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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Real Estate Law
Satisfied Customers: 12832
Experience:  B.A.; M.B.A.; J.D.
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If an abstract company misses an outstanding bill prior to

Resolved Question:

If an abstract company misses an outstanding bill prior to closing, and as a result, a lien is applied several years after the property transaction has taken place, is the abstract company liable for damages in addition to the cost incurred to satisfy the lien?

The missed utility resulted in a lien placed against me in 2010. I was unaware of the lien until attempting to refinance my primary residence.

The incident occurred with an investment property purchase and insurance was obtained for this service.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Phillips Esq. replied 1 year ago.
Thank you for giving me the opportunity to assist you. Kindly use CONTINUE or REPLY button to ask for clarification or follow-up questions.

Could you explain a litte more?

What other damages are you claiming other than the cost to satisfy the lien?
Customer: replied 1 year ago.


Honestly, the fact that there error has impacted my, and also my wife's credit negatively for the last 2.5 years as a result of the missed debt. Being insured, I would think that there should be some level of compensation for this. Am I wrong to assume that the insurance should also damages resulting from there lack of diligence in conducting the title search. Is a damaging credit issue a compensable item?

Expert:  Phillips Esq. replied 1 year ago.

Thank you for the information. I am sorry to read that your credit was negatively impacted:


Honestly, the fact that there error has impacted my, and also my wife's credit negatively for the last 2.5 years as a result of the missed debt. Being insured, I would think that there should be some level of compensation for this. Am I wrong to assume that the insurance should also damages resulting from there lack of diligence in conducting the title search. Is a damaging credit issue a compensable item?



Response: Unfortunately, the abstract company is only liable for the cost of getting the lien taken care of. I am not sure how a lien placed on the property before your ownership of the property would impact your credit since the lien was not placed against you. So, it would be very difficult for you to make a claim that your credit was adversely impacted. Even if you were able to do so, you have to produce documentation for the damages that you suffered.

Customer: replied 1 year ago.


Just to clarify, they neglected to satisfy an unpaid debt, prior to closing on the property in 2002, that evolved into a lien. Apparently, this debt was sitting idle until the utility provider applied the lien to this investment property in 2010.


 


Correct me if I am wrong, but when a title search is conducted, by a refinance company as an example, any liens whether it be on an investment or primary residence still fall back to my credit.


 


I asked the refinance company why it showed up since it was attached to an investment property and not the property (my primary residence) I am refinancing and they stated that the search will find anything that is attached to my name.


 


Im not sure how this doesnt impact my credit. Liens do not reported to credit agencies?

Expert:  Phillips Esq. replied 1 year ago.

Just to clarify, they neglected to satisfy an unpaid debt, prior to closing on the property in 2002, that evolved into a lien. Apparently, this debt was sitting idle until the utility provider applied the lien to this investment property in 2010.

Correct me if I am wrong, but when a title search is conducted, by a refinance company as an example, any liens whether it be on an investment or primary residence still fall back to my credit.

Response: I am not sure that I understand where you are going with this. If you are doing a refinance on a property, the search is done on that property. If you used that property for collateral for another property, then the search would also be made on the other property.

I asked the refinance company why it showed up since it was attached to an investment property and not the property (my primary residence) I am refinancing and they stated that the search will find anything that is attached to my name.

Response 2: That is correct if they are searching by name instead of by property address.

Im not sure how this doesnt impact my credit. Liens do not reported to credit agencies?


Response 3: Liens are generally not reported to the credit bureaus. Only the underlying debts are reported.

Phillips Esq., Attorney-at-Law
Category: Real Estate Law
Satisfied Customers: 12832
Experience: B.A.; M.B.A.; J.D.
Phillips Esq. and 9 other Real Estate Law Specialists are ready to help you
Customer: replied 1 year ago.


Clarification to response 1: That was my point, if the debt is attached to another property, why is it showing up as a lien when Im not using that investment property for anything. It has nothing to do with the refinance of my primary residence (its not being used for collateral).


 


Should this lien even be a factor in the refinance? Based on your responses, it should not carry any weight in my situation.


 


Last question I hope, sorry, just trying to fully understand

Expert:  Phillips Esq. replied 1 year ago.

Clarification to response 1: That was my point, if the debt is attached to another property, why is it showing up as a lien when Im not using that investment property for anything. It has nothing to do with the refinance of my primary residence (its not being used for collateral).

Response 1: Frankly, I am not sure why this lien should be a factor since it has nothing to do with the property that is being refinanced. The lender's primary goal is to make sure that it is the first lien holder. That is it. I do not know why the title company would drag another property into it when the property being refinanced does not have any connection to another property.

Should this lien even be a factor in the refinance? Based on your responses, it should not carry any weight in my situation.


Response 2: No, it should not.

Last question I hope, sorry, just trying to fully understand


Response 3: There is no problem. Please do not hesitate to ask for clarification. I am going to grab something to eat and would respond to any follow-up questions you may have when I return from lunch.

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