Creating a Powerful Business

Are you planning to buy a residential or commercial property? If so, you need to request certain services or do them on your own. Many potential buyers assume that when a property goes up for sale on the market, it means that it is available "free and clear." However, they might get disappointed in the long run if they do not do their own due diligence and get a lien search performed.

You can perform your own lien search. However, keep in mind that there are different types of liens that can be placed on a property. This means that you need to know what you are looking for. If you set your efforts on determining if there are property tax liens, you may miss other liens that are just as important. The following points identify a few types of property liens that can interfere with a smooth real estate transaction.

Judgment Liens

If a property seller loses a court case and has a judgment entered against them, the creditor can place a lien on their property. The amount owed to the creditor must be paid before the title of the property can be signed over to a new owner. These types of liens are usually related to the non-payment of an account. The creditor can go as far as seeking to foreclose on a property to recoup their losses.

Property Tax Liens

Owning real estate requires owners to pay property taxes. In some jurisdictions, property owners may not see harsh ramifications. This is why they may continue to not pay their taxes. The city or county of residence can place a lien on the property until the taxes are paid. So, even though the officials may not take action and seize properties for resale, they can place a lien on the property until the taxes are paid.

Municipal Liens

These are liens that are assessed when property owners owe their municipality. It may be for unpaid utilities. If the city has to perform certain work, they can bill property owners. Unpaid bills can result in municipal liens. There are various municipal services that can fall into this category of liens such as garbage collection, graffiti removal, and cutting down or trimming dangerous trees.

Lien search companies can be used as a resource to determine if properties of interest have liens. They can help you determine what you can do to legally own properties of interest. Do not expect sellers of properties to know if they have existing liens. Many will likely be shocked or may have assumed that the lien notice they received is a thing of the past and resolved.

Consider investing in title insurance to protect your interests. You should also obtain a comprehensive municipal lien search that includes all liens assessed by a municipality, creditor, or contractor. The record will have pertinent information that can protect you and help you decide if purchasing a property is worth it.