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Punctual Leadership Blog

25 May
Uncategorized

THEY STINK: MUNICIPAL LIENS & UNRECORDED SEWER EASEMENTS

by Punctual Abstract

Today we will look at two sewer-related issues that can cause serious financial loss: municipal liens and unrecorded sewer easements.

A Poor Inspection Leads to a Municipal Lien

Let’s say you are a real estate investor and you plan on turning an old fire station into a brewpub – you know, the kind of place that makes their own beer and serves delicious food. The property, which is in a state of disrepair, was sold to you by the trustee of the deceased owner.

You have a title insurance company perform a title search to identify any issues that would limit the use of the property or put your ownership in jeopardy. Nothing comes up, so you proceed with the transaction and eventually add a large deck where the old lot used to be. You put in expensive benches and tables. You spend $5,000 on landscaping and hardscaping alone.

Then, there’s a problem with the sewer line. Only then do you find out the waste plumbing from the old fire station didn’t connect up to the city sewer main line, but led to a septic tank. What’s worse? The septic tank is buried right beneath the new deck. The city your property is located in passed an ordinance against septic tanks, and now you are responsible to connect it up to the city’s sewer line at a hefty cost. Stories like this are surprisingly common, and they can be the nail in the coffin for new businesses.

Now, if this imaginary restaurateur was unable to pay for the improvement, the city would place a municipal lien on the property. If this property was sold, the responsibility to pay the lien would pass to the new owners. For this reason, it is essential that you have a thorough property inspection performed to uncover any violations you could be held accountable for. It’s also wise to have a municipal lien search, in addition to a title search, performed by a reputable public records research company like All American Document Services.

Unrecorded Sewer Easements

A similar situation related to sewers that can cause property owners real financial loss are unrecorded easements.

Generally, municipal works like sewers and water lines pass through roadways with existing right-of-ways that allow contractors to perform construction without having to warn property owners in adjacent properties. But in some cases, it’s not possible to construct a sewer line or water line in an existing right-of-way. In these cases, when the line must pass through or adjacent to another property, an easement is recorded to establish the right to use the land for a specified purpose. The problem is that not all sewer easements are recorded. If it’s not recorded, it won’t be picked up when a standard title search is done and the property owner may build something expensive (like a deck) over a piece of land that can be torn up by contractors.

Contact Punctual Abstract

To make sure there are no municipal liens or sewer easements on your property, recorded or unrecorded, hire a public records research company that specializes in clarifying legal and financial risk. That’s Punctual Abstract!  Visit our homepage today to see how we can help you!