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Lien received at recordering office the day after an offer was accepted?

We renovated an entire house for a flipper who had very little experience. After purchase price, hard loan company, our total, HVAC and a roofer he ended up losing money on the property at the amount he had to list it for. He did not pay our final Installment of over 7k. He’s fully aware we filed. I purchased the expedited service which was received by the recorder today, but it looks as though he’s trying to push through an offer he received yesterday (seen it on Zillow & Realtor). His real estate agent, who was the one who referred him to us, is also aware of the lien. Is there a chance they could have done a search for liens already and the unsuspecting home buyer will end up with a lien on their new property? Sorry, this is my first time in 8 years having to do this. I’m not familiar with the procedure.

1 reply

Jun 6, 2018

That's an interesting question. Unfortunately, the scenario laid out above seems entirely possible - a search for liens conducted immediately prior to a lien filing may very well give the false impression that the property is free of liens. For a claimant, the sale of recently liened property wouldn't be fatal to recovery. Mechanics liens attach to the underlying property, so upon sale, the lien would remain with the property. However, as alluded to above, this could quite possibly create an unfair situation for unsuspecting buyers. Luckily, because the closing processes tends to take some time, there's a very real chance that any lien filing would be uncovered prior to closing. Further, a real estate agent and owner aware of a mechanics lien filed against the property would likely be required to disclose that information prior to close - even if a search did not unveil a lien claim against the property.

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