Last week I was perusing through my feed of various real estate and title industry articles, as I usually do, when I came across this headline from Trulia: ‘I Bought My House Without Ever Seeing It In Person’. Being the crazed due diligence advocate that I am, instant panic set in. I thought to myself, “You can’t do that! What If…(insert unrecorded debt issue here) is attached to the property?”
Why isn't Trulia warning home buyers about unrecorded liens and other property issues?
I’m not gonna lie, the article did offer up some pretty useful tips such as using social media to research the neighborhood and surrounding areas as well as using the web to research other similar homes where you’re looking to buy.
This really struck a chord with me because the average homebuyer and even real estate agents that we encounter have no idea that unrecorded liens and fees are actually attached to the property and not the individual in the state of Florida. With our beautiful state being such a destination, I’m sure there are thousands of people buying condos and houses without knowing the huge risk they’re potentially walking into.
At PropLogix, our number-one goal is to make sure everyone is educated when it comes to home buying and protecting themselves from potential debt. If you are going to do this very gutsy and terrifying move of buying a house without ever seeing it in Florida, here are the top things to look out for that Trulia didn’t warn you about:
HOA and COA fees the previous owner never paid off.
In Florida, debt will stay attached to the property governed by a homeowner's association or condo association. With the staggering amount of associations in Florida you absolutely should be getting a HOA or COA information, commonly referred to as an estoppel letter, for any property you’re planning to buy. Also beware that some properties are actually governed by more than one association and you could have to pay past due assessments to both.
Code Enforcement fees due to overgrown grass.
This is a big one that we see all the time. The scary part is that the property may even look like there are no issues! In some counties when the grass gets to a certain height the municipality will come out and cut it down themselves leaving the next unlucky home buyer with a huge fine -- these are called lot clearing, or lot cleaning fines, which can result in liens. Sometimes in this situation and the municipality doesn't step in, the property will continue to accrue a daily fine until it’s been brought into compliance. We’ve seen fees in the millions for something as silly as an unmowed lawn.
Work that was started without a permit.
The property you’re looking to buy has a brand new covered porch that the listing boasts. How do you know that the owner pulled the proper permit to begin work on the property? Not only can you get fined by the building department, but if the new addition was never inspected it could potentially be unsafe and not up to code. That means you could either have to pay to bring it up to code, or have it properly removed. Same is true for a lot of home improvements.
Utility bills that were never paid by the previous homeowner.
This is the last thing you want to be dealing with when trying to move into your new home. You go to turn on the water only to find that the last owner decided not to pay their water bill for the past six months. At this point it’s too late and you’re left responsible for picking up the bill.
How do you avoid these issues?
- You can look up the municipalities and associations and try tracking this info yourself.
- If you're using a Florida title company, let them know you want a Municipal Lien Search and an Estoppel (if it applies to your property.)
- Or if you're using an out-of-state closing company, you can let them know that companies like mine (PropLogix) do this and they can order it from us.