I bought a property with a Lien on it, condition on the contract is lien pay off before closing, Title company didn’t pay off the full lien, who is liable?

UPDATED: Oct 2, 2022

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I bought a property with a Lien on it, condition on the contract is lien pay off before closing, Title company didn’t pay off the full lien, who is liable?

I bought a house that the previous owner took a Hero loan against which imposed a tax lien. The debt was being paid through a special assessment on the tax bill. When I bought the house, agreement in the contract is to pay off the lien before closing. The title company requested a lien pay off amount which is the amount they paid to lender but they missed a payment that was already on the current tax bill, therefore a portion of the lien went unpaid and now it is on my tax bill but it is still part of the lien that seller agreed on contract to pay it off at closing. Is the title company held liable to execute the contract based on conditions and in this case pay off the lien whether to the lien holder or through that last tax bill?

Asked on October 28, 2019 under Real Estate Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

The title company is not liable or obligated under a contract between you and the seller: a contract and its obligations (such as to pay off a lien) is only binding on the parties to the contract. If one payment was due and should have been made but was not, you would have to seek the money (such as by suing, if necessary) from the seller, since it is the seller who was obligated under the contract.

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