Lien Back…

 

Did you know that Florida law allows municipalities to put a lien against property without actually recording the lien until they feel like it? And if these liens are not recorded at the time a buyer purchases the property, they will not show up in a standard title search. That means a buyer may have purchased a property that comes with the unpleasant surprise of a large unpaid bill from a previous owner. Even scarier is the fact that Florida law gives some of these liens priority over all other liens on the property, including mortgages, which means the municipality could foreclose on the property if these bills are not paid!

This is why it is imperative to conduct a municipal lien search on all property being purchased. A typical municipal lien search involves contacting the local municipality and inquiring about three areas that a standard title search does not cover: (a) unpaid utilities, (b) code enforcement issues/violations, and (c) permit issues. Because each municipality has its own process for returning the information for these searches, the turnaround time on these searches can vary drastically. Some municipalities take upwards of 30 days to return these search results! This can put the buyer in the precarious position of being ready to close without knowing if there are any unrecorded liens on the property. We’ve seen buyers close on property prior to receiving the search results, only to find out after closing that they just inherited an outstanding issue. If the title insurance company doesn’t have the full municipal lien search results back prior to closing, they will not cover anything that show up in that search after closing.

Because of this harsh reality, we always urge the parties to consider the timeframe in which their municipality generally returns searches results prior to setting a closing date. For example, for properties in the City of Tampa, we would inform you that a rush closing might not give you enough time to get search results back. This simple step could help prevent a situation where the parties have to postpone closing, or even worse, the buyer is on the hook for an issue they had no way knowing about. If you would like more information on the general turnaround times for a certain municipality, or would like to know if a municipality can place a lien against your property for a specific issue, this is something your real estate attorney can help you understand better. And if you are part of a transaction where the parties must close prior to receiving the results of a municipal lien search, we strongly encourage you to contact your real estate attorney to discuss potential risks and solutions.

Sincerely,
Berlin Patten Ebling, PLLC
Article Authored by Bishoy M. Habib , Esq. bhabib@berlinpatten.com

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

www.berlinpatten.com

SARASOTA
3700 South Tamiami Trail, Suite 200, Sarasota, FL 34239
P (941) 954-9991 F (941) 954-9992

VENICE
247 Tamiami Trail South, Suite 201, Venice, FL 34285
P (941) 955-9991 F (941) 484-9992

LAKEWOOD RANCH
8433 Enterprise Circle, Suite 100, Lakewood Ranch, FL 34202
P (941) 907-9022 F (941) 907-9024

TAMPA
442 West Kennedy Boulevard, Suite 312, Tampa, FL 33606
P (813) 467-7500 F (813) 251-1662

Did you find this real estate law content useful, but need actual legal counsel?

Speak to a real estate attorney!

, , , , , , , , ,

The Creature from the Black “Mold” Lagoon!

With Halloween just around the corner, it is only appropriate we save the most grotesque, frightening, and potentially deal breaking subject for last; mold! Given the climate of the tropical paradise we call home, this lurking menace is ever prevalent, ready to strike when you least expect it. In the previous version of the FAR/BAR…

FAR/BAR Contract Updates: Volume 3-Section 8

This week’s contract updates are focused on the financing section of the contract and primary discuss the changes to the financing contingency. A copy of the redline version of the contract is available here, https://berlinpatten.com/wp-content/uploads/2021/10/03843547.pdf for reference. With the uptick of appraisal related issues that we have seen in the last year, it is no…
Menu