Resolved: Property Lien, Post-Purchase
In March, we found out our new property had a lien placed on it because the City found a broken window. The previous owner failed to fix it and the City sent out a contractor to remedy the issue, right before we closed on the house. The details about discovering the issue can be found in this post. I’m happy to report now the issue is resolved and we didn’t have to spend any of our own money to remove the lien.
After we paid the lien fees ($380), we had to wait for two weeks for our payment to make it through the red tape. Because the lien had kicked up to the County level, the County had to process our payment (read: take its fees) and then issue a check to the City level to pay for the government-issued contractor’s work. We were informed it could take between two and four weeks. Once the check was processed at the City level, then we could request to have the abandonment lien removed.
In the meantime, we reached out to the title company and provided backup regarding the lien including the nuisance violation and our proof of payment. Before the day was out, the title company told us they were issuing a check and would require us to sign a waiver once we cashed it. This is all because we have title insurance. I thanked the representative and told her we would sign the waiver, once all the lien issues were resolved. The check came a few days later. We will be depositing it today.
On April 16, about two weeks after we paid the County/City, the violation was resolved. That Monday, I sent my request to have the abandonment lien removed. The City sent over a form that we needed to fill out and have notarized. The petition required a copy of our LLC business agreement showing my name as a member as the property is listed as being owned by our company. I was able to submit the documents via email.
The next step required the City send out an inspector to confirm the window was fixed and the property was not abandoned. I notified my property manager so she could alert the tenant that a City inspector may be stopping by. The inspector did not require access to the property so I did not need to disturb the renter who had just moved in a few weeks earlier.
By the end of the week, the inspector had made his visit and we were notified that the lien would be released on April 30th. The City provided a link to request a copy of the release for our records, which I will request. No additional fees were required to remove the lien.
The whole process took a month. Even though that seemed like a long time, I can’t help but be impressed about how efficiently it went. Yes, I had to spend some time finding out what the steps were, but once I knew what the process was, it was easy to put everything in place to the path to resolution.
The key takeaways:
- Got a problem, ask the source. Calling the City really was the fastest way to find out what happened and how to resolve it.
- Use your resources and ask questions. We reached out to our real estate agent to see if he had ever dealt with an issue like this before. I posted a question on a couple of Facebook Real Estate Investor groups. A member shared with me that his interaction with the title company was painless and encouraged me to check in with mine to get reimbursed for the cost of removing the lien. I reviewed our closing documents to confirm we did have title insurance.
- Buy title insurance! It cost about $135 and the search itself was $175. While the title research missed this item, we didn’t have to spend any of our own money to resolve it. Overall, it only saved us about $70, but other lien issues could cost thousands to remove. We were lucky.
- Be expedient and thorough. I obsessively checked the City web site to see when our payment finally posted so we could file the petition to release the lien. It happened on a Friday and I sent the email with the request that weekend. By 8 am on Monday morning, the City sent me the documents I needed to complete the petition and by the end of the week, the inspection was complete.
Have questions or want to share your own lien story? Email firstname.lastname@example.org