The Real Deal Miami

Old liens could foil investment opportunities

A Broward judge ruled buyers of foreclosed properties are liable for long-standing liens

November 04, 2014 04:30PM

  • Print
Weiss Serota Helfman Cole Bierman & Popok senior associate Eric Hockman, who teamed with town attorney Susan Trevarthen in the lawsuit

Weiss Serota Helfman Cole Bierman & Popok senior associate Eric Hockman, who teamed with town attorney Susan Trevarthen in the lawsuit (credit: Melanie Bell)

A Broward Circuit judge ruled that liens remain enforceable, even if they’re recorded after a final judgment. And that’s bad news for buyers of foreclosed properties.

The case involved real estate investor James Ober, who was battling Lauderdale-By-The-Sea in court. Ober purchased a foreclosed house at 3270 Spanish River Drive from Bank of America for $200,000. Years before, the property had garnered some $328,000 in code enforcement liens, according to the Daily Business Review.

Judge Thomas Lynch sided with the town, holding Ober responsible for the liens. Liens “recorded between final judgment of foreclosure and judicial sale are valid and enforceable,” Lynch wrote.

“This is a classic case of governmental overreach,” said Eric Jacobs, partner at Beloff Parker Jacob. “Mr. Ober is sensitive to the needs of cash-strapped cities, but it elected not to pick a fight with Bank of America and preferred instead to pick on him. The lis pendens statute is there to protect a foreclosing party from people — or cities in this case — jumping in at the end and trying to gain priority.”

But the town’s attorneys argue that Ober knew about the liens when he purchased the property and therefore had notice about the debt. [Daily Business Review] – Christopher Cameron

  • Michael Andrew Graf Rasch

    Not being a party to the transaction I can only say that someone dropped the ball. You need a good title agent to look for the liens, and when the contract was submitted, all he had to add was a line that his attorney would create that reads something like this ” property to be delivered free and clear of all encumbrances, liens, and … ”
    I’m a realtor, so we can not add stuff to the contract, it has to be done by the parties involved or their lawyers.
    I’m leaning on the side of the city, since a search would have found it.

  • MiamiFranky

    From the article , there seems to be some bad faith from the buyer, as he knew about liens, and tried to mitigate them.

MENU