(MCT)—QUESTION: I have a contract to buy a foreclosed property and am ready to close. On the closing date, it was discovered that the home had an outstanding lien. The lender doesn’t want to pay the lien. What rights do I have? I know if I don’t close, I lose my deposit, but what is the bank responsible for here?
ANSWER: Good news. You should have no problem getting your deposit back in this case. As we have discussed before, in a transaction to purchase a property, the contract is king. So review your contract carefully to see what it says about this situation.
If your contract reads like most bank-owned sales contracts, it will be very one-sided in favor of the bank and allow the bank to cancel your transaction for just about any reason, with no repercussions. In your case, I would be willing to bet that the contract does require the bank to pass clear title to you, so it will need to either pay off the lien or cancel the contract. It most likely can’t make you pay the lien or accept the property with defective title.
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program.
This article is not intended to be legal advice. For legal advice, consult an attorney in your area.
©2011 the Sun Sentinel (Fort Lauderdale, Fla.)
Distributed by MCT Information Services.
