#731 in a series of true experiences in real estate
The title company said our client had a lien recorded against her. She would need to clear it up before she could sell her house. We asked what it was, maybe it was a mistake? Plus it was 40 years old! Where had it been for 40 years?
Our seller was completely surprised and dismayed. “How much is it for?” she asked. “What do I have to do?”
Most peculiarly, no dollar amount was stated. Not $1, not anything. We got a copy of the paperwork and sent it to our seller. The lien was open-ended, intended to pay for county medical services. Was she, by chance, in county hospital 40 years ago? Did she owe money to the county?
She said no. That was her name at the time and her correct social security number. She confirmed that she had lived at the given address many years before. But as far as she knew or could remember, although she had once been to a county clinic, she had never owed any money. She went only once, never returned, never received a bill.
Plus, in those 40 years, she’d sold a house, bought her current one, refinanced her loan, and this issue had never come up.
The title people emailed the county requesting a money demand or a release. But there was no response. They asked again. Our client asked us. The title company telephoned the county and left voice mails. Still nothing. The client was getting very anxious.
After about 2 weeks of this, Anet and I started calling the county. We left messages. One day I got an idea. I found on the Internet the name and phone number of the county collections supervisor. We left a very polite message for her stating the problem and asking for help. We pointed out that this lien would interfere with our client’s ability to sell her home. Wouldn’t someone please respond and help?
Unbeknownst to us, our client had waited long enough and she started calling the county herself on the same day we called the supervisor. She actually got through to a clerk who admitted that the title company requests had been sitting on her desk for many days because she did not know what to do with them. Records from 40 years before were on paper and dead-filed in a basement somewhere. She had no way to know anything about the lien, had never even heard of such a thing.
Meanwhile, our phone call paid off. We got a call back from a most agreeable person in collections who said that because they no longer had access to the records, why didn’t they just forget the whole thing? A dismissal of the lien was required, we explained, and would need to be recorded.
We talked to our seller, exchanged our telephone experiences, and arrangements were made. All was well. She sold her house and was able to deliver clear title to the buyer.
While we were going through this adventure I remembered a time many years ago when a buyer had a similar experience, also a lien against him from county medical collections. In that case, although the client had completely forgotten it, he had received medical services at the county hospital. He had no money then to pay and so a lien was recorded against him personally. When he was in contract to buy a house some years later, he had to pay the medical bill before the sale could close.
Another client of ours had a problem clearing title on her parents’ house after her parents had died. During the time we were preparing the house for marketing, we asked the title company for a preliminary title report. The report showed a $40,000 loan, a loan secured by the house.
The seller was surprised by this because although there were family stories about an aunt loaning money to her mother and dad, she thought the loan had been paid long ago. Unfortunately, everyone involved had died. No one could provide either a demand for any unpaid balance on the loan or a deed of reconveyance.
The title company asked if there were any records of payments, perhaps a payment book, anything that showed that the loan had been paid. The family painstakingly sorted and read through all the papers left behind. There were loan documents but nothing showing that the loan had been paid off.
Solution: Our client would post a bond. If someone should make a valid claim for that loan money, the bond would pay the claim. Our client had to apply for the bond and pay for it outside of escrow. Cost was about 10% of the original loan.
We marketed, a buyer was willing and able to buy, title was cleared and the house sold.
