A municipal lien search is critical when purchasing a property. There can be undisclosed or unknown costs, fees, or other problems that will impact your buyer’s post-closing. Performing municipal lien searches will help your seller ensure they comply with all contract terms, so they avoid a default. Issues that have arisen during lien searches include:
- Pending code enforcement liens totaling more than $3,000.00
- Utility balances that were not paid in full with some as high as $5,000.00
- Permits that should have been closed but were still open
- Failure of final inspections
Usually, you would not uncover these situations unless you order a lien search. If not discovered prior to closing, your buyer could end having to pay these fees, or they may have to resolve code enforcement issues or permit issues, so the property complies. These processes are expensive and take a considerable amount of time. In the end, the property could be listed as unmarketable.
Municipal Lien Searches are Not Part of Normal Title Search
A common misconception is that a municipal lien search is done as part of the usual title search. The title search and the municipal lien search are two completely separate items performed by different parties.
Municipal liens against a property are not usually revealed in the traditional title search. The municipality does not always publicly record overdue utility bills or recurring code violations. Because of this, lenders, underwriters, and homebuyers need to request municipal lien searches to prevent any issues that could be lurking in the shadows to cause significant difficulties after closing.
Municipal lien searches include:
- Determining the municipality of the property
- Confirming utilities are paid and accessible
- Researching the history of the property concerning annexation
- Finding the authorities who have the power to levy special assessments on the property
- Requesting information from all appropriate departments
Options if there are issues found during a lien search
If there are any issues found during the municipal lien search, property buyers generally have three options, depending on what is listed in their purchase contract:
- Ask the seller to compensate them as the buyer for any costs to correct issues uncovered
- Ask the seller to take care of the problem before closing
- Decline the deal and walk away
Where to Find More Information on Municipal Lien Searches
Property Debt Research is your trusted source for performing municipal lien searches. We have more than twenty years of experience in the industry, and with the use of cutting-edge technology, we can provide you fast turnaround times. With our knowledge of performing a municipal lien search, you are guaranteed accuracy quickly. You will not find anyone in the industry who can perform the same quality work as Property Debt Research.