Escrow & Title
A North Dakota title search reveals a judgment lien against the seller. How does this affect closing?
AThe judgment lien transfers to the buyer automatically
BThe judgment lien must be paid or released before clear title can be conveyed✓ Correct
CThe title company ignores liens under $10,000
DOnly mortgage liens must be cleared at closing
Explanation
A judgment lien is a cloud on title. Before clear title can be conveyed to the buyer, all liens including judgment liens must be satisfied (paid off) or formally released.
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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.
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.
Math Concepts
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