Judgement On "MY" House?
I own a property that I am doing a lease/option on. My tenant tried to get a loan to purchase the property. The lending company that she was using ordered an appraisal on the house. The paperwork had my tenant and the loan company's signatures on the document for the appraisal to be completed. The appraiser completed the appraisal, but my tenant's funding fell through due to her credit score dropping. My tenant says she will not pay for the appraisal, because she was going to have the appraisal rolled in with the closing costs and doesn't have enough to pay for it. The appraiser is now threatening to put a judgment on my property because that is the address that she did the appraisal on even though I wasn't a part of any of these activities.
Can this be done, and if so, what are the odds that the law is on my side since I was not obligated to anything with a signature?
Any insight would be greatly appreciated.
Strategy Investors
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You used the term judgement so I am assuming there is a court judgment. If so, who is the judgment against? If it is your tenant it would seem that you could either prevent or have a judgment lien removed. I would think that your position would be strengthened if the purchase agreement states that buyer pay for the appraisal. This would indicate that the buyer is on the hook and not you.
That being said it may be the practice of the appraisal industry to lien the property since this is expedient for the appraiser. His reasoning may be that the house is up for sale and he will get paid at closing and leave it up to the various other parties to sort out who pays.
If your lease option is well written you should have some punitive terms for unfulfilled obligations under the option. This might give you some leverage to convince her to pay.
Maybe the term lien was used by the loan company, I was talking to the loan officer handling the deal. If it was a lien that the appraiser wanted to put on the house, does that affect my credit in any way?
It's a small lien ~$400, I would most likely settle before it gets to that point, I just don't want my credit to be affected by this practice of the appraisers.
Thanks,
Strategy Investor
You might call the loan company back and get some additional information about the lien. If she was a prospective buyer not living in the house and was responsible for financing costs including appraisal, I doubt that a lien could be placed on your property. The fact that she leases the property from you doesn't seem to be material with respect to her responsibility to pay for the appraisal. I, for one, would like to hear what the lending company has to say about this.
At this point, what are you going to do? Is she going to remain in the property and are there some consequences to her under your lease option agreement?
1. I believe the lien is technically not valid as the lien has been placed on a property that is not owned by the party who ordered the appraisal. It might be faster for the appraiser but I believe the lien will be thrown out if challenged.
2. The could be room for a counter suit as the appraiser should be able to easily tell that the property is not owned by the loan applicant. I think it is considered a form of slander or something similar to lien a property that is technically unrelated to the 'bad debt'. Hence you can likely scare the appraiser into removing the lien. Assuming the appraisers are licensed in your state call the licensing board and see what they have to say.
I once had a mechanics lien filed for some supplies that were ordered and delivered to another address. It was a condo and my unit was not a party to the transaction in any way. Someone else that also was noted on the lien (a different unit) made 1 call the liens were quickly corrected.
John
[addsig]
From my understanding according to the law, whoever called the appraiser and ordered it is responsible to pay for it. That is why I was always told as an agent that I should never personally order an appraisal for a buyer or a seller. If the bank ordered the appraisal, the bank is responsible to pay. If the tenant ordered it, then it is the tenants responsibility. If you called and orderedit then, guess what? You owe! So, Who picked up the phone and ordered it? Thats who the appraiser can sue. No one else.
You could probably have your title co. "bond around" that lien when & if you sell this property...and the lien holder certainly cannot legally enforce his lien.
Many, many such defective liens are basically ignored by title co and simply go away without worry.
[addsig]
I don't see any way that the appraiser can place a lien against your property. You did not order the work, therefore you are not responsible for the payment.
A lien can only be placed against something owned by the debtor.
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