Home>Levelset Community>Legal Help>Property I have lien on closed last week....

Property I have lien on closed last week....

after filing a lien for nonpayment in summit county Colorado for remodeling work completed and billed the unit has sold whats next? Completed proper paperwork which was sent correctly. I am under the impression that title company couldn’t transfer title until all liens paid off. Lien is recorded but I have not heard anything.

1 reply

Sep 30, 2019

Lien make it difficult to transfer (or refinance) property, but it can still happen. The reason that property is usually "not able" to be sold when encumbered by a lien is that 1) not many people or entities want to purchase a property subject to a lien, since the lien is attached to the property itself and not the particular owner; and 2) because the lien encumbers the property, the property does not have clear title - so it is basically impossible to obtain title insurance. Since most parties purchasing property do so with the financial assistance of a mortgage lender, who requires title insurance, it is difficult for liened properties to be sold. However, while relatively rare, a property subject to a lien may be sold, if the purchaser either doesn't care, or (for some reason) doesn't know about the lien. If the property is sold, the sale by itself has very little impact to the lien holder. Provided the lien was timely and properly recorded, all required notices were provided, and the rest of the statutory rules and requirements were met, the lien will remain in place and an action to enforce the lien may be initiated. A change in ownership doesn't modify the applicable deadlines, so an action to enforce a Colorado mechanics lien must still be initiated within 6 months of the completion of the project. If an action to enforce a lien is initiated against the property, the new owner will be forced to either pay, or the property may be foreclosed and sold to satisfy the debt. Either the new owner either knew of the lien and purchased the property anyway, or if the new owner was not aware of the lien against the property s/he may have a claim against their title insurance company, or some other party.

1 person found this helpful

Helpful