Entrepreneur of the Week - Post # 5: Bondage and the Consequences.

#entrepreneurThis Week Post # 5: Bondage and the Consequences.
I spoke extensively this week about the importance of examining (registered and unlisted) liens on the property you intend to purchase. The reason I emphasize this issue is the consequences of not knowing and not handling the lien, which can result in enormous financial damage and even loss of property. And no matter the height of the bondage.
I'll give you an example of a case that came to my office a few years ago to illustrate the issue: an investor who bought himself a condominium in a prestigious Florida building for a considerable amount of money (several hundred thousand dollars). After buying, contact a local contractor for a small flooring. In the final work and due to a dispute between the parties on the nature of the work, the buyer did not pay the contractor the balance for the work. An amount of about $ 3000. Since this was a debt related to property improvement and renovation, according to Florida law, the contractor could file a lien claim of lien for the amount of the debt. Of course the customer did not know that, because a copy was sent to the apartment he purchased and he did not live there of course and no one bothered to hand him over. Time passed and the contractor filed a claim to exercise the lien. Neither did the prosecution report (how surprising), therefore, did not file a defense. The contractor, although an abuser, but according to this law was his full right, applied for a judgment in the absence of protection and also received (default final judgment) and even won the property. Upon completion of transferring the property to his name as part of the realization claim, he sold the property to a third party. My client found out that someone claimed ownership of the property when the same new owner who bought the property in good faith came to the building and asked to enter the apartment. The guard at the entrance called my client to tell him that someone unfamiliar claims to own his apartment !!?
And all because of a $ 3000 debt they were unaware of, were unaware of the process and how far the US law allows such things to happen.
That the client came to me the property was already owned by a third party who purchased in good faith and after conducting complex legal proceedings we were able to cancel the entire process including the sale and return the client to the property. Not an obvious thing.
This example illustrates how powerful these liens are and how critical it is to make sure that your property is not being mortgaged and if it is discovered that any liens need to be removed before or during closing when it is clear that the Teitel is paying off the debt and is typing an annulment and removal of the lien from your property.

Know that debts that look small and maybe awful that you are late in payment (such as monthly HOA fees, debt to the contractor, etc.) can very quickly and without your knowledge turn into a lien that will settle on the property and may even lose its ownership.

In this regard and to avoid the lack of knowledge, it is very important that if you invest as a company, make sure that your address for up-to-date and correct mailing is also available on the Registrar of Companies, also the District Appraiser and any relevant official institution or office.
It is also very important that your company's registered agent is always up-to-date and even in touch with him that formal documents such as lawsuits are delivered to the registered agent if they fail to deliver to the property owner. In most cases, these are foreign investors whose property is not their residence, their management companies do not necessarily handle the issue and this is how things turn into a situation that may be irreversible.
Successfully!!

Link to the original post in the United States Real Estate Forum on Facebook - Works on a desktop computer (To view the post must be members approved for the forum)

The original responses to the post can be read at the bottom of the current post page on the site or in the link to a post on Facebook and of course you are invited to join the discussion

• Wow, what a story! good to know! Thanks!
• Itay KalevLior Gita is very important. Read !!
• What a story! Thank you
  Yafit Levin is very important
• Thanks for the post… very important
• Thanks Keren. An important story.
  I did not understand how your client could have known that behind his back his property was transferred to the contractor's name?
• It is important! I learned
• Thanks so much Karen! What is your recommendation that such things do not happen except to update the relevant offices at a recent postal address?
• Thanks
• Champion Karen Thank you for the fun information that you have here
• Where do you check such debts? In the province?