Lien on property

Started by JayreC • 4 replies • 1597 views

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JayreC (Illinois)
Posts: 7

Posted:

Recently I've been trying to refinance our mortgage and just found out that a mechanic's lien was recorded couple months ago. Our home is one of the 9 that was completed and purchased in 2008. One of the subcontractors could not collect from the developer for some plumbing job and has finally put the lien on our subdivision. The developer seems to be in some financial trouble and has multiple lawsuits against him so I highly doubt that he'll take care of this.

In the meantime, the title company would not approve my loan until this lien is taken care of. Title company states that our HOA is responsible unless the developer miraculously takes care of it. I don't understand this and feel that this isn't right. Lien was put on old PINs that do not exist anymore as all 9 units have new PINs. How and whom do we dispute this with?

SusanW1 (Michigan)
Posts: 5,202

Posted:

Seems that the lien has been placed on the HOA, not on the "real" customer. You should look at the contract and see just WHO authorized the work. That will point to liability/responsible party.

JayreC (Illinois)
Posts: 7

Posted:

There is no contract between the owners/HOA and the contractors. These are all new homes purchased in 2008.

The developer hired a builder who hired subcontractors to complete the homes in our subdivision. Developer is not paying what he owes to the builder/sub-contractors so the lien was filed against the original PINs on the land (before the new homes were built) by the builder/subcontractor.

So do we dispute this with the county or the city?

SharonB6 (Pennsylvania)
Posts: 70

Posted:

In my development we have about 8 houses that have mechanic liens on them because our developer went bankrupt. A year and half later the developer still promises they will be back and remove the liens. I am not holding my breath on that.
Anyway one of my friends who has this lien tried to refinance their house and the lien was caught by the title check. Luckily for them the title company was able to talk the mortgage company into refinancing anyway. Perhaps you might be able to sweet talk the title company to convince the mortgage company that this is not your debt. You might even have a better chance because you said the HOA would be responsible not you. It can't hurt to try.

JayreC (Illinois)
Posts: 7

Posted:

Thanks Sharon. That sounds very similar to my situation. Yes I am currently in discussion with the title company.

With the loan aside, who will be responsible if the developer never takes care of the lien? Afterall I am part of the HOA.

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