When purchasing real estate in Florida, one of the most important steps in the process is the title search. A thorough search will reveal if there are any problems in the chain of ownership, including unsatisfied liens attached to the property. As the new owner of a property, you inherit all the liens that property may have, so you can imagine how important it is to confirm a “clear title” before closing on a property.
So, what exactly is a lien? It is a legal claim on assets that allows the holder to obtain access to the property if debts are not paid. Liens need to be cleared before a new title insurance policy can be granted. There are several common liens that can attach to real estate in Florida:
Mortgages: a mortgage lien gives the lender the right to seize and sell your home if you default on the mortgage payments. A mortgage company will typically not release its lien until it receives payment in full for the loan.
Unpaid Property Taxes: if property taxes are not paid for real estate, the county can place a real estate tax lien against the property. Like other title liens, property taxes follow the property, not the owner, so a new buyer is liable for the tax debt if the seller has unpaid property taxes.
Homeowners’ Association Dues: an HOA can place a lien on a property for unpaid dues. The lien will remain on the property until the debt is paid, and a new owner will become responsible for the lien if it is not paid at closing.
IRS Tax Lien: if a homeowner does not pay his or her personal income taxes, the IRS can file a tax lien against the property. The owner cannot transfer title to the property until the lien is paid in full or the IRS releases the property from the tax lien.
Personal Judgment Lien: if a property owner is sued for personal debt and obtains a judgment against him or her, the lien attaches to any real estate they own. The title cannot be transferred until the lien is satisfied.
Mechanic’s Lien: contractors can place a lien on a property for unpaid services or labor that were provided in good faith. Mechanic’s liens must be recorded within 90 days of the last day work was performed on the property. After providing notice of the lien, the contractor may foreclose on it if the property owner refuses to pay the debt owed to the contractor.
It is crucial to conduct a title search when purchasing real estate to determine if there are any liens on the property. A real estate attorney can lead the process to remove any property liens so you can receive clear title to the property. Feel free to contact us for any title issues or questions.
When choosing The Law Office of Donna Hearne-Gousse, P.A. for your title, escrow, and closing needs, you’ll enjoy all the benefits of an attorney-based title agency with similar and in many cases lower rates than what a standard title company will charge.
The Law Office of Donna Hearne-Gousse