Escrow & Title
A Maine closing attorney discovers a lien filed by a contractor three years ago that was never paid. Before closing, the attorney should:
AIgnore it if it appears minor
BRequire the lien to be satisfied (paid) or bonded over before transfer of clear title✓ Correct
COnly note it in the title commitment as an exception
DClose and rely on title insurance to cover it
Explanation
Before conveying clear title, existing liens must be satisfied, released, or bonded over. A closing attorney should ensure all liens are resolved before the seller transfers title to the buyer.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
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.
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