How To Use A Title Search To Check For Liens On A Property

The PropertyClub Team
Oct 4th 2020
Running a title search and checking for liens is a vital part of protecting yourself before buying a property. It will give you an overview of the house's history, so you can be sure you won't purchase a home with a lien on it.

When you’re looking at a potential new home for your family, there are a ton of things you probably already have been checking for—HVAC problems, foundational issues, roofing...Just to name a few. It’s only natural to worry about these things. After all, if you overlook them, you might end up having to deal with repairs sooner rather than later.

While it’s great to keep an eye on your future home’s structure, it’s also important to know that you need to keep an eye out for liens. A lien can turn a regular property into a major headache for any potential buyer. 

What Is A Title Search?

Before you buy any property it’s crucial to do a title search. A title search is a special search that gives you the full details on the title of your home. The search will show who the rightful owner is, if there’s a tax lien on your property, as well as any other information you need to be aware of. 

Performing a title search can also be useful if you’re renting a property and trying to verify its ownership. 

How Much Does A Property Title Search Cost?

The cost of a property title search depends on where you go, but if you have it performed by a title company, you will typically have to pay between $75 to $100. You can also do a property title search for free, on your own, but this is often time-consuming and may not be accepted by banks.

How To Find Out If There’s A Lien On A Property

A lien is a serious issue that shows that another person or party can hold a claim against a property. If your potential home has a lien, you probably won’t be able to find a lender willing to work with you. Here are some of the best ways to find out if there’s a lien on your property.

  • Look at the public record of the house online and in person. It may seem redundant, but you will find that the records can be quite different in some jurisdictions. 
  • Pay for a property title search. Professionally-done title searches are a must if you want to make sure that your home will be insurable. 
  • Befriend a title agent. A title agent will be able to run a title search for you. This is part of the closing costs that you will pay at your title agency.

Can You Do A Free Property Title Search?

Technically, you can perform a title search for free, as long as the municipality won’t charge you. It’ll be time-consuming, and you’ll have to go to the local public recorder's office to do so, but it can be done. Additionally, if you decide to do a title search yourself, your lender may not accept it, and may still require you to pay to have another one done.  

How To Do A Free Title Search

Here’s what you are going to need to do a free title search. 

  1. Check out your local county’s property appraiser site and look at the records on the house. Note the owner’s name, legal description, parcel number, and any other vital details that are noted.
  2. Go to the public recorder’s office and check the owner’s name and property for judgments, liens, or lis pendens. This will tell you if the house has been pinged in lawsuits in recent years. 
  3. Check for any liens filed against the owner’s other properties in recent years. A lien can affect all the person’s property, including the home. These don’t always show up on specific properties, especially if they are code violations, tax liens, or judgments. Doing this will make sure you have a totally clean title to the best of your knowledge.
  4. Take a look at all the transfers of title to make sure that the pattern is followed. Every transfer has to have matching names, addresses, dates, and details. Otherwise, you might still have a title that needs to be fixed before it can be fully insured. 

Are Liens On Public Property Record?

If you’re wondering whether you’ll see all the liens of a property on public record, you’re in for a surprise. Not all liens will show up on public property records. In fact, some might be downright impossible to find through typical means. 

Some states even have laws against publishing liens on public property records. These types of liens do not show up on record. This tends to make buyers assume that the seller is liable for the liens, but this is not true.

Even if the liens aren’t mentioned on public record, buyers who get the property will still be held liable for them in the court of law. This means that some liens could easily cause you to lose thousands or even millions of dollars.

What Type Of Liens Don’t Show Up On Record?

There are several categories of liens that will not show up on any types of publications. These are generally known as unrecorded liens. Unrecorded liens can include things like:

  • Building Code Charges- If the building had code violations like overgrown grass, a poorly-maintained yard, or a bad roof, then you might find some outstanding fees related to the city treating them as an unrecorded lien. 
  • Unresolved Municipal Fines- If the homeowner was fined as a result of unkempt lawns or building abandonment, you might also see this appear as a lien. 
  • Unpaid Utility Bills- People who don’t pay their utility bills may find themselves giving the next homeowner an ugly surprise in the form of a lien. This, however, varies from city to city.
  • Unresolved Assessment- Are there any open permits or unresolved fees from a property assessment? If so, you may have a lien on your hands.

Is There Any Way To Discover Unrecorded Liens?

Here’s the challenging part about unrecorded liens: they’re not recorded. So, going through the usual routes isn’t going to work well. There aren’t really any guaranteed ways to find out about liens aside from asking the current owner or asking groups that may have business to do with them. 

The issue is that your homeowner might not be legally obligated to mention any unrecorded liens that may be attached to your property. After all, if it’s unrecorded, it’s literally not in the records, and you can’t really do much with that in court. 

Does Title Insurance Protect Against Unrecorded Liens?

You might think that title insurance is there to protect you against surprise liens, and to a point, you’re right. However, this only really works with recorded liens. If you find yourself with an unrecorded lien on your title, you may have a struggle ahead of you.

Conclusion

If you are about to buy a home, make sure that you perform a title search (even a preliminary one!) before you start getting very serious about the offer. A beautiful property that’s filled to the brim with liens and other title problems isn’t as great a deal as it may first appear. 

Thankfully, most properties that hit the market aren’t going to have an issue with the title, nor are they going to have a problem with liens. So while you should be cautious, don’t panic and assume the worst.