How to purchase equipment that has an existing lien against it?
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How to purchase equipment that has an existing lien against it?
Seller has a piece of equipment for sale, called a “rig” with a lien against it. Buyer does not want to take the rig subject to the existing lien. Buyer wants to know if any other liens could affect purchase. The seller is in GA and the buyer is in VA. How could the buyer find out what liens are against the rig? What documents would buyer execute to get the rig free of the lien?
Asked on September 9, 2010 under Business Law, Virginia
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
If the equipment is something that is registered, check with the registering agency to see what other liens are held against the equipment. Liens on property like this may be tough to purchase in a clean and neat transaction and the lienholder may simply be able to prevent the sale but you need to find out exactly what sort of lien is on it. If it is a mechanic's lien, it will be in court records and you will need to do the proper research to find that lien either through a lawyer or through the court records. A buyer may not be able to negotiate directly with the lienholder and it might simply be the seller's responsibility to clear the lien before sale.
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