Liens that do not show up until after closing

[Steve Wilcox]

I have a property in a tough area under contract, and my attorney has told me that occasionally liens on the property may not show up for 3-6 months after the close of the property, which would leave me (or my llc) responsible for said lien.

I would think that this would be the purpose of title insurance and that this would be covered in the title policy, however my attorney is unsure that they can guarantee things after we have closed

I am waiting on the title co to confirm that any liens that pop up would in fact be covered by their title insurance, but I wanted to hear if any other investors have heard of this or had any experience with these issues

I am planning on buying, rehabbing, renting out, and refinancing. I need to be able to refi to pull cash out for the deal to be worth while. Also do not want to get stuck with someone else debts

[Tom Goans]

Steve Wilcox,

My first thought, seek the opinion from different attorney at a different law firm.

My second thought agrees with yours. The title policy lists Exceptions. Read every page and every word to see if they weasel out of any other coverage, including liens.

Based upon my experience and training, if the lien is not of public record the day the property is legally transferred, the lien is not enforceable.

This is an excellent question and situation. Thank you for posting it so we all can learn.

Best of luck. And kudos for being alert.