Escrow & Title
A Connecticut property buyer receives a title with a 'clouds' from a prior unresolved mechanic's lien. What is the most common remedy?
ASimply proceed with the sale and ignore the lien
BRequire the seller to pay off the lien or bond around it before or at closing✓ Correct
CFile a fair housing complaint
DAsk the lender to waive the lien
Explanation
A mechanic's lien clouds title. The seller should satisfy (pay off) the lien before or at closing (from sale proceeds), or the parties can agree to post a bond in lieu of payment to clear the title for the buyer.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
State-Specific Concepts
Mechanic's Lien
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