Tax Lien on Property. Please help.

Asked by sakuraying, 12159 Mon Aug 19, 2013

A week before closing, we found out there is a state tax lien on Person A's property for the previous owner Person B.
To make this more complicated, Person A's Title Company is bankrupt several years ago.
Question is: What should we do now?
If someone need to pay it off, who should? Person A, B or me?

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Michael Rich…, Agent, NY,
Mon Aug 19, 2013

Your seller's title company may be out of business, but that does not mean there title insurance is invalid. Your attorney needs to work with the seller's attorney to find out which company took over the defunct company's files. It also needs to be determined when the tax lien was filed against the property. If it was filed after it was sold, then your title insurance company should be willing to insure you against the tax lien. If it was filed while the person still owned the property, then your title insurance company will get a clearance letter from the company that is currently responsible for the seller's insurance.

Michael Richman
Licensed Real Estate Associate Broker
KIAN Realty
450 7th Avenue Suite 1501
New York, NY 10123
212-757-8268 x220
0 votes
Thanks for the reply!
Flag Mon Aug 19, 2013
Victoria Rom…, Agent, Clifton Park, NY
Mon Aug 19, 2013
Hi Sakuraying,

What everyone else is saying is spot on-- the title insurance purchased by Purchase A should cover the lien, even if the title company is out of business. This is an issue for your attorney though. They should be handling the research to find out how they can get the lien paid off. It shouldn't be falling on you.

0 votes
Thanks for the quick reply.
Flag Mon Aug 19, 2013
Bob Meyerson, Agent, Mamaroneck, NY
Mon Aug 19, 2013
The assets of person A title company had to have been picked up by another title company. Do some more investigation. To make the deal go through you might want to pay the lien but I would do a lot more investigation before I would pay someones bill.
0 votes
Thomas Moser, Agent, East Northport, NY
Mon Aug 19, 2013
It is the current seller's problem. You are not responsible for this.
0 votes
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