About 2 months ago I bought an investment property. Closed on it, and everything was aok. Supposedly.

I get a call today from the sellers saying that they got a notice of lein from the town. I immediately called my title company and the tax collector who says the taxes were never paid by the sellers so they are attaching the lein to me.

Somehow the title company missed this little problem. Title company says they checked and at the time it did not show up in the records as delinquent. Hell, I even paid prorate at closing twords the taxes they never paid.

So either this is an oversight on someones part, or I am going to have to sue somebody.

Dirty bitches.

Update:

The sellers contacted me this morning saying they will be paying the back taxes. I am not sure why they never paid the taxes in the first place - or why the title company did not catch it at closing. The seller warned me to not do business with this title company any longer. The seller's company buys and builds properties throughout southern Maine and tell me the title company always mucks stuff up. So I will not be using this title company any longer.

wow

Title insurance fucked up, and they'll need to fix it.

Idiots.

how much?

Quoted: Title insurance fucked up, and they'll need to fix it. Idiots.

+1. That's what they get their $500.00 for. (even when you have to re-re-research your own deed when you refi, and you use the same T.I. company, they still hit you for the fee.)

You may wind up having to sue them, but they get paid to clear the books, not "oopsie" something.

If you had a title search, you may be stuck with it.  If you bought title insurance, the title company has to eat the loss.  

Quoted: how much?

Around 800 bucks now due to penalties and interest. Plus I paid them 300 twords prorate for taxes that were never paid. I'll tell ya, the next house I buy I am checking the tax status myself.


Yeah, the title company dropped the ball

Eh? Real estate must work VERY differently there. The prorated tax figure through the date of possession should have shown as a credit to you on your HUD-1.

Typically, the credit is given at closing and the new owner pays the tax bill when it arrives and they have already received the seller's prorated share via credit given at closing. This figure is usually estimated based on the previous year's tax bill when actual figures are not available. In some areas estimates are typically based on 3-5% increases.

If you were the buyer, I can't imagine why you would pay a prorated portion of the taxes at or before closing as I presume you had not taken title nor possession prior to closing and would therefore not be responsible for any accrued property tax amounts. Didn't you get a tax bill? Can you post your HUD-1 figures?

eta: most title insurance policies explicitly exclude any liability for taxes from coverage. If this was a pre-existing lien for past due taxes that should have been picked up in a search and was not excluded on the commitment, then you might have something. Additionally, I would hope that your Real Estate contract provided for good and merchantable title free of liens or encumbrances. In that case, you could conceivably have recourse against the sellers.

Did you have an attorney? Cheap insurance

Quoted: If you had a title search, you may be stuck with it.  If you bought title insurance, the title company has to eat the loss.

I bought title insurance. The issue is that no lein was on the property at the time of closing. The title company says they checked but they did not check for back taxes owed and the closing occured. Since there was no lein filed at closing i have been told it is not a title issue. So I may be F'ed in the A and have to take it to the courts.

Quoted: Quoted: If you had a title search, you may be stuck with it.  If you bought title insurance, the title company has to eat the loss.   I bought title insurance. The issue is that no lein was on the property at the time of closing. The title company says they checked but they did not check for back taxes owed and the closing occured. Since there was no lein filed at closing i have been told it is not a title issue. So I may be F'ed in the A and have to take it to the courts.

What exceptions are listed on the title commitment?

Quoted: Didn't you get a tax bill? I don't think So. Can you post your HUD-1 figures? I can look at my hud 1 Did you have an attorney? yes and he is already notified, thanks!

The reason I prorated was because the tax had been supposedly paid through June. I bought on April 15th so I had to pay a prorate from april 15th-June 30th (for which he had supposedly paid). Somebody commited some kind of fraud here.

Quoted: Quoted: If you had a title search, you may be stuck with it.  If you bought title insurance, the title company has to eat the loss.   I bought title insurance. The issue is that no lein was on the property at the time of closing. The title company says they checked but they did not check for back taxes owed and the closing occured. Since there was no lein filed at closing i have been told it is not a title issue. So I may be F'ed in the A and have to take it to the courts.

This is what title insurance for. To ensure you have a CLEAR title.
You won't have to file suit, just tell them you are going to go to the media.

Quoted: Did you have an attorney? yes and he is already notified, thanks!

Then you're on the right track, good luck!

This is what title insurance for. To ensure you have a CLEAR title. You won't have to file suit, just tell them you are going to go to the media.

I diddnt think title insurance covered a lein on back taxes when no lein existed prior to closing. The lein did not show up until 5 days after closing.

What a mess.

Quoted: Quoted: Quoted: If you had a title search, you may be stuck with it.  If you bought title insurance, the title company has to eat the loss.   I bought title insurance. The issue is that no lein was on the property at the time of closing. The title company says they checked but they did not check for back taxes owed and the closing occured. Since there was no lein filed at closing i have been told it is not a title issue. So I may be F'ed in the A and have to take it to the courts. This is what title insurance for. To ensure you have a CLEAR title. You won't have to file suit, just tell them you are going to go to the media.

Media threats usually work well...

You got Lenin in your house ?!    YEAH RIGHT !!!!  Sure you do...


 


LB

So far I bought 6 pieces of  real estate and 2 houses. I always get the title insurance.You just never know. I am about to purchase another  lot from a well establish developer and I still get the insurance.

Quoted: This is what title insurance for. To ensure you have a CLEAR title. You won't have to file suit, just tell them you are going to go to the media. I diddnt think title insurance covered a lein on back taxes when no lein existed prior to closing. The lein did not show up until 5 days after closing. What a mess.

You paid them to do a title search, right.
It is what they do. The title company is suppose to check to make sure the taxes are paid and if they aren't you can't close without a certified check made out to pay them.

Quoted: ] Media threats usually work well...

I bet it would work really well if the realtors and financial institutes refused to do business with them for such a big fuck up.

Quoted: Quoted: Title insurance fucked up, and they'll need to fix it. Idiots. +1. That's what they get their $500.00 for. (even when you have to re-re-research your own deed when you refi, and you use the same T.I. company, they still hit you for the fee.) You may wind up having to sue them, but they get paid to clear the books, not "oopsie" something.

+1
That's wtf they are there for. They blew it. And you better look into the legality of the previous owner's debt being attached to you, that's bullshit.

Whats up trooper im in Yarmouth

Title insurance will cover that but that is the easy part.
that tax lein is going to go on your credit report so make sure you keep all the paperwork as it will be your responsibility to clear it up. If you choose to contact a  credit reporting agency you want to make sure that this adverse report (tax lein) is being removed from your entire history and not just the report that that you are working from. The S.O.P is to remove or supplement as they call it your report if you can provide the correct information but once your credit cycles more times than not something you thought you had cleared up comes back to haunt you

If your property is in Portland, they are notorious for not giving a f--- and having tax leins pop up after property sales as i have been on all sides of the transaction buyer of multi unit seller of multi unit and broker

I need to add a few more things....there seems to be a bunch of CMA between the title company and tax assessor going on.

2 months ago according to the title company, the tax assessor didn't even show any deliquent taxes owed, but a short 8 weeks later they already have a lien. Going from not late to a lien in 8 weeks I would think is pretty quick.

On top of this you said that the previous owners contacted you......did they say they paid the taxes or not?
If they paid them do they have the reciept?

Finally what is your financial institute saying.....because it doesn't matter if you or them have the policy. They are not going to want to see, or allow, your property auctioned to settle the lien. I would get them involved.

Good Luck

Quoted: I need to add a few more things....there seems to be a bunch of CMA between the title company and tax assessor going on. Title Company is on my side. They say the Prior owners are to pay, but also insist on still attaching the lein to me. 2 months ago according to the title company, the tax assessor didn't even show any deliquent taxes owed, but a short 8 weeks later they already have a lien. Going from not late to a lien in 8 weeks I would think is pretty quick. The Tax office is saying as of closing the information was in the computer for delinquency. So my Title company was either lazy, or incompetent. I bought the property from a company not a person so there is a possibility that the taxes were overlooked.The company has not refused to pay what they owe yet, but I will find that out today On top of this you said that the previous owners contacted you......did they say they paid the taxes or not? If they paid them do they have the reciept? the owners did not contact me. They hire a financial firm to do their books and they are the ones who contacted me. At the time they contacted me, I thought it must be a clerical error on the part of the town because I pay my taxes through escrow. Finally what is your financial institute saying.....because it doesn't matter if you or them have the policy. They are not going to want to see, or allow, your property auctioned to settle the lien. I would get them involved. My financial institute is not involved as of this time Good Luck

Quoted: Whats up trooper im in Yarmouth Title insurance will cover that but that is the easy part. that tax lein is going to go on your credit report so make sure you keep all the paperwork as it will be your responsibility to clear it up. If you choose to contact a  credit reporting agency you want to make sure that this adverse report (tax lein) is being removed from your entire history and not just the report that that you are working from. The S.O.P is to remove or supplement as they call it your report if you can provide the correct information but once your credit cycles more times than not something you thought you had cleared up comes back to haunt you If your property is in Portland, they are notorious for not giving a f--- and having tax leins pop up after property sales as i have been on all sides of the transaction buyer of multi unit seller of multi unit and broker

Hey Hockey! My properties are in Auburn. The funny thing is that this house flipped 3 times in the last year and the person named on the lein is the person who sold the property to the company who sold it to me. So I am not named on the lein. I just have the lein attached for some reason.

are you a broker/agent?

Thanks for the advice!