If you are planning to buy a house or property, one of the first things that you should check is the existence of outstanding mechanic liens attached to the property title. Many contractors, service providers, and suppliers file a mechanic’s lien claim against the title of the house or property for non-payment of work done for or to the property. If you don’t check for mechanic liens for the property you’re eyeing, you could encounter problems, such as property foreclosure, double payment, or negative reputation placed upon the title. This article will help you in checking for mechanic’s liens on properties that you are planning to buy.
Since filing a mechanic’s lien against property involves public and legal transactions, records of such transactions are accessible from the public records. The court usually has records of every mechanic lien filed against properties. Go to court, and then ask about the property you are considering.
Check the pertinent state laws, especially if the property you’re considering is out-of-state. The laws in your state may not be applicable to the out-of-state property that you’re planning to buy. Never presume that the property in another state is governed by the same laws as those governing your state. Each state has its own laws.
Another way to check for liens is to have a title company do the checking for you. Title companies often monitor real estate titles, including the liens attached to them. The title company can do your investigative work for you for a fair price. It is better to spend for background checking on your prospect property than to spend sleepless nights thinking about how to stop your property from being foreclosed.
If the property you are intending to buy has a mechanic’s lien attached to it, you can try determining the validity of the claim. Oftentimes, a lien is rendered invalid because one or two of the parties involved did not comply with the requirements (most likely paperwork) within the allowed time. However, unless you have a background in law, it would still be prudent to determine the lien’s validity only as a preparatory step to hiring a lawyer.
You can also hire a lawyer. Court papers—mechanic’s liens not excluded—abound in legal gobbledygook that may sound Greek to you, and lawyers speak that gobbledygook. Hiring a lawyer can also help you avoid misinterpreting court documents yourself. For example, you could misinterpret the validity—or invalidity—of an existing lien upon the property, and, based on that misinterpretation, you could hire a contractor to perform further work on the property. The result could be catastrophic—and costly. So, enlist the service of someone who speaks legalese.
Knowing whether a property you plan to buy has a mechanic’s lien attached to it can help you avoid future problems. You probably don’t want your newly bought property to be foreclosed because you cannot pay off the lien. You probably won’t like paying again for the same job that had been done by a prime contractor who didn’t pay a subcontractor or supplier. You also won’t like the idea of your property’s having lesser value whenever you need to use it for mortgage, refinancing, or reselling. Check, then, for mechanic’s liens on your property before taking out your checkbook.