Escrow & Title
What is a 'mechanic's lien' and when might it arise in a Hawaii real estate transaction?
AA. A lien for unpaid property taxes
BB. A lien filed by contractors, subcontractors, or suppliers who have not been paid for work or materials on the property✓ Correct
CC. A lien placed by the HOA for unpaid dues
DD. A court judgment lien for personal injury on the property
Explanation
A mechanic's lien (materialman's lien) allows contractors, subcontractors, and material suppliers who have not been paid for work or materials on a property to place a lien on that property. In Hawaii, title searches and title insurance are important to detect and eliminate such liens before closing.
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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.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
State-Specific Concepts
Mechanic's Lien
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