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Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 45520
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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I need legal help asap and dont know what to do. I am currently

Customer Question

I need legal help asap and don't know what to do. I am currently in a contract to sell a property and at the last minute before escrow was to close I am told that I have two liens on me that I had no knowledge of and told they must be taken care of before escrow can close. In researching the liens I find out that I don't owe them but I need time to submit the proof and go through the process of getting them released which will put the close of escrow on hold for an uncertain amount of time. The buyer I am dealing with has been a nightmare from day one and is uncooperative to work with me to allow me to go through the legal process of proving I don't owe them and have them released off me so we can close escrow. Instead they have been told by someone involved in this sale process (individual refusing to come forward) that I have the proceeds to just pay off the said judgements. So because they think I have the money they don't care whether I owe them or not and are threatening me and demanding that I just pay the judgements and close escrow by a certain date that they have specified and deal with trying to prove I don't owe the judgements and try to get my money back after the sale is complete and escrow closes or they are threatning to sue me and force me to sell the property to them and sue for monies added on top of it all. I have spoke to my trust attorney but he doesn't do real estate law but he recommended that we transfer the property into my LLC and sell the property from the LLC which would allow me to sell the property free and clear of any liens and close escrow and then go through the proper channels and practice my legal right to prove I don't owe the judgements and justly clear my record. Can I legally do this so I can sell the property to them free of any liens? And if they refuse to allow me to do the sell this way and want to force me to pay the judgements upfront and try to sue me then can I protect myself by filing chapter 7 bankruptcy?? Please Please Help Me..... I need advise and legal help now to protect myself and try to do the right thing all around. I don't want to be forced to pay 60K in judgements that I honestly don't owe and I am not trying to deny the buyer the house or purposely cause the delay of closing escrow. Had I known these liens where on me I would never have put the property up for sale and put my self in this situation. I would have handled the liens before and then sell the property. Please Please Help Me..
I have been told I need to agree to closeing escrow by the demanded date by end of today or I will be sued.
Melissa Kelemen
XXX-XXX-XXXX cell XXX@XXXXXX.XXX
Submitted: 11 months ago.
Category: Real Estate Law
Expert:  Richard replied 11 months ago.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good afternoon Melissa. You can close without paying off these liens. This happens quite often and it is not an insolvable situation. What the title company will do to allow you to close with a clean title to the buyer without paying the liens themselves under the duress of a pending closing is to allow you to put sufficient money from your closing proceeds in escrow to cover the liens. That will allow the title company to insure title without the existing liens and at the same time will protect the title company in the event you don't resolve the liens post closing. This solution results in the closing taking place as scheduled and allows you to resolve/settle these liens without being held hostage due to a closing. Then, after closing when you do get the liens resolved, the title company will release the escrowed funds to you.




Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service with 3, 4, or 5 faces/stars so I can receive credit for helping you today. I thank you in advance for taking the time to provide me a positive rating!
Customer: replied 11 months ago.


Not sure if you got my reply. I was told that escrow would not close until I either paid the liens in full or they were fully satisfied in order to remove them and allow close of escrow. How do I have escrow put aside only the monies to cover those said liens but release the rest of the proceeds of the sale of property at close of escrow and then have the set aside monies be kept in an escrow account to give me time to properly prove I don't owe them and then once proved have the monies released to me? Can I do this and how long will I have because I don't want to loose 60K when I have proof I don't owe it?


Melissa

Expert:  Richard replied 11 months ago.
Thanks so much for following up because I did not receive your follow up question. Tell the title company what you want to do...this happens all the time and the title company will agree to set up an escrow for the funds. The escrow period is usually about 180 days to give you sufficient time to resolve these liens without a gun being held to your held. Every title company deals with this kind of issue every day so this should not be a problem. Let the title company know that if they won't do this for you that you'll be switching title companies.
Customer: replied 11 months ago.

Thank you again for your advise. Here is more to my problem. We are now past the deadline escrow was to close and have now had to extend to time out twice. The buyer is being very aggressive and demanding that escrow close by the 13th or they will sue and force me to sell regardless of my situation and sue for additional monies and are trying to force me to reduce the purchase price of the house and claim that they have the legal right to force all of this and I have no choice but to submit to their demands. What option do I have if title will not agree to do what I am asking with putting aside separate monies in escrow and give me time so I don't have to lose so much money? If I come to this ugly scenario what is my legal option to protect myself from paying money I don't owe and protect my self from being forced to sell my property at a reduced price or even worse? Can I file chapter 7 bankruptcy and be protected from both situations or what can I do? I also have the option to transfer the property into my LLC and sell it from there without dealing with the lien problem right? Then we could just redo escrow and since everything is already done couldn't we just have a 10 day escrow and have this thing all done that way? That is if the buyer is willing to cooperate and do this right? or am I just screwed at this point? What is the best and fastest way to solve this making everyone happy?


Melissa

Expert:  Richard replied 11 months ago.
The other option is to call your insurance company and bond around the lien...which works pretty much like the escrow with the title company. The insurance company will issue a bond to the title insurance company allowing them to issue a clean title policy. The worst solution, but one that will allow the deal to close, is to simply pay the liens from the closing proceeds, and then file suit against the lienholders for not only the amount paid, but any damages you've suffered, including punitive damages due to their either gross negligence or intentional bad faith in failing to remove the liens.
Customer: replied 11 months ago.

Thank You Again... So I gather that transferring the property to my LLC and doing the sale that way is out of the question? Or Chapter 7 bankruptcy isn't an option if forced to pay up front? Which insurance company are you referring to the one placed on by escrow or my own personal home owners insurance?

Expert:  Richard replied 11 months ago.
Thanks for following up further on this. Yes, that won't work because the lien attaches to the property and will transfer with the transfer of title to your LLC. And, bankruptcy won't work because the lienholder will still be entitled to their lien until resolved. Call your insurance agent that issued your homeowner's policy and explain to them you want to bond around a lien. Or, ask the title company issuing title for a referral to an agent that has experience in writing coverage for this type of bond.
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 45520
Experience: 32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
Richard and 2 other Real Estate Law Specialists are ready to help you
Customer: replied 11 months ago.


Ok, I will take your advise and pray for it to work out as you described. Thank you very much for all of your advise and your guidance, you have been such a huge help and I appreciate it more than I can say. I will absolutely give you an excellent rating... Smile


 


Thanks again... Have a great night


Melissa

Expert:  Richard replied 11 months ago.
Thank you so much for the positive rating! I appreciate having had the opportunity to serve you! If I can be of assistance to you in the future, just look me up and I will be happy to help! For easy access, my bookmark is: http://www.justanswer.com/law/expert-legalbeacon/

I will absolutely keep you in my prayers....I know God's always got it!

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