Real Estate Property Records Reveal Liens... Now What?
You have done you research. You were interested in buying property and so have looked up its real estate property records at the Register of Deeds office. And not you have found out that the property has liens on it. But do you really know what that means?
Real Estate Property Records - Liens 101
What is a lien? A lien is a form of security interest that a property owner (lienee) grants to someone to whom he owes debt (lienor). For example, say John bought a house and took a bank loan to finance it. However, John has hit some tough times and has not been paying his monthly bank dues. The bank then becomes a lienor and as such, now has a right to claim interest in John's house. So if you are interested in buying John's home, you may actually not be allowed to buy it because the bank will may allow the sale. A worse scenario is if you did buy John's home and he was not forthcoming regarding the lien. In this instance, you may end up giving money for nothing.Liens usually fall under one of two basic categories: consensual and non-consensual. Consensual liens include car loans, mortgages, property interests (where the owner uses his property as collateral), chattel mortgages (which covers personal property such as money, jewelry, etc.), and mechanics liens (which is a time of security interest offered those who have given time, money, or labor for the improvement of the said property).
If consensual liens indicate that the property owner gave assent to the security interest, non-consensual lines are those that are typically enforced by law. A common example of this is tax liens. You don't really sign anything approving this lien but it is mandated by the government as a way to ensure that you pay your taxes. Other examples of non-consensual liens include attorney liens (applied by lawyers to cover incurred fees), judgment liens and maritime liens.
As you can see, there are many different types of liens on your potential new property. So what do you do if you find that the property you want has a lien on it? The easiest thing to do is just walk away of course. However, if your interest in the property is more business-related (e.g., the location is just perfect for your new business) or that you are convinced THIS property is THE place for your perfect home, then walking away may be a bit hard to do.
In this case, talk to the owner immediately and find out what's really going on. Maybe there was just a misunderstanding and all is not what they appear to be. Also, don't forget that a lien is almost always the result of the owner owing somebody money so an arrangement - maybe, your deposit goes to the lienor perhaps? - may be easy to set up.
In short, don't give up! If your real estate property records search shows a lien (or liens) on the property you like, it is not the death of all negotiations. On the other hand, it can even be beneficial for you. Good luck!
Next Article: Recorder of Deeds - The Place to Go for Your Deed Record Searches