Hello, this is Dave at TitleSearch.com, and if you’re investing your time in searching for liens on real estate, you undoubtedly want to uncover not only the obvious ones but also those hidden liens that could potentially impact your investment. In this blog post, we’ll delve into the eight most common types of hidden liens, shedding light on the crucial aspects every real estate investor should consider.
1. UCC Filings (Universal Commercial Code)
UCC filings, often related to personal property, may not be found in county land records. Instead, they are typically housed at the Secretary of State’s office. These filings can encumber personal property and also affect real property where business fixtures are attached.
2. Mechanic’s Liens
Mechanic’s liens arise when a contractor or builder performs work on a property, and if unpaid, they have a statutory lien on the property. Unlike traditional liens, these may not be filed in land records, making them crucial to investigate.
3. Civil Court Records
Beyond the standard land records, civil court records, including small claims and superior courts, might reveal judgments against the property owner. Such judgments automatically attach to the property by statute.
4. Probate Records
Transfers of property due to events like death, divorce, or other family matters can impact property and result in liens. It’s essential to check probate records for potential encumbrances.
5. Delinquent Taxes
While delinquent taxes may not be an immediate lien, they become the responsibility of the new property owner. Ensure you check the tax assessor’s office for any overdue taxes that may impact your investment.
6. Special Assessments
Hidden liens can emerge in the form of special assessments for improvements such as utilities or roadwork. It’s crucial to investigate if there are any upcoming special assessments that could affect the property.
7. HOA Underfunding
For properties within homeowner associations or condo complexes, underfunding of the HOA can act as a de facto lien. Unbudgeted obligations, like roof repairs or pool maintenance, can become the financial responsibility of the property owner.
Easements may not always be apparent in traditional documents like liens, mortgages, or deeds. These agreements can grant adjacent property owners access or financial benefits from the property, making it vital to explore easement records thoroughly.
Conducting a Comprehensive Title Search
When conducting a title search, it’s crucial to explore all relevant areas thoroughly. Hidden liens can be unexpected surprises for property owners, potentially impacting the investment’s value. By being diligent and comprehensive, you can mitigate the risks associated with hidden encumbrances.
Connect with Us for Expert Assistance
If you have further questions or need expert assistance in navigating real estate titles and hidden liens, feel free to reach out to us at TitleSearch.com. Our team is here to help you make informed and secure real estate investments.