Buying a house with a lien on it

**samakita** · 10-26-2010, 08:02 PM

Hi

We have just purchased a house on the outskirts of Toronto. Everything is good to go and we have our closing date of October 29th (3 days from now). We had a phonecall this evening from our realtor who told us that we may not be able to close on Friday as there is a lien on the house we are buying. We have no idea what to do at this point. Where do we stand? We have arranged a moving company and have no where to live after Friday. We don't know where to go from here. How can these people not inform us of this lien? It was our lawyer found it. Then their lawyer called them, then they called their realtor who in turn called us. We haven't even spoken to our lawyer yet as it was the end of the day. Our realtor was just giving us a heads up.

More advice is needed please and thanks!

**Greg** · 10-27-2010, 06:39 AM

If your attorney had done the preliminary title work when you first went under contract this lien would have been discovered before all the dominoes got lined up. Hopefully there are enough proceeds to cover the debt.

**urleandy** · 10-29-2010, 05:59 PM

Were you able to get your money back???
That's too bad.

Any property that carries a lien can be forced into sale by the lender, in order to collect what is owed, if the loan is in default. If the borrower decides to sell the property, the lien holder must be paid before the title will be cleared for transfer to the buyer.

**agentsranking** · 11-06-2010, 09:37 PM

You should be thankful that the lien was discovered before the closing. If the lien hadn't been discovered and you closed, you would have had a potential title issue that could have been very costly if you hadn't purchased title insurance. Hopefully, the seller was walking away from the sale with some proceeds and those proceeds are enough to cover the lien. If not, they should try and negotiate a discounted payoff or have them sign a new note with the lien holder but get the lien removed from the property.

**arenee** · 12-01-2010, 07:57 PM

generally it is the broker's responsibility to disclose any liens on a property. this disclosure should be made before the property is being closed upon.