Liens are legal claims or encumbrances against a piece of property in an attempt to settle an outstanding debt by taking possession of the property or by taking the proceeds should the property sell. One of the most critical legal steps in real estate transactions is performing a title check, thereby ensuring that the title is clear of any liens. Voluntary liens, such as a mortgage, allow the lender to foreclose on the property for nonpayment. And then there are the involuntary liens, typically placed on the home by a third party such as a creditor, business, or government, without the property owner’s consent. These are the liens that pose issues for buyers if they remain undiscovered.
Before beginning your search, you should know that different types of liens may exist on a property. While most are a matter of public record, a title search only locates any problems with publicly recorded liens, likely to be an issue in selling. However, unrecorded liens that are not satisfied will still transfer to the buyer. Unrecorded liens are municipal debts that Maryland investment buyers can locate through a municipal lien search, including unpaid local and federal tax debts.
When you purchase property, you are also buying the responsibility for the debt owed if there should be an existing lien, meaning the title is unclear or clouded. A clear title is required to complete a transaction to sell a house or obtain a loan on the property. Rectifying clouds on a title often involves filing a civil action to quiet the title, such as quit-claim deeds.
We will explore how to do a lien search for Maryland investment buyers.
The county property appraiser will provide the governing municipality with the records for the property. You should also check previous property annexations from one governing municipality to another for any liens before the annexation. You will also want to research which utility companies, such as water or sewer providers, service the address. Maryland investment buyers must also review governing authorities with the power to levy special assessments on the property. Now that you have the resources for the information you need, you can complete the following searches:
- Property Taxes
- Special Assessments
- Tangible Personal Property Taxes
- Utility Lien
- Code Violations
- Permit History
- Online Lien Search
Investment buyers may have access to records online to conduct a lien search for Maryland property through the county clerk, recorder, or assessor’s office online. With the property address and name of the owner, you should have everything you need to execute your search. These portals are very user-friendly and are the best source to access this data. Before performing the search, phoning the county assessor’s office can help you understand how they perform checks for liens on property in Maryland.
In-Person Lien Search
Suppose your preference is to perform an in-person lien search, Maryland. In that case, investment buyers may go to the assessor’s office to retrieve the parcel number and the tax information for the property, and the personnel is familiar with the process. Feel free to ask for assistance if you need guidance in performing your search, and they should be happy to assist you. A visit to the county clerk’s office will then provide you with the history of ownership, where you can check the chain of the title or history of ownership, thus avoiding issues with a broken chain of title down the road. You can also improve your odds of a smooth title transfer by running a public record search on each prior owner so that the records have no missing data and exactly matching names.
Third-Party Lien Search
Several third-party businesses exist online and in Maryland, which offer title, property record, and lien search services for Maryland investment buyers. While there is a cost to working with a professional title company or a title abstractor, the fee includes providing the title report, which protects against unforeseen issues. This report contains all information uncovered during the title search, including any clouds on the title.
Title insurance would be a preventative measure if a lien search failed to discover a cloud on the title. This policy protects buyers from financial losses or legal expenses, given the defect is covered in the policy. Considering that these issues can run into tens of thousands of dollars, lenders title insurance or a loan policy is paid for by Maryland investment buyers and covers the lender from financial loss.
Let our experienced professionals at Simple Homebuyers make it easy! Simple Homebuyers can guide you through a lien search when buying Maryland investment property. And Simple Homebuyers always has a steady inventory of Maryland investment property available! Our in-house team of experts at Simple Homebuyers is ready to help you get started right now. Call Simple Homebuyers at (240) 776-2887 or send us a message today!