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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Real Estate Law
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Can a Hawaii property sold at foreclosure auction because of

Customer Question

Can a Hawaii property sold at foreclosure auction because of bankruptcy close escrow with an existing lien from Hawaii ecise tax department?
Submitted: 11 months ago.
Category: Real Estate Law
Expert:  Lucy, Esq. replied 11 months ago.


I'm Lucy, and I'd be happy to answer your questions today.

Yes it can, and that's actually not terribly uncommon. Liens on real estate are given a priority when they're filed. Tax liens take priority over other types of liens, including a first mortgage. Hawaii Stat., Section 246-55. When a property is foreclosed, the procedure wipes out the lien being foreclosed and all lesser liens - meaning those filed after the one in question, in most cases. However, superior liens remain attached to the property if they're not paid. Whoever purchases the property at the foreclosure sale is taking it subject to those priority liens, and the property could be foreclosed and sold again.

A tax lien in Hawaii is good for six years, so if it's been longer than that, a local real estate attorney might be able to help you get the lien removed. If it hasn't, then you're bidding on the property as-is and accepting it with the lien if you win.

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Expert:  Lucy, Esq. replied 11 months ago.

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