Escrow & Title
A Massachusetts property sold in 1995 has a $15,000 judgment lien against the seller recorded in 1993. The buyer discovers this at closing. The lien:
AIs automatically discharged upon the sale
BMust be paid off at closing or the buyer takes title subject to it✓ Correct
CDoes not affect title because it is more than 10 years old
DIs the seller's problem only and does not attach to the property
Explanation
A recorded judgment lien attaches to all real property of the debtor in the county. At closing, the lien must be discharged from the proceeds, or the buyer takes title subject to the encumbrance.
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Key Terms to Know
Encumbrance
Any claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA 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.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
Math Concepts
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