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Can a contractor place a lien on a home that has been sold to a new owner if he was hired by the previous owner?

IndianaMechanics Lien

The roof was replaced through an insurance claim on a home we're buying. We are supposed to close on the home this week but it has been disclosed that the insurance hasn't fully paid for the roof yet and we know the seller is financially broke. The insurance check will be going to the seller. If the seller doesn't pay the contractor as agreed is it possible for the contractor to put a lien on the home after we've purchased it?

1 reply

Nov 8, 2021

Yes. You should raise the issue with the title insurer. At your closing, the seller is required to sign an ALTA Statement which is an affidavit to the title company that there are no contracts unpaid or unpaid work on the home. The money allocable to the roofer should be escrowed at closing or you should have the seller assign their rights to the proceeds to you and get an acknowledgement from their insurer. You must have a lawyer handle this for you and it’s a bit technical on the legal side. I hope this helps.

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