If a lien showed up after we purchased a home and the seller and title company won’t pay for it, what can we do?

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If a lien showed up after we purchased a home and the seller and title company won’t pay for it, what can we do?

We purchased a house last year, when we got our tax bill it had a $4000 debt from the previous owner that was never disclosed to us. Title insurance refuses to pay claiming it’s not covered. The seller refuses to pay claiming it’s the city who should reverse the charges for not recording it before the sale date. We are now stuck with this debt and don’t know what to do. I don’t think we should be held liable for a debt that is not ours.

Asked on February 15, 2011 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Get a real estate attorney--now. To begin with, it would seem that title insurance *should* pay--that's what you get title insurance for. They insure you against any title defects they miss in the title search, etc. You may be able to force the title insurance company to pay off or otherwise take action to eliminate this lien, but be prepared that you may need to sue them to do this. Or you may also have recourse against the former owner, on grounds of a material omission or misrepresentation--i.e. that this is something that needed to be disclosed. So you should have recourse against one, possibly two parties, but it will probably take legal action to see that recourse; that is why you should contact a real estate attorney immediately, to get the compensation to which you are entitled and clear up the lien.


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