Liens, Liens, Liens – Which Ones You Can Spot, and Which Ones You Can’t!
It may not happen often, but when it does it can pose closing challenges that can be insurmountable. What are we talking about? Liens!
An unanticipated lien can kill a deal if the homeowner doesn’t have the means to resolve it. The sooner you uncover liens, the better. Once the ball starts rolling on a deal, so much time and expense is expended for all that a solution to quickly uncover liens is paramount for any real estate sales professionals.
Now – there is no magic bullet for liens as there are some liens you can learn about through a simple search and some you can’t! For example:
Construction – if someone has had or is having work done on a property or is building a home a construction lien could exist without it appearing on a Parcel Register*.
Unpaid property taxes – this is a huge one because all taxes must be paid before the property title will be transferred. While a lien may not be formerly registered on title, unpaid property taxes could exist, will be uncovered on closing, and could therefore sabotage a deal.
Condo fee arrears. Like property taxes, if your client has fallen behind on their payments to condo fees, a lien may not be registered but upon the lawyer receiving a status certificate, unpaid condo fees will be uncovered and will have to be paid on closing.
Other liens that will appear on the Parcel Register* include:
- Unpaid tax debts/debts to the government
- Liens registered through the court once a creditor has obtained a judgement
- Condo liens – once registered
- Property tax liens – once registered
You can greatly mitigate a lien going undetected by performing some basic diligence.
Checking the Parcel Register* will uncover most liens. If a lien comes up and you need to communicate more details on the lien to your client you can go a step further and look at the instrument image associated to the registration number of the lien. The instrument image will reveal more details about the lien, such as the contact information of the registrant.
Where condo owners are concerned – we have come a long way since the days of the 10 day condo certificate process. While some condo certificates do still take time to obtain, the process to get them is far simpler. You can now request a condo certificate online and receive it electronically – vs waiting to have that mammoth 100+ page document delivered to you.
Property taxes – you can handle this 1 of 2 ways. You can ask your client to provide you with their most recent property tax statement or you can request one from the tax office directly. Now requesting it from the tax office may include a fee so you may just want to mandate that on all new listings one of the required documents that your client provide be their tax statement.
Taking these simple steps can help you root out more liens and allow your client to address any issues before an offer is extended. Don’t let anything impact a closing.
For more about any of these documents or how to obtain them, please visit www.geowarehouse.ca today.
*An official product of the Ontario government pursuant to provincial land registration statutes.