Monster Unrecorded Lien of $519,500 Found on Beachfront Property

 

Moving to Florida and buying a waterfront condo is the American Dream for plenty of folks (especially those in snow-storm prone areas). Imagine that you finally found the perfect condo- it was a hop, skip and a jump from the Atlantic Ocean and the Intercoastal, had beach access, and would make all your dreams of living in South Florida a reality.

Your closing date is approaching when you receive a nightmare call from your title company/real estate attorney/selling agent- they recently hired a research company to conduct a municipal lien search on the property and the results just came back : there is an outstanding lien in the amount of $519,500.

This was the recent case for a property being sold in Sunny Isles Beach, FL. According to the City:

A Warning Notice of Violation was issued on March 5, 2009 in the amount of $500 per day to wit: violation of 8-1 FBC 1-5.1: Failure of owner or contractor to obtain a permit…A Special Master’s Order found the violator guilty and imposed a lien for continuing penalties effective June 3, 2009…

Total outstanding lien amount for said non-corrected violation is $519,500.

Like most municipalities, the City of Sunny Isles Beach imposes penalties for code violations that go uncorrected. The local ordinances (S.I.B. Code of Ordinances §14-13) and Florida Statutes Chapter 162 provide that these penalties become liens that run with the property, which means that the property can change owners but the new owners would be responsible for the lien amount.

Here, the proposed buyer would have bought the condo and unknowingly, assumed responsibility for the $519,500 lien. Luckily, a municipal lien search was conducted and the proposed buyer was empowered to make a decision how to proceed with the transaction. Make sure a lien search is conducted before you close on a property!! One reputable company that searches the entire state of Florida is Premier Lien Research, LLC.

If you were in this situation, what would you do? Walk away from the transaction? Negotiate with the seller to pay off the lien amount pre-closing? Proceed with the purchase (heck, it’s a waterfront condo!)

Florida real estate predicted to stabilize; grow in 2012

Clear Capital, a California-based real estate research company, said in recent statement that it expects several Florida real estate markets to experience continued growth:

Miami and Tampa are projected to be among the five highest performing metros with 8.8% and 7.4% growth, respectively, and Jacksonville is forecasted to gain 4.3%, placing it at a respectable eighth among the top metro markets. The exceptional growth in these markets can be a result of several factors, including being hit especially hard in the downturn. While fighting back, they remain significantly off their highs of 2006. Other factors in play in these markets include large increases in the values of their lower priced homes (near double-digits for all markets) when compared to higher priced segments of the market, and a high percentage of all cash transactions (51.8%) when compared to other metros. This indicates a high degree of investor activity as they look for bargains in the region, driving up demand.

Read the full report at

http://www.clearcapital.com/company/MarketReport.cfm?month=January&year=2012