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Code Enforcement Liens
As part of the process of performing its task as a “closing agent” on the purchase of a home, title companies should perform a “municipal lien search.”
A “municipal lien search” gives the closing agent information concerning open building permits, delinquent water and sewer amounts, and “code enforcement liens.”
“Code enforcement liens” are actual “liens” that attach to any and all property owned by that seller anywhere in the county where the lien is recorded. Generally, these liens are for violations of municipal ordinances with respect to the property for measures that the homeowner has not remedied after he/she has been notified and had an opportunity to be heard. While such liens may, in many instances, be reduced, this will require the homeowner or his representative to contact the town in which the lien arose to address the issue.
These liens must be resolved before a closing can occur in all cases where financing is used for the purchase.
In “all cash” deals, the buyer can waive resolving these issues; however, the title policy that will be issued with respect to the owner will not insure against any loss or expense resulting from the existence of these liens!