Effect of prior liens on property

**knorth** · 06-06-2012, 05:48 PM

Hi, I am interested in buying a house in Philadelphia. However, I just learned that the previous owner, not current owner, had city lien for gas on another property prior to selling this house to current owner. Who is liable for this, does the lien apply to the house I am interested in.

EG. Jones gets a city lien against them for gas on Property X, they also own Property Z. Jones then sells Prop Z to Brown. I am interested in buying Prop Z from Brown. Brown did not get title insurance.

I would think the lien is only against Prop X and Jones, and that Prop Z is clear. I have heard conflicting answers. Any help would be uhh helpful. Thanks everyone in advance.

**loveisnoise** · 06-06-2012, 05:58 PM

Don't quite understand. As long as you get title insurance, you don't have to worry about any of this. Are you unable to get title insurance for some reason?

Originally Posted by knorth

Hi, I am interested in buying a house in Philadelphia. However, I just learned that the previous owner, not current owner, had city lien for gas on another property prior to selling this house to current owner. Who is liable for this, does the lien apply to the house I am interested in.

EG. Jones gets a city lien against them for gas on Property X, they also own Property Z. Jones then sells Prop Z to Brown. I am interested in buying Prop Z from Brown. Brown did not get title insurance.

I would think the lien is only against Prop X and Jones, and that Prop Z is clear. I have heard conflicting answers. Any help would be uhh helpful. Thanks everyone in advance.

**knorth** · 06-06-2012, 06:05 PM

The current owner did not get title insurance when they bought the property. So in my example its Brown who didnt get title insurance.

**byoak** · 06-06-2012, 11:37 PM

Brown is responsible since they did not get title insurance. If they did then their title insurer would be responsible.

**Hal** · 06-07-2012, 01:51 AM

Originally Posted by knorth

previous owner, not current owner, had city lien for gas on another property prior to selling this house to current owner.

Pennsylvania rules are that a common please court judgment against Jones binds all real estate that Jones owns in Philadelphia county at that time.
Most gas liens are filed in Common Pleas for this reason The rule is found at 42 Pa.C.S.A 4303. The legalese is extent of a lien of judgment.
There are some exceptions - e.g. in a pending divorce proceeding, creditors can't touch marital property.

The other terms of art are "ïn persona" and "in rem" and BFP, bona fide purchaser..
In persona means the judgment is against the person not their property - e.g. a restraining order or injunction.
In rem means the judgment follows the property. Basically, it means you can't sell your way out of the judgment.
BFP means a person who can purchase property and avoid the lien, because it was not disclosed by the seller and was not entered in the deeds or court records.

Hal

**Ray K.** · 06-07-2012, 06:45 AM

The fast answer is judgment liens attach to all real property owned by an individual at the time the judgment is entered. Such liens should be resolved when the property is transfered (clear title requires all liens to be resolved). However if such is not the case at the time of sale then the buyer is responsible for such liens (part of the fun of purchasing foreclosed property).

It is of course more nuanced than the above simple answer.

**StrangeTanks** · 06-07-2012, 08:48 AM

If I understand correctly, it won't affect you. There are a crazy number of other things you have to worry about however. For example, bail bonds and IRS taxes can be lienable.

Gas liens follow the property, not the owner. You don't have to worry about anything against the seller personally, just things that are against the property. I would definitely use a title company and have title insurance on any real estate transaction.

Worst case scenario is that the person selling you the property is not the actual owner. Sounds crazy but it happens many times every day in Philly.

**StrangeTanks** · 06-07-2012, 08:53 AM

Originally Posted by Ray K.

The fast answer is judgment liens attach to all real property owned by an individual at the time the judgment is entered. Such liens should be resolved when the property is transfered (clear title requires all liens to be resolved). However if such is not the case at the time of sale then the buyer is responsible for such liens (part of the fun of purchasing foreclosed property).

It is of course more nuanced than the above simple answer.

I don't know where your buying your foreclosed properties, but the sheriff's office guarantees clean title. Its the nature of how the foreclosure process works and why mortgages are given the terms "first position" "second position" ect. Its also why the sheriff's office comes out with a schedule of payoffs within 30 days of sheriff's sale.

**Ray K.** · 06-07-2012, 10:09 AM

Originally Posted by StrangeTanks

I don't know where your buying your foreclosed properties, but the sheriff's office guarantees clean title. Its the nature of how the foreclosure process works and why mortgages are given the terms "first position" "second position" ect. Its also why the sheriff's office comes out with a schedule of payoffs within 30 days of sheriff's sale.

I don't purchase - I defend against them. And no sheriff's office guarantee's clean title. Direct from the Buck's County Sheriff's Office "The property is not available for tour or inspection. The buyer gets the property “as is”, caveat emptor (let the buyer beware). The Sheriff’s Office does not have Information on liens or taxes." While junior judgment liens are terminated tax liens and the like survive. One should always get a title search prior to bidding at a sheriff sale.

**loveisnoise** · 06-07-2012, 04:22 PM

Wouldn't you agree that the simple answer is that if the lien were to go on the property, it would have already happened? If this is in Philly, PGW has the right to put a lien on the property with a simple piece of paperwork since they are a government entity. They don't even have to go to court.

Originally Posted by Ray K.

The fast answer is judgment liens attach to all real property owned by an individual at the time the judgment is entered. Such liens should be resolved when the property is transfered (clear title requires all liens to be resolved). However if such is not the case at the time of sale then the buyer is responsible for such liens (part of the fun of purchasing foreclosed property).

It is of course more nuanced than the above simple answer.

**sharkey** · 06-07-2012, 04:49 PM

Originally Posted by StrangeTanks

If I understand correctly, it won't affect you. There are a crazy number of other things you have to worry about however. For example, bail bonds and IRS taxes can be lienable.

Gas liens follow the property, not the owner. You don't have to worry about anything against the seller personally, just things that are against the property. I would definitely use a title company and have title insurance on any real estate transaction.

Worst case scenario is that the person selling you the property is not the actual owner. Sounds crazy but it happens many times every day in Philly.

Gas liens SHOULD be only on the property at which the gas was consumed BUT you can't assume competence on the part of PGW. I had PGW lien my property for a gas bill that a new tenant had incurred at his previous home. No one at their (dis)service center could resolve it. I have to check to see if it is still there and if so file suit against PGW.

**loveisnoise** · 06-07-2012, 04:55 PM

They initiated a transfer of service which allowed the balance to be transferred. Acceptable? No, I hate PGW methods-but it is legal since the scumbags wrote the law.

Originally Posted by sharkey

Gas liens SHOULD be only on the property at which the gas was consumed BUT you can't assume competence on the part of PGW. I had PGW lien my property for a gas bill that a new tenant had incurred at his previous home. No one at their (dis)service center could resolve it. I have to check to see if it is still there and if so file suit against PGW.

**ArcticSplash** · 06-08-2012, 07:29 AM

Originally Posted by sharkey

Gas liens SHOULD be only on the property at which the gas was consumed BUT you can't assume competence on the part of PGW. I had PGW lien my property for a gas bill that a new tenant had incurred at his previous home. No one at their (dis)service center could resolve it. I have to check to see if it is still there and if so file suit against PGW.

This.

PGW liens are like a sausage factory, they crank them out and blast them to CP after the 3 dunning default notices. If they confuse a tenant account as a real property account; dem's the brakes. sharkey w/o paying for a title search, who'd you hit up... the Prothonotary's office?

For the OP, one could demand a discount in the sale agreement to deduct the cost of the lien, and then the buyer pays the lien off. If the seller refuses, then walk. If you closed on the property--you're stuck with the lien, with the added risk that PGW could return to the court and request a preacipe for a writ of execution [taking the property to Sheriff's Sale]. PGW doesn't really go that far, since most financed buyers would have their purchase aborted by their mortgager when the lien turns up in the title search.

Philadelphia doesn't make lien discovery that easy; which is part of the reason why title searches cost a couple hundred bucks.