When selling a house with liens in Jacksonville FL you may have a lot of questions and concerns. When a lien is attached to a house, the property is now encumbered by that property lien and must be resolved prior to sale.
There are various reasons why a lien can be attached to a property, and there are different types of liens as well. We will cover each and explain them below. It’s crucial you know exactly what type of property lien you are dealing with. Then you will know the best way to resolve it according to Florida statute.
If you’re trying to sell your Jacksonville home fast, this will be necessary.
Evaluating the Liens in Jacksonville: What are the different types of property liens?
Judgment Lien: A judgment lien is filed by unsecured creditors against a delinquent borrower. This could include credit card debt, personal loans, or even medical bills. A lawsuit must be filed and then won by the creditor to obtain lien rights.
Some circumstances may allow judgment liens to be attached to the real estate of the property owner, or even personal property. If your house has a lien attached, it must be satisfied prior to the sale being finalized. How will anyone know about this or other liens? The title company will run a search, and assuming the lien holder properly filed these will show up and “cloud” the title, hindering the sale.
Property Tax Lien: Commonly called a tax lien, this type is placed against a piece of property following prolonged and delinquent taxes. For example, if a homeowner does not pay their taxes, the back taxes will eventually result in a tax lien on the house.
Florida statute provides the state a legal avenue to pursue action in order to collect this unpaid money. This happens through a tax lien certificate sale. Private investors will purchase a tax lien certificate in order to earn interest on the delinquent taxes owed. If the homeowner avoids paying the property tax lien, it will accrue interest.
If the homeowner still does not pay the taxes or tax lien, their property will eventually go up for sale at a tax deed auction. The tax deed will be auctioned off to the public, and any money from the sale will go to pay off the delinquent property taxes owed.
IRS Liens: An IRS lien can be placed against a person or property that owes back income taxes that have not been paid to the government. To satisfy the debt, the IRS can attempt to garnish your wages and receive a portion of your paycheck each time you are paid. However, if you owe a substantial amount the IRS may elect to force the sale of your property instead. You can read more about IRS liens, here.
Child Support Liens: A child support lien can be placed against the property if you fail to pay your necessary child support payments. This is not common but can be pursued by a circuit court. Similar to the IRS, this comes into play when substantial amounts are owed. The state of Florida can file a variety of liens for child support, so read about the details here.
Mechanic’s Liens: A mechanic’s lien is the most common type of lien that we see when buying Jacksonville homes. It can be placed by a contractor or worker who has completed work for the homeowner but has not been paid for their services. They can place a mechanic’s lien against your property for the amount of work they are owed.
In Florida, they must record the lien within 90 days of not being paid, and file suit for the lien to be enforced. If they win the lawsuit, they may be able to force the sale of your property. Most contractors will not force the sale of a home and instead wait to be paid upon a future sale.
You might think it’s too much work for a contractor to file a notice or pursue a lien, but new services like Handle that allow online filing makes this easier for them. For this reason, more Jacksonville homes are encumbered by mechanic’s liens than in times past.
Nuisance Liens: These liens are placed against a property by neighboring homeowners after continuous disruption in the neighborhood. This may seem a bit vague at first. After all, what counts as disruption? According to the city of Jacksonville, nuisance liens can be placed against a property for things like abandoned vehicles, broken windows, garbage or other debris laying around, or tall, overgrown grass. These liens can be abated and reduced by agreeing with the city that you will resolve the issues.
Demolition Liens: This lien is placed by the city on a vacant piece of land where a building once stood. The structure would’ve been demolished by the city due to it being condemned and deemed unsafe to enter. More often than not, there are usually a large number of nuisance liens from the previous property attached against a land lot that has a demolition lien attached. There are plenty of hearings and notices prior to this taking place.
Selling the House: Options for Resolving an Outstanding Lien
Regardless of the type of outstanding lien filed against the property, it must be resolved in order to sell the property. Here are some ways you can do this.
Paying off the liens yourself: This is an option depending on the amount of money and type of liens attached. Doing this will allow for the sale of the property to go through as long as proof was properly filed. When a title search is run on the property, the lien will longer appear. However, due to the high costs to resolve liens, most homeowners choose to simply sell the property with the liens attached. It is difficult to sell a property with liens through a traditional real estate agent, but companies like ours buy properties with liens on them
Selling the property with liens attached: While a property with liens attached can technically be sold, the liens become the responsibility of the new homeowners. (Or included in their closing costs.) This is not attractive to traditional buyers. Most buyers will require that liens will be paid before the property is sold. If your goal is to sell the house while liens are attached, you will need to work with a real estate investor or a company that buys Jacksonville properties for cash.
Sometimes, the number of liens attached can be worth more than the property’s value, which makes closing the sale almost impossible. We can do a title search for you and provide a quick assessment of what you owe versus what your house is worth to help you evaluate your selling options.
Final Thoughts About Selling a Home with Property Liens
Having liens attached to your property can be very stressful as you approach a sale. Sometimes issues like this are known well in advance. But other times they arise after inheriting a home and trying to sell during probate. It can be overwhelming trying to find out what each type of lien is, and what your options are. We hope this article has given you a better understanding of property liens, and what your options are when it comes time to sell your house.
Resolve Liens Yourself:
As we have detailed above, there are two routes you can take when dealing with liens attached to your property. You can pay off the liens yourself, which alleviates the stress of creditors and others chasing you for past due payments. It also allows you to sell the property without raising any issues on the title search and takes the weight of responsibility off the future buyer.
Let Us Pay Off Your Liens and Buy Your House:
Many Jacksonville homeowners are unable to pay off property liens before selling. Instead, you can contact us and we will conduct a title search on the property to determine how much is currently owed. Next, we will evaluate how much your home is worth, taking other factors into consideration as well such as repairs that might be needed. Deferred maintenance doesn’t bother us either. We are used to buying homes in Jacksonville in as-is condition.
Last, we will make you a cash offer on your house. If our cash offer is acceptable to you, we will then pay off any liens as part of the purchase and close fast. You will be able to move on without any of these past due balances that were attached to the house following you.
Get a no-obligation evaluation at no cost to you. Reach out to us by phone or via our form today.