When you’re purchasing a home, it can be an exciting process. However, there are many things to look out for during the process, such as liens or hidden debt on the property you are planning to purchase. Here is where a municipal lien search comes into play, and why you need one.
What exactly is a municipal lien search?
A municipal lien search is a form of real estate search that uncovers unrecorded liens or debts on the property. This includes unpaid utility balances, unresolved code enforcement violations, and permitting issues. With a traditional title search, you only receive results from public records, and oftentimes these fees or debts are not recorded publicly and thus don’t appear on the title search. With a municipal lien search, you can uncover more information than your average title search, which provides you with a more thorough search of your property.
Why is this information important?
Full transparency is beneficial to you, as a municipal lien search lessens the risk of purchasing a property with multiple hidden title issues. Additionally, unpaid utilities, code enforcement violations, and permitting issues can result in massive financial exposure, and a prior owner’s property-related problems will attach to the property. In other words, the buyer will inherit these issues unknowingly, which can blindside you, especially if you are working with a set budget. Furthermore, per Sections 159 and 170 of Florida Statutes, the state does not require these issues to be recorded on public record. Although some municipalities do require it, so it is vital for any future homeowner to perform a municipal lien search regardless of the municipality to ensure that the property has been thoroughly investigated and all issues have been resolved before completing the purchase.
What are the different types of liens?
There are many types of liens that can be placed on a property, ranging from voluntary liens, like a mortgage, to involuntary liens, which represent monies due to a specific, related party. Here is a list of a few types of debts or fees that can be issued as a Florida municipal lien:
You must consider that some of these liens will be listed as unrecorded, which is why municipal lien searches are critical for any homebuyer. An unrecorded lien can be as simple as a permit left open by a contractor to a more complicated issue, such as unresolved code enforcement violations with unpaid fines.
Things to keep in mind when requesting a municipal lien search:
Municipal lien searches can be time intensive, as multiple calls must be made to multiple local firms and each municipality differs in turnaround times. This can become an issue quickly, as real estate is a very fast-paced industry in which deadlines are crucial. Some municipalities can take 15+ business days to complete a search. Here is a list of a few municipalities with their max turnaround times (please note that these are business days):
Please keep these timeframes in mind when establishing a closing date. If you must complete a rush closing and the closing date isn’t flexible, Elite Property Research offers pending reports. In some cases, we can obtain a portion of the information before the max turnaround time for certain municipalities, and what little bit of information we’ve gathered thus far is much better than completing a closing without any information. However, you should always reach out to all parties associated with the closing to discuss the risks of not having the completed search back in time for closing to avoid any setbacks. To ensure that you don't experience delays, a municipal lien search should be one of the very first things you should request after the seller accepts your offer.
Should you have any questions about municipal lien searches, feel free to reach out to us for more information.
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