Selling a home is often a difficult and complicated proposition. When you are found to have a judgment or lien against the property, it can be a blemish on your title that can further complicate the sale. A lien is essentially a claim that is legally placed on your property for a debt that you owe. When the court places a lien on a property on behalf of another person, business, or agency, it will be used to satisfy the debt owed that the property owner has failed to pay. That means if you sell the property, the lienholder will be paid the debt from the proceeds of the sale.
A judgment is similar to a lien. It generally comes about from a lawsuit filed against you that you lose. The court then issues a judgment for a monetary amount in damages that you owe to the other side. This can be enforced through a lien placed on your property as well.
Liens can be placed against your property by a variety of people. Examples of lienholders can include but are not limited to the following:
- Any assessment by the local government for sidewalk violation, failure to maintain the property, water and utility charges.
- Contractors, subcontractors, and other professional workmen who have provided materials and improvements to your property; this is called a mechanics lien or a materialman lien.
- Homeowners Associations liens for failing to pay your homeowner association fees or for having broken rules or regulations of the homeowners association agreement, such as removing a tree, failing to keep your property maintained in a certain way, or other lapse.
- Liens placed on your property by the Department of Revenue for unpaid New York state taxes.
- Liens placed on your property by the IRS for failure to pay federal income taxes. This is the most serious of all liens.
Selling Your House When Encumbered by a Lien
Both liens and judgments will come up when selling your home through a standard title search. When “defects” on the title are found such as liens and judgments, they will have to be resolved for the sale to go through. That means you will have to find a way to handle the lien so that you can provide a clean title. Most buyers will not want to take on the burden of your past debt when acquiring the property.
There are several ways in which you can handle this situation. The easiest and quickest way is to simply pay off the debt that you owe if you have the funds to do so. You can also let the sale go through if you have equity in your home; you can have the lien paid off with the proceeds of the sale if those proceeds are enough to cover it. If these methods do not work for you financially, you will have to find an alternative.
You may wish to dispute the lien amount with the lienholder. This would be necessary if you believe the lien is in error. Engaging the services of an attorney experienced in this is recommended. You could negotiate with the lienholder to have the amount reduced. Another negotiation option is to pay off part of the amount you owe while being allowed to have the balance placed on another property or on some other asset or through a payment plan. For example, this may work with the IRS with whom you may be able to negotiate a partial payment through your property sale and a monthly payment plan for the balance with an affordable amount.
Find a Solution with Help from James J. Quail & Associates, P.C.
Title problems call for the services of a real estate lawyer who deals with these issues routinely in your area. If you believe the lien placed on your property is in error, it will be to your advantage to have an attorney who can help you prove the error so as to have it eliminated or reduced. Our firm has experience in these matters. Attorney Jams Quail understands how to remove liens and judgments from properties, how to navigate the time limits involved in these issues, and how to help you move forward as efficiently as possible so that you can conclude the home sales transaction.
Ready to discuss your options? Get a free 30-minute case consultation by contacting our firm at (516) 246-2449 today.