What Can a Condominium Do About a Lien From the Builder?
Full Question:
Answer:
There are two basic types of deeds: a warranty deed, which guarantees that the grantor owns title, and the quitclaim deed, which transfers only that interest in the real property which the grantor actually has. The only type of deed that creates "liability by reason of covenants of warranty" as to matters of record is a general warranty deed. A quit claim deed contains no warranties and the seller doesn't have liability to the buyer for other recorded claims on the property. The purchaser takes the property subject to existing taxes, assessments, liens, encumbrances, covenants, conditions, restrictions, rights of way and easements of record.
The answer will depend on the facts and documents involved, such as when the lien was placed and whether notice was given to the unit owners. For example, if the lien existed when you purchased the property and you were given a warranty deed, then you may have a claim based upon breach of the warranty of clear title in the deed. Until the lien is removed, if you were to try to sell it in the future, you would need to use a quit claim rather than a warranty deed, and the new owner would take the property subject to the lien.
For further discussion, please see:
http://www.schildlaw.com/Rockville/winter05let.htm#L4
