A little upset right now so this is a little bit of a rant and (another) warning to investors to do your due diligence on properties before you buy them.
Just got the lien search from the seller's title company today on a the property is supposed to close tomorrow. The lien search showed a $15k+ code violation, but no lien against the property. So, I called the county and discovered that not only was the code violation a lien against the property, but that the full amount was actually over $42,000! because of daily penalties accrued since 2011! (This is an REO.)
Sooo, I have a call in to my mentor to get her advice on whether to cancel, or see if my buyer can get the $42k reduced to a much lower amount, or see if the bank wants to get it paid off before he buys the place.
Anybody have any ideas?
It's not the end of the world.
Postpone the sale, and have your title company, realty lawyer or yourself - speak to the local council to see what can be done to get rid of the lien.
My lawyer has run into it a few times, and the county have worked with them to remove the lien, and many times they have - for the simple reason that a new buyer of the property will take care of it and sort out all it's issues - which essentially is what the county wants.
Otherwise, the liens continue to rachet up, will never get paid anyway, and whoever owns the property simply abandons it, which is an expense not only to the county when they eventually condemn it (and remove it), but also a property they recieve precisely $0 each year in property tax once the owner has done a runner.
It'll take a bit of time to sort out, hence postponing closing.
I'm a little confused about your post. Unless this is a trustee or sheriff sale, why are you upset? If this is an REO, you should get clear title upon transfer of ownership. The code violation lien is the bank's problem, not yours. Since@Wayne Brooks is an agent and investor in Florida, maybe he can clear things up.
I'm guessing your purchase contract calls for clear title. If so, it's the bank's problem, not yours. They can simply simply cancel the sale of course, so you may want to help see what kind of discount they can get. Some muni's/counties will take .10 on the dollar, some want .50.
if the violation is registered as a lien against the property, then it should have been wiped out at the foreclosure auction. There is case law and FL statute in effect that governs this. However, many muni/counties are now just leaving as violations within their respective departments and not filing a lien so that they remain after foreclosure. You get clean title at sale, but if you need to pull a permit for anything, it won't be granted until the violation is paid off.
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