How to Check If a Property Has Any Claims or Liens Like Bank Loans Disputes Taxes Water Electricity Telephone or Gas Bills against It Am I Liable To Pay Any Such Standing Payments

Apr 19, 2019

How to Check If a Property Has Any Claims or Liens Like Bank Loans, Disputes, Taxes, Water, Electricity, Telephone or Gas Bills against It? Am I Liable To Pay Any Such Standing Payments?

Do you have your eyes set on that house or shop that you are so desecrate to buy? Have you checked the property properly? For people living in Karachi, Lahore and Islamabad and even in other cities and towns, it is not a new thing of knowing people who bought a property some time back and are now facing legal issues regarding its title claims. Besides title claims, many properties have unsettles payment issues that the seller cleverly transfers to the buyer without their knowledge. Property liens are common in real estate matters and people get to know about them only after they have actually bought the property.

What are Liens?

Liens are the standing payment associated with a certain property when the owner fails to pay its liabilities or bank loans. Other liens could be the land conflict, multiple tiles claims, fraudulent history, unpaid utility bills etc. in case the owner is unable to pay the liabilities the bank or court holds the right of selling the property to recover its payment. People are usually are usually aware of all this but still, innocent, especially first time buyers are duped by fraud agents and sellers who sell conflicted property and the buyer has nowhere to go.

To avoid such circumstance, it is advisable that you research the property in detail and make sure that it is clean from any kinds of liens. Property liens are of four types:

  1. Property Tax Lien: This lien is associated with a property when the owner is unable to pay the due property tax. Each year, government puts tax on all the taxable properties, which is mandatory for the property owner to pay. In case, it fails to pay it on time, government puts tax lien on it and the owner has the risk of getting its property sealed.
  2. Mechanic’s Lien: This lien is applied when the homeowner has not paid the third parties like property builder, site workers, material; suppliers, engineers, contractors etc. and they have filed a lawsuit against him.
  3. Judgement Lien: This type of lien includes court cases in which the owner of the property is liable to pay money to the other party. This money is recovered by auctioning or selling the owner’s property, which also means that it is illegal for the owner to sell the property.
  4. Mortgage Lien: In foreign countries, people apply for mortgage to buy houses and in our country taking home loans from banks is similar to it. People obtain home loans to buy or build their houses, which is to be paid as instalments in the bank. In case, the owner does not pay the settled instalments, the bank holds the rights to restrain the property.

How to know if the property is clean?

Checking the property before buying is crucial and there are some clever ways of knowing if the seller is being honest and truthful with you. Some of the easy ways are:

1. Asking for Recent Tax Receipt

Want to know if the property is having any tax liabilities or liens? Ask the seller for his recent tax payment receipt. Government issues payment receipt to the taxpayers when they pay the tax, which means that if the owner has the receipt there are good chances that the property is clean of any tax liens. It is advisable to ask for the copy of the receipt and confirm if it is authentic from the office because many people forge false receipts.

2. Asking for Recent Utility Bills

Utility bills include Sui gas, electricity, water and telephone bills, non-payment of which may lead to the charge of lien on the property. When checking the property, ask for the recent paid utility bills from the seller and get the copy to check it from the concerned departments. If you mistakenly buy a property with standing utility bills, chances are that you will be expected to pay them.

3. Asking for Original Property Papers

In case the seller has unpaid bank loans, the seller will not have the original documents as the bank keeps them with itself as a security. If you get the original papers, check that they have complete documents including the title documents, sale deed, mother deed etc. to prove their legal possession of the property. Get the copy of the documents and get it checked from legal resource to confirm its authenticity.

4. Checking from the Concerned Departments

Once you get the copies of all the documents with you, contact the concerned authorities like land records, registrar, utility bills records etc. to confirm that the papers are real and there are no liabilities on the property.

5. Consulting the Lawyer

Probably the best advice you could get on property matters. Hiring a lawyer takes off the burden from you as you will not have to do the work yourself and let the lawyer do all the work. Lawyers are experienced professionals that know how to check properties, dig out important information and give helpful advice and help, making them an ideal for the matters.

Am I liable to pay any such standing payments?

A simple answer to it is no. You are not liable to pay the standing payments and liens of the property. In case you end up buying any such property then, do not panic and consult an expert lawyer to handle the matters.


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