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When is a lien not a lien?
by CHARLENE PERRY | 2014/08/28 |

When the County can't provide a valid legal argument for it's collection!


Almost every jurisdiction in Maryland requires that title agents, or anyone else wishing to record a Deed, must acquire a lien certificate from the jurisdiction which references any liens against the property filed by the county in which the property is located.  This document also verifies whether open real estate taxes and open water bills are paid.


In the instance case, a lien certificate was acquired from the jurisdiction in which the property is located. The lien certificate reflected open real estate taxes AND a State tax lien in excess of $25K! 

The seller had no knowledge of any open State liens having been filed that would in any way attach to their personal home.  The lien in question was related the non payment of personal property taxes that had been assessed to Mr. Seller's defunct business.

  • The property in question was held by husband and wife as tenants by the entireties
  • The "lien" was filed against the LLC that had been owned by husband only.
  • The LLC was forfeited and no longer doing business 

When we took this issue up with the County and inquired as to how they came to put this lien against the personal home of the parties, we were told that they always put these type liens on the lien certificate and that the lien was valid; and then the attorneys got involved..

The seller's attorney searched for a relevant statute that would allow the County to "pop" this lien against his personal home but was unable to find any relevant State or local rule, statute, etc.  Seller's attorney then asked the County Attorney to provide the relevant statute that enabled the county to attach this lien to the personal home of the sellers.   County attorney was unable to provide any statute to justify the collection. 

At the end of discussions the County attorney admitted that they often put these type liens on the "lien certificate"  and that very few ever question the lien and so the County (or State as the case may be) ends up getting payment when the property transfers. 

At the end of the day the County removed the "lien" from the property and the Deed was able to be recorded without the payment of the 25K.  Had we not inquired about the validity of the lien in the first place, this payment would have been made, the sellers would have been none the wiser about the validity of the placement of the lien against their personal home and the County/State would have used us (the title company) as a debt collector for a lien that did not apply to the transaction. 

It's going that extra step that sometimes makes all the difference to the parties in your transaction.  Take the time to question things if it just doesn't look or feel right to you.  Using your years of experience, your knowledge and your network of professionals to work through a problem make you stand out in the crowd of thousands of title agencies vying for everyone's business.  









721 words | 4239 views | 1 comments | log in or register to post a comment

Nice try!
I don't blame them for trying to collect, but that is one of the reasons that one incorporates, as a form of protecting personal assets from business losses.   
by Teresa Wright | 2014/09/09 | log in or register to post a reply



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