can you sell land with a lein against it?

Question

can the buyer in turn use the land for a loan of their own to purchase a home?

Answer 1

Yes but the buyer must pay the lein--as far as I understand it anyway

Answer 2

You can execute a contract to sell.

If the buyer is going to purchase title insurance, the lien MUST be paid off in order for the title company to issue the title insurance.

I have seen instances (in a cash deal) where the buyer did not want title insurance and knew about the lien. The agreement with the seller was that the buyer would pay the lien when the buyer sold the property. In this case, the buyer knew their interests were superseded by the lien.

Another potential problem is if the buyer is getting a mortgage. The lender will likely require a clear title search. When the lien appears, they will require the lien to be paid at closing.

In almost ALL cases, the buyer wants to get a title policy so they are protected from things like this. The title policy insures the buyer that they will be compensated by the title insurance company if something like this was not dealt with properly at closing.

Answer 3

Yes.

What happens next depends on the terms of that lien, and whether or not it was disclosed.

If it was not disclosed to the Buyer, and was not on the public record, what happens next is that the Buyer sues the Seller. This can happen with a Mechanic's Lien.

If it was on the public record but overlooked, the Buyer sues everybody else involved, including their own attorney.

If it was disclosed, generally the Buyer gets their sale price less the cost to clear the lien. Usually that means it will be paid off, but not in all cases.

In some cases, the new owner will take subject to that lien, and continue to make the required payments, if this is acceptable to the lienholder. Sometimes the mortgage has a "due on sale clause" so they won't get away with that for long.

If the lien is not paid off, the new owner can get additional financing. The new financing will either be junior in priority to the older lien, or they may require that the older lien be "subordinated" to the new one, but the prior lienholder is not required to subordinate, unless the original lien documents require it.

Anyway. Yes, but failure to disclose is not a good idea. Disclose.

Answer 4

You can. But the amount of the lien must be paid in full with the proceeds of the sale before you (the seller) get any money. If the sale of the property is not enough to cover the lien, you're SOL.

Answer 5

Yes, you can. Just make sure that the buyer knows of the lien... To protect yourself, I would have something in writing alogn the lines of "... buyer understand that there is such and such lien agains teh property..."
They then just buy it subject to that lien. Really, when someone buys a home by assuming a loan, that is just buying it with a lien, the lien in this case is the existing mortgage (deed or trust, here in NC)

-jose-

Answer 6

yes as long as your purchasing the first lien and paying the other leins for what they want, the leins other then first are not really intitled to the lein being the first lein covers them all, so if you want the others removed let them know your willing to pay them the lesser, or 1k to remove their 30k lein.. being that you would be the first lein holder after purchasing it then they would have to take the loss and get what they can...

Answer 7

Yes, but the lien will get paid first.

Answer 8

no