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What can I do when owner has sold a property with lien

ColoradoLawsuit

I have a lien on a property and just had the "new owner" tell me to stay off the property. I informed him that there is a lien on the property, and if he was aware of this. He said no, because the original owner and he decided to do a private sale without the title company and the new owner is financing it for 7 years and will receive the title then. What can I do in this situation? The owner is uninterested in paying the lien, which is valid, with alot of evidence to prove it.

2 replies

Oct 22, 2020

In every state, there are deadlines by which the mechanics lien must be filed to be valid. If the Colorado lien deadline is met and the mechanics lien claim is filed on time, most states don't care whether the property has been purchased by a third party who didn't contract for the work. A mechanics lien is a claim against an improved property, therefore if a third party purchases the property, they will generally be held liable to satisfy the lien claim and will need to seek recovery from either the original owner or potentially, the title insurance company. 

Unfortunately, lien claims don't last forever and after a certain date, the lien is no longer enforceable. For the lienholder or party that files the lien, a foreclosure action must be filed before the lien expires. Once the lien expires, the lien won't be able to be foreclosed on. 

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Oct 22, 2020
Yes, the third party owner financed, so this did not go through a title company. The seller did not inform the buyer of the lien, nor did he care to even look to see if it was valid (he thought you needed a judgement for a mechanics lien). As it stands, it looks like he has committed real estate fraud in the sale, but the new owner did not do his due diligence either. I habe informed them voth that this has forced me to start the foreclosure process.
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