Liens on Property: Common Title Issues That Can Delay Your Closing
When a property goes under contract, most people focus on inspections, financing, and the closing date. What many don’t realize is that liens on the property are one of the most common reasons a closing gets delayed.
A lien is a legal claim against a property to secure payment of a debt. If a lien appears in the public records, it must typically be resolved before the property can be sold and clear title can be conveyed to the buyer.
Identifying Liens During a Title Examination
During a title examination, a closing attorney will search the public records to identify any liens that could affect the property. In Georgia, some of the most common types include:
1. Tax Liens (Unpaid Property Taxes): If a property owner doesn’t pay their property taxes, the state can file a lien that attaches to the property. In Georgia, tax liens take priority over most other liens. If they are not paid, the county can eventually enforce the lien through a tax sale. At closing, any outstanding property taxes must be paid in full to clear title.
2. Judgment Liens: When a creditor obtains a judgment against a property owner, that judgment can be recorded and become a lien against the owner’s real property. Judgment liens can be especially problematic because they attach to all properties owned by the debtor, they can remain in effect for years if not properly satisfied or released, and they often require coordination with the creditor to obtain a payoff and release. Before closing, judgment liens must typically be paid off or otherwise resolved to ensure the buyer receives clear title.
3. Materialmen’s Liens (Contractor Liens): Materialmen’s liens arise when contractors, subcontractors, or suppliers are not paid for work or materials provided to improve a property. These liens are common in situations involving recent renovations or construction, disputes between homeowners and contractors, and work performed shortly before the property is listed for sale. In Georgia, materialmen’s liens are strictly governed by statute and must be properly filed and enforced. Even if a lien is disputed, it can still delay closing until it is resolved, secured by a financial guarantee (surety bond), or otherwise addressed.
Liens are a routine part of real estate transactions, but they require careful handling. A thorough title examination by an experienced Georgia closing attorney will identify these issues early and help ensure they are resolved before they delay your closing.
Since 2003, Origin Title has handled real estate transactions – purchases, refinances, reverse mortgages – quickly and professionally. There will be no surprises, nothing misunderstood. Title searches are thorough and well-reasoned, to avoid unpleasant surprises later down the road. Calculate your closing costs in Georgia or Florida using our calculator or contact Origin Title using this form.