risk of being responsible for paying off the judgment. Title examiners do their best to match judgments listed in county records with the name of the property seller. If it is determined that the judgment is in fact against the owner, it must be paid before the lien will be released.
No matter how small the issue, all title issues will need to be addressed in some way in order to offer a clear title to the buyer. At Terra Abstract, we understand the urgency buyers can face when it comes to going to closing on a property. Leave the worry to us! Contact us today to place your order for title insurance.