Clouds on a Title

Before you close you need to be sure that there are no clouds on your title. It is at closing that you will be handed the title from the previous owner, one that has no liens and that is marketable and one that has no clouds. If your title did have a lien it would mean that money was owning, money that some could try to hold you responsible for.
In fact those who are owed money could foreclose on your new property if the debt is not paid off. If you are going to pay this amount you can do it at closing.

There is more than one kind of lien that could cloud your title and keep it from being marketable. A construction lien, which can also be called a mechanic's lien is a debt that is still owed to the contractors that build the house. This same type of lien can be on the title from suppliers if they have not been paid.
In fact, a lien could even be placed upon the owner's property if the contractor fails to pay the subcontractors for any of their work.

How a lien is handled will differ from state to state. In many states the person or company that is going to file the lien must notify the owner while in other states this is not at all necessary. As an owner you will need to talk to all of the subcontractors and suppliers yourself in order to get them all to sign a release of lien form.
Only then should you even consider paying the contractor for their work. This is the best way that you can protect yourself from any liability.

There are other common types of liens like divorce liens. These liens come up in situations where a couple gets divorced and one of the pair continues to live in the house for a while. When they do get around to selling the house they might try to keep all of the money for themselves.
If this occurs then the other party can put a lien on the property in order to try to get their share of the money from the sale. Another lien that is somewhat related to this one is a child support lien. If one parent is not paying the support that they should a lien could be placed on the property, which will keep it from being sold before the debt has been paid in full.

You will also find liens on condos that are associated with the homeowners association. IF the owner had not paid his or her dues there could be a lien. TO find out if there is on the condo you wish to purchase you will have to make sure that your escrow agent gets a certificate of payment from the association itself.

If you find a cloud on your title and you do not know what to do about it then you need to contact your lawyer. He or she will be able to help you determine if it is your responsibility or not as well as help you to clear the cloud once and for all.
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Martin Lukac