IfI bought a property with2 liens on it, is it the fault of the lawyer who was at closing?

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IfI bought a property with2 liens on it, is it the fault of the lawyer who was at closing?

Purchase was 2 years ago. Who was supposed to make sure that the banks released the liens? Now we can’t track down the banks, each lien has been bought and sold…Do we go through the BAR to express our displeasure with the way our lawyer performed? Should we ask for compensation for not doing their job properly? Now we aren’t able to refinance our new addition and interest rates are crippling my family’s finances. Also, if interest rates go up we will lose out on 10K-100k. Aren’t they responsible? Didn’t we hire them to make sure this type of thing wouldn’t happen? We have title insurance but not it’s helping.

Asked on July 19, 2011 under Real Estate Law, New Hampshire


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

To answer your question, what does the written purchase contract (assuming you have one) say about free and clear title to be given you where all prior liens and encumbrances would be paid off at close of escrow? Most written contracts require this unless the agreement specifically states to the contrary.

Did you have an escrow company handling the purchase? If you did, did you order a title insurance policy for the property to be bought? If you did, were the liens listed in the preliminary report and issued title policy? If so, and you had an established escrow, why did escrow close without the liens being removed from any title insurance policy you purchased.

If you did not get a title insurance policy for the property, you should have. It most likely would have shown the liens of record on the property before close of escrow so you could have decied to close or not. You mention you have title insurance. Is it for the property purchased? If so, were the liens listed in the preliminary report and title policy? If not, the title isurance policy has a problem.

If yes, then the escrow officer has a problem if the contract required removing all recorded liens of record before close and this was apparently not done.

Perhaps consulting with a good real estate lawyer on this issue will assist in getting the matter resolved to have the liens removed. It appears that the lienholders are not making claims to your property. However, their presence of record does create refinance problems for you.

Good luck.

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