From time-to-time I comment on another blogger's post, and then I think; mmmmm, that's really a good comment, Carla. Maybe you should post your blog, and cash in on some points.
But, I'm a little lazy of late, and would rather read other bloggers blogs, comment, and call it a day.
Today, however, I read a blog post (http://activerain.com/blogsview/981507/Is-That-Property-You-Have-Listed-Eligible-To-Be-Sold) and thought about the clouds on title, and a "what if" scenario played out.
What if: the sellers, with good intention, updated their home to get ready for a good, quick, clean sale. Then things happened. They couldn't pay on the updates. The contractor, in my state of Oregon, can file a lien. They have the right to file a lien up to 180 days AFTER the work ceased, or they weren't paid.
Hmmmm . . . What if: the house sales, title is clear, and then the new owners get a Notice of Lien?
Another question for listings agents to ask in their pre-list consult:
Have you had any work performed by a licensed contractor in the past 6 months? If yes, then ask: Did you PAY THEM!
In Oregon contractors can file liens on the property AFTER 180 days of the non-payment, or when worked ceased. Contractor's liens, mechanic liens . . .
180 days is a long time to NOT know something. A house could be sold in that amout of time, and title would have shown an unencumbered title -- but then . . . oopsie!
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"A construction lien is a claim upon property for money owed to a contractor, material supplier or anyone who supplied labor or materials for improvements to the property.
If your contractor isn't paid, or if your contractor does not pay subcontractors, employees, rental equipment or material suppliers, or others who are owed money for work on your property, they may lien your property for payment.
It is in your best interest to verify that all bills are paid, even if you pay your contractor in full."
http://www.oregon.gov/CCB/consumer_help.shtml#What_is_a_construction_lien_
A SPECIAL CONSUMER PDF from the CCB State of Oregon: https://ccbed.ccb.state.or.us/WebPDF/CCB/Publications/req-cn.pdf
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Hmmm . . . even if you pay YOUR contractor IN FULL . . . your contractor may NOT be paying the SUBS! The subs have a right to lien!
Agents . . . look around the property while showing it. New windows? Extensive upates? Ask questions (in writing), and try to do as much due diligence as possible for your clients. The WHO, WHAT, WHERE, WHEN are good questions to ask. Who did the updates? What were the updates? Where were updates done? And all importantly, WHEN?
DISCLAIMER: I am a real estate agent -- NOT a Title Officer. My real estate license allows me to consult, and while NOT practicing law, licensees are allowed to DISCUSS legal specifics and give advice. That's why real estate agents ARE important to the overall home purchase!
That being said: Liens are attachments that run with the title of the property, NOT with the seller/owner (in most states). Encumberances are also called "clouds" on the title. Check your states' information about liens, and/or talk to your title/escrow people to find out how they work.
ASK if a title insurance policy will cover a lien placed AFTER the property has deeded (should a constractors/mechanics lien pop up.)
It's getting messy out here folks!!
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