Escrow & Title
A Minnesota property has a purchase agreement requiring a 45-day closing. During this period, the buyer discovers a judgment lien filed against the seller just after the purchase agreement was signed. The buyer should:
AClose immediately before more liens are filed
BRequire the lien to be paid and released before closing proceeds✓ Correct
CAccept the property subject to the lien
DCancel the contract due to the newly discovered lien
Explanation
A judgment lien filed after the purchase agreement is signed is still the seller's obligation to clear before providing clear title. The seller must pay the judgment or obtain a release before or at closing. The buyer (and their lender) are entitled to receive clear title free of encumbrances not disclosed in the purchase agreement. This is a routine but important title clearance issue.
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