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Will the title company satisfy my mechanics lien before they allow the owners to sell the property to the new buyers?

IllinoisMechanics Lien

I'm a general contractor. In the midst of the job, the owners quit paying me, so I had to stop working. They promised to pay me on the next pay out from their hard money Lender ( this was a fix and flip ), but continued to give me excuses and then finally said they were not going to pay me. I intern came to levelset and they put the lien on the property for me. Now the owners of the property are trying to sell the property and I'm worried that they will be able to sell it without compensating me for what they told me. What should I do.

1 reply

Apr 22, 2022

You state that LevelSet recorded a Mechanics Lien claim against the title of property that the owners now seek to sell.

A Mechanics Lien represents a defect on title. A title company will not insure the title of a property to be transferred to a buyer until all title defects (including Mechanics Liens) have been resolved. In other words, if the Mechanics Lien was properly filed and perfected then it must be dealt with in order for the property to sell.

Note that a title defect such as a Mchanics Lien can be addressed in a number of ways, primarily:

  1. Pay the Lien Claim in return for a Release; or
  2. Insure over the Claim by setting aside money from the sale (a "Title Indemnity")

As you can see, either way some accomodation must be made, and since the Seller will want to collect all his money, the most likely outcome is that you will be contacted to provide a Release in exchange for payment.

I hope this information was helpful. Best of luck!

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