Are mechanic’s liens still owed when buying a house that was foreclosed upon?
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Are mechanic’s liens still owed when buying a house that was foreclosed upon?
My brother bought a house almost 5 years ago and I bought it from him recently via quitclaim deed. He bought it from a foreclosure from the city due to unpaid taxes. there are supposedly two liens one being the mortgage company GMAC and one from a window and siding company due to unpaid work they had done. Am I still responsible for the payment to the lien holders or is that dissolved when the house is foreclosed upon? I also believed the mechanic’s lien was filed after notice of the foreclosure.
Asked on September 25, 2010 under Real Estate Law, Maine
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
You need to go back and do a title search. First and foremost, who foreclosed on the property? If the entity who foreclosed had a lien on the home, the lien is usually released once the foreclosure occurs by that individual. If another lien remains, the purchaser did not purchase the property with full warranties and may have purchased it without clear title. If so, was a title search done prior to closing? These are just some of the questions that need to be answered. Then, purchasing a property via quit claim deed simply means you are buying whatever rights the seller had. If the seller had none or had clouded title, you may be in a position to undue the sale. This also depends on whether you knew of the liens prior to purchase (i.e. did title search and it did not show up). If you didn't, an argument could be made that any liens were extinguished when you purchased the property.
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