Tax Lien

[julez]

Illinois- a friend who owed me some money agreed to sign his home over to me by signing a quit claim deed. i refinanced the home in my name only and am now renting the home to a third party. we filed the quit claim deed in august and refinanced in october. i was recently told by my friend that there is a federal tax lien on the property (filed in december) due to the fact he owes back taxes. i was charged for a title search at the time of refinance. i am now ready to sell the home, and i have never officially been notified of the lien. how will this effect me and what do i need to do to get the lien removed?

 

[HomeGuru]

If the lien was recorded on title prior to you owning the property, the lien is stil on title and must be paid off at or before closing.

 

[julez]

thanks homeguru, but the lien was filed on the property 4 months after the quit claim deed was filed. timing is the key. the quit claim deed was notarized by the clerk at the court house on august 8th and the tax lien was received at the court house on december 4th. i have called the court house and they verified the information above, but were clueless on the steps i should take to have the liew removed. thanks for your help!

 

[HomeGuru]

Contact the title company and have them give you a new title report without the lien. You bought title insurance right?

 

[julez]

i did just that today and the title company is quite concerned! i explained the situation and they called me back right away to verify that the title was free and clear at the time of the search. in fact she verified that the title came back in my name (again, quit claim deed filed in august, financed in october) they also told me to contact them should any problems arise in the process of selling the home. i am not so concerned with the tilte company, it's the IRS that scares me! even though the lien has nothing to do with me, i am very concerned on the outcome of who will get the sales proceeds! thanks again for your help!

 

[HomeGuru]

The IRS has no valid lien rights against you or your property at the time the lien was recorded.
Follow my advice and don't wait until you have a Buyer and then scamble.