Buying property is a big deal. Whether for your next home or as part of a business plan, you need to vet the property. One part of this due diligence is to perform a lien search. What is a lien search? Read on to learn more.
A lien is a legal claim to the assets of a debtor. For this post, we are talking about liens on real estate. A lien’s purpose is to pressure the debtor to pay the debt they owe. That pressure comes from the possibility of the creditor seizing the property.
Properties can be subject to liens for different reasons. For example, there are tax liens, mechanics liens, and judgment liens. You also have voluntary liens and involuntary liens. Regardless of the type, a lien on a property can be a problem if you are planning a purchase.
With a lien search, you are investigating any liens that may be on a property. You could perform a lien search for any number of reasons. However, they are a common part of due diligence in real estate deals.
The transaction type will affect how you develop a lien search strategy. A lien search will likely be simple if you plan to buy a single-family home from a previous resident. However, it might be more complex if it is for commercial property or a part of a business transaction. Buying multiple real estate holdings in one deal can also complicate the process.
Once you have assessed the deal, you need to identify the relevant parties. A simple home transaction will usually be more straightforward. When looking at a partnership, you need to identify every partner. For a corporate entity, try to find the names of all the members. You need to know the names of any party that could have a claim to the property.
At this stage, you can start digging into the records. Since liens are public records, you should be able to obtain information from the county clerk. Tax liens may also be discoverable at the local assessor’s office. You can also search state records online. However, that does not guarantee that you will uncover everything in these searches. The services of a title company can be valuable for developing a complete lien report on a property.
Do you need to close your escrow on time and professionally in Tennessee? We’d love to help you! Please click here for our contact page, and we’ll reach out to you promptly.
Would you like to see more great info from The Title Group of Tennessee? Please click here for our blog page.
Thanks for visiting!