Recorded lien AFTER closing

Recorded lien AFTER closing

Investor · Miami, FL · Member since 2013 · 807 posts · 475 votes

I purchased a property in Miami Dade a few years back. A year after owning it, a new tenant moved in and when she tried to turn the water service on, she was told there was a lien for unpaid water. The water company wanted $3000 before they would turn the water on. I paid it immediately so that the tenant could have water but then it took month of emails and phone calls to get to the bottom of the issue.

It turned out that prior to me purchasing the property, there had been some illegal tampering and excessive water usage. This occurred when the previous owner held title. I do not know why the actual lien was not recorded until years later but that’s what has happened.

I do have a document in writing outlining the dates of the unpaid water usage and tampering and also naming the prior owner as the one responsible. I do know that this isn’t covered by the title policy as only recorded liens are covered.

I guess my only option then is to lodge a small claims action a against the prior owner. However she had the property within an LLC and she dissolved that LLC after she sold the property. I am therefore concerned about the ability to carry out a claim and collect. It was a single member LLC, so assumably a disregarded entity.

Can anyone advise the best course of action?

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Real Estate Broker · Greer, SC · Member since 2013 · 548 posts · 271 votes
6y

If you bought an owner's title insurance policy, file a claim.  Title insurance covers liens that were missed at close from when you bought property back to when God created the Earth.

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  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    6y
    Originally posted by @Ryan Howell:

    Usually there is a time limit required to record the lien - 120 days from the work being done or something similar.  Is there a limit in FL?

    90 days from last providing goods or services to the project

  • Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    Hmm, OK< I'll have to go thru the paperwork on the last closing I had from title.  I don't remember a stipulation like that in the normal matter of course, but am curious.

    I had it happen once about 10 years ago.  Nothing like having a seller/buyer unhappy about a bill.  Seller did pay it though.

  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    6y
    Originally posted by @Steve Morris:
    Originally posted by @Tom Gimer:

    @Peter Walther In every state we cover, water is treated as a lien whether or not recorded. Pay current bill, escrow for usage, prorate final bill after closing. Here is the current law where the subject property lies:

    http://miamidade.elaws.us/code/coor_ch32_artvi_sec32-93

    Unpaid for 60 days... lien.

    Not in Portland.  Besides if it's unrecorded, how is it a lien WRT to how title handles it under standard title?

    I don't understand the question.  What's WRT?

  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    6y

    @Ryan Howell For a utility lien,  no time limit as the recorded lien isn’t required.  For a mechanics lien in FL, 90 days from completion of their work.

  • Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    WRT = With respect to.  Sorry, ex-engineer and use too many TLA (three letter acronyms).

    The liabilty and lien and responsibility of the principals I get - I'm just curious about how much the title insurance will cover.

  • Member since 2018 · 1k+ posts · 1k+ votes
    6y
    File the claim with the title company anyway, and be prepared to file suit against the prior owner and her LLC. Title companies have sellers fill out affidavits covering unrecorded mechanics liens and judgment liens, etc. I don't know about your case, but maybe that affidavit covers unpaid water. Worth a try.

    As for her and her company, sound like there is a fraud action, and certainly breach of contract.
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