Common Title Liens That Could Sneak Up On You

Dec 1, 2021

If you want to close the sale, you must have a clean title.

It’s not as easy as it might seem.

A clean title means there are no standing claims against the property and that the owner has the full legal right to sell the property. Our job as your title company is to do the digging to ensure that the title is clean and ready for a smooth transfer of ownership.

But often, it’s not smooth at all.

We often find hidden claims against the property that must be resolved for the sale to go through. Some are easily resolved. Others … well … others can be a challenge.

Here’s a brief rundown of some of the claims that we see most often:

Mechanic’s Liens

A mechanic’s lien is typically placed on the property prior to a contractor doing work to improve the property. It covers the cost of materials, equipment, and labor associated with the project. When the job is completed and paid for, it’s the contractor’s responsibility to release the lien. If that doesn’t happen for any reason, it becomes an issue to be resolved prior to settlement.

Bankruptcy Liens

A bankruptcy filing connected to someone holding title to a property is another common problem we see. When the bankruptcy situation is resolved, the lien must also be addressed. From time to time, that doesn’t happen and it takes some effort from the title company to clear the title.

Child or Spousal Support Liens

When a lien is filed for delinquent child support or spousal support, it can be still be connected to the title, waiting to be discovered, even generations later.

Delinquent Tax Liens, Fraud & Forgery

Similarly, liens related to unpaid or late tax returns can hold up the process if left unresolved. Fraud and forgery are also common in the event that one person on the title signs the name of another person on the title, typically a spouse.

This is just the beginning of a long list of issues that can throw a wrench into your sale. It’s why our team works hard to examine the title on each property that comes across our desks, all part of the work we do to bring your deal to the closing table.