When our firm performs a title search on real property, many owners are surprised when we discover various liens or other clouds on the title to their property other than their mortgage.
The liens can include:
- Municipal Lien: A lien filed by a local government entity (city, town, county, etc.) for violations of various regulations involving real property. This could include the non-payment of property taxes, cost for work that the local government performed to bring the property up to code (such as cleaning up or demolishing the property) or other matters regulated by the local government.
- Judgment Lien: A lien filed by a party related to a judgment or award it received in court. This is most seen with creditors such as credit card companies.
- Mechanics Lien: A lien filed by a person or company who has supplied labor and/or materials to improve real property. The lien would be for any unpaid amount owed on the labor and materials.
- Tax Lien: A lien filed by the federal or state government (IRS or Department of Revenue) related to unpaid taxes such as income tax, sales tax, business tax, etc.
Each of the liens discussed above would attach to real property and would normally be required to be removed before the property can be transferred or sold. There are different rules applicable to each related to when/how they are renewed, whether they could give the creditor the right to take possession of the real property, etc.
In addition to the above, there are other clouds on title (while not technically liens) that could still impact your ability to sell or transfer real property.
- Court Order: A court can issue an order after a lawsuit has been filed that imposes certain terms against a piece of real property. For example, an order may provide that money is owed to certain parties related to a piece of real property. Another example is that a restraining order could be filed in a divorce prohibiting the sale of shared assets such as real property. An order that is recorded in the property records can affect the sale or transfer of real property.
- Lien Lis Pendens: If a piece of real property may be involved in a lawsuit, one party can file a Lien Lis Pendens (meaning “suit pending”) to put the world on notice of the dispute and that the real property in question may be implicated.
Contact Us
One of the benefits of requesting Wooden Title & Escrow, LLC in your sales contract to provide closing services is that when any of the above issues arise from a title search, we have Real Estate Attorneys on hand to address any legal issues that arise to ensure that your closing occurs on time and without incident. If you have a specific legal matter, please contact Wooden Title & Escrow, LLC at (423) 756-9972.