Thursday, July 26, 2007

query: can you get title insurance if there is a pending lien on the property

Yes. Depending on the nature of the pending lien, it may be covered by the insurance or be an exception. Talk with your title insurer and they can give you a specific opinion.

Here are a couple of examples.

Let's say there is a pending law suit, not an action in equity, in which no judgment has been entered. If we record the deed prior to the filing of a judgment, the judgment has no impact on title and your title insurance policy won't contain an exception for that item.

Now, let's consider the action in equity. This type of pending law suit specifically involves the real property and the plaintiff files a lis pendens to give the public notice. In this case, the lis pendens or public notice takes priority and even though the matter hasn't yet been reduced to a judgment, we would have to postpone the closing or put an exception into the title insurance policy.

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