For Buyers and Sellers, there are various types of bills/liens on a property that can encumber title even if there isn't an actual lien filed with the court records. These types of liens are in place by "operation of law". Below are three that come up frequently in real estate closings and an explanation of each.

WATER BILLS
In various counties and the City of Atlanta in particular, uncollected water bills have become a major problem for the municipalities. Many law firms do not check for water bills as they were customarily considered a utility and not entitled to lien status. The court confirmed in 2009 that this is not the case and not only are water bills liens, but they are entitled to heightened status like tax liens. (Federal Home Loan v City of Atlanta, 674 S.E.2d. 905, 285 Ga. 189 (Ga. 2009). McManamy McLeod & Heller, LLC routinely checks for any water bills associated with the property address in question to ensure that the Buyer will not be inconvenienced after closing with a service cut off or a hefty bill that they did not incur.

If you are closing on a property, in particular a property that has been through a foreclosure, it is imperative that the attorney check with the water authority to confirm that there are no past due water bills. If there are water bills outstanding, even if the water bill is in the name of a former owner of title, the bill must be paid at closing in order to transfer clear title to the Buyer. If it is not cleared and paid, the city may not allow the buyer to turn on water in their name even though all past due bills in the name of the seller have been paid.

HOMEOWNER'S ASSOCIATION LIENS
If a property is part of a Homeowner's Association and there have been Declarations of Covenants, Conditions and Restrictions filed on the title, then any unpaid monthly or annual dues become a lien on title. For this reason, if a title search reveals Declarations of Covenants, Conditions and Restrictions, then the attorney will order an Association Letter prior to closing so that any possible past due balances, transfer fees, special assessments or capital contributions may be collected at closing.

TAXES
In addition to a regular title search, a tax search should be performed to verify that all outstanding taxes are paid either before or at closing. Some communities, although close together in proximity, have different taxes than others. For example, Fulton County and the City of Atlanta properties have city taxes, county taxes and sanitation taxes. However, unincorporated DeKalb properties have only DeKalb taxes.

It's imperative that you select a closing law firm who knows what to look for and ensures the taxes are paid on the property to ensure that your clients' best interests are protected.

   

 
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Sincerely,
  Patrick McManamy
  Bren McLeod
  Kati Heller