Owning property is part of the American dream for many people, but it is not without complications. One issue that can affect your property title is unrecorded liens. These liens can complicate even the simplest of property transfers, especially if you don’t even know they are a thing to worry about.
What Are Unrecorded Liens?
An unrecorded lien is a debt that is placed against a property title without being shown on the public record. This means that a cursory search of public records (by a potential buyer, for instance) won’t show this type of debt against the property. Several common situations can result in unrecorded liens. One is charges from a city or municipality for services, such as boarding up abandoned property or sidewalk repair. Another case involves fees from code violations, special assessments, or inspections, some of which can accrue daily. Delinquent utility bills are yet another example of unrecorded liens, often going unnoticed until a new owner tries to turn utilities back on. All of these examples are things that become your burden as the new owners if they weren’t known before the sale, and you don’t have owner’s title insurance.
When Should Liens Come Up?
Ideally, unrecorded liens should come up before a property is sold. A title examiner is responsible for bringing up any unrecorded liens they become aware of in the process. These liens have to be shown so they can be terminated or made an exception to the title. Examples of these situations include a seller who mentions an unrecorded debt against the property during closing. Another example is if a survey shows something on the property, like a dirt road, that could result in debt against the property.
How Can You Avoid This Complication?
Unfortunately, unrecorded liens are not documented in a single place, so they can be hard to find. Make sure that you have a title search conducted that includes a municipality lien search and an HOA Estoppel letter if the property has an HOA. Ensuring that a professional is doing a thorough search is the only way to protect against these unexpected complications.
A Title Company You Can Trust: Colony Title
At Colony Title, we will help you through the process of getting your property’s title and help you avoid the pitfalls of hidden costs while you buy your home. We are also well trained in identifying any and all errors in public records and helping you resolve them. We specialize in real estate title insurance in both Maryland and Washington, D.C., and we will perform an expert title search, check through all past documentation, and examine records for any fraud or forgery. For more information on how we can get you into the home of your dreams, contact us online or give us a call at (410) 884-1160. To get more updates on housing markets and how to get into your home, follow us on Facebook, Twitter, and LinkedIn.