When engaging in real estate transactions, conducting a Florida lien search is crucial. This search identifies hidden liabilities, such as unpaid utilities, code violations, and open or expired permits, that can delay closings or lead to unexpected costs for new homeowners.
That’s why Real Res has collected some information on why this step is so crucial and how to address potential issues.
What Is a Full Municipal Lien Search?
A full municipal lien search is an in-depth investigation that uncovers any existing liens, code violations, or unpaid fees related to a property. It goes beyond a traditional title search, which focuses on ownership and mortgage liens, by revealing financial obligations to local governments. This search includes items like:
- Outstanding Utility Balances: Unpaid water bills can become liens, and utility services may be cut off until these balances are settled. Additionally, a new homeowner may not be able to turn water services on if an outstanding balance exists.
- Code Violations: These can range from minor infractions like overgrown lawns to major structural issues, all of which may lead to fines or legal action if not resolved.
- Expired or Open Permits: This includes work that has not passed a final inspection or permits that expired before completion. Unresolved permits can delay renovations and create legal liabilities for the new owner.
- Special Assessments: Local governments may impose assessments for public improvements like roads or sewers, and failure to pay can result in a lien.
Does Title Insurance Cover Open or Expired Permits?
No, title insurance does not cover open or expired permits. While a title search will reveal any financial liens on the property, it won’t show permit-related issues. To uncover these, a full municipal lien search is required. Without this step, new homeowners could face unexpected costs or delays if there are unresolved permits.
The Risks of Open or Expired Permits
If a property has open or expired permits, the buyer may encounter several risks:
- Increased Costs: If building codes have changed since the permit was issued, new contractors may need to bring the work up to current standards, leading to additional expenses.
- Project Delays: When selling a home, unresolved permits can cause delays, especially if a final inspection is required before the sale can proceed. In some cases, the original contractor may be out of business or unwilling to finish the job.
- Legal Liability: A mechanic’s lien can be placed on the property if contractors or suppliers are not paid. New owners could face lawsuits over debts they did not incur.
Resolving Permit Problems
Resolving open or expired permits can be complicated, but new laws in Florida have made the process easier. Homeowners are now notified 30 days before a permit expires, and they can hire a new contractor to close out expired permits without being held liable for previous work. Municipalities also have the authority to administratively close permits that are more than six years old, provided no safety hazards are present.
Contact us for a Florida lien search today!
By conducting a full municipal lien search, you can identify and address these issues before closing, protecting both your investment and your peace of mind. Real Res offers fast, accurate lien searches in Florida, helping buyers and title agents navigate these challenges with ease.
Contact us online today or call (877) 543-6669.