Buying Commercial Property? The Importance Of Conducting A Lien Search
Posted on: 13 October 2020
Setting up a physical location for your company can help your business blossom in ways that it never has before. Even though the Internet has become wildly popular over the years, some customers still appreciate being able to go to a brick-and-mortar facility to make their purchases or express dissatisfaction if the products aren't necessarily what they were looking for. You may have found a location that you think would be absolutely perfect because the local community has a built-in consumer base that you naturally appeal to. However, before you sign documents that make you the owner of the building, see why you should conduct a lien search.
Avoid Taking Over Responsibility For Another Person's Debt
Liens are essentially a type of guarantee of repayment of a debt owed to another person or creditor. They typically come about because the individual who owns a piece of a property fails to pay the judgment that was placed against them by a third party. You may think that this won't be a problem for you once you take ownership. The reality is that you could actually be signing up for debt that you did not create!
People get liens levied against a property for many reasons. Maybe the current owner had work done on the property and failed to pay the contractors within the allotted time. The owner may not even realize that a lien is on the property, but that still does not absolve them of the debt. If you buy the building without doing a thorough search, you could be on the hook for an amount of money that could potentially bankrupt your business.
Protect Yourself With a Lien Search
If you conduct a lien search and discover that there is indeed a hold on the property, this gives you options. You might decide to use the lien as a negotiation tool, stating that you'll pay the lien off as long as the asking price of the property goes down. Or, you could ask that a clause be added to your contract which makes the owner solely responsible for any liens that may pop up in the future as a result of their own misdealings.
Rather than trying to conduct the lien search on your own, it's best to work with a professional lien search expert. They have the skills, training, and tools to check under every stone to make sure that you are purchasing a building that is free and clear so your business can thrive.
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