If a title company missed a IRS tax lien on a sale are they responsible for paying the IRS?
It depends on what you mean by that.
The title insurance protects the buyer against any liens against the property. The title insurance company is not necessarily responsible for paying the debt. The title insurance company IS responsible for having the lien removed from the property.
If it's YOUR debt to the IRS, and you were the seller, you can expect the IRS to come after you again, and possibly attach liens to any other property you have. The title insurance company will merely show the IRS that someone screwed up by not enforcing the lien when you sold the property, and the lien will be removed, but then they'll come after you again.
If it's NOT your debt, and you are the buyer, and there's a lien that they missed, you should file a claim, and then the title insurance company will do what it takes to get you a clear title…but that's probably NOT going to include paying the debt for which the lien was levied.
Free tax lien and tax deed investing coarse. Invest in tax liens
6 Responses to “If a title company missed a IRS tax lien on a sale are they responsible for paying the IRS?”
should be covered by their O&E (omissions & errors) insurance.
Comment made on April 27th, 2009 at 9:09 pmReferences :
biz owner
Was there title insurance? It would depend on the wording in the act of sale.
Comment made on April 27th, 2009 at 9:25 pmReferences :
If a title company issued a title insurance policy and the lien was not listed as an exception to the policy, the title company should be liable. You should contact the attorney who handled the closing for you and have them look at the title policy.
Comment made on April 27th, 2009 at 9:59 pmReferences :
It depends on what you mean by that.
The title insurance protects the buyer against any liens against the property. The title insurance company is not necessarily responsible for paying the debt. The title insurance company IS responsible for having the lien removed from the property.
If it's YOUR debt to the IRS, and you were the seller, you can expect the IRS to come after you again, and possibly attach liens to any other property you have. The title insurance company will merely show the IRS that someone screwed up by not enforcing the lien when you sold the property, and the lien will be removed, but then they'll come after you again.
If it's NOT your debt, and you are the buyer, and there's a lien that they missed, you should file a claim, and then the title insurance company will do what it takes to get you a clear title…but that's probably NOT going to include paying the debt for which the lien was levied.
Comment made on April 27th, 2009 at 10:39 pmReferences :
Need more info. If you sold the house & it was your lien & they missed it- it's still your lien & it goes with you.
Comment made on April 27th, 2009 at 11:26 pmIf you bought house & you bought an owners title policy & the IRS lien is from the previous owner then I would contact the title company. But regardless an IRS lien is against the person & any assets the person owns- the lien would not become your responsibility- just because you bought the home- but the title company needs to work on getting it off title if you bought an owners policy. If there was only a lenders policy then you are not insured. Confusing I know, If you can detail a little more it would be helpful.
References :
me, mortgage business 22 years
A tax lien is just that.
When you get the property at a sale price the liens have to be paid.
Title companys usually give a lenders policy and for a small fee you can include yourself.
You really should include a little information, then ask the question.
Comment made on April 27th, 2009 at 11:59 pmReferences :
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