Code violations and liens: selling a house with problems on the record

Code violations and liens: selling a house with problems on the record

A letter from the city. A notice taped to the door. A title search that turns up an old lien you forgot existed. If you are trying to sell a house that has violations or liens attached, here is what actually happens to them — and what your options are.

The honest fine print first: I buy houses, and this is not legal advice. A real estate attorney can review anything unusual, and your title company will confirm exactly what shows on the record before any closing.

**What a code violation actually is.** When a property falls out of compliance — an unpermitted structure, a broken fence, trash and debris, an unsafe staircase — the city or county can cite the owner. Unresolved violations can gather daily fines, and in some places those fines turn into liens attached to the property. In Colorado, municipal enforcement varies by city; in Northeast Ohio, cities like Cleveland and Akron are known for aggressive inspection and point-of-sale requirements. Either way, the debt sticks to the house, not the neighbor.

**Liens: the four you are most likely to meet.**

- **Tax liens** — unpaid property taxes (county) or unpaid income taxes (IRS or state). - **Mechanic's liens** — a contractor or supplier who did work and was not paid. - **Judgment liens** — from a lawsuit that went against you. - **HOA liens** — unpaid association dues and fines.

**The good news: most liens get paid at closing.** Liens attach to the property, which means they are usually settled out of the sale proceeds — not out of your pocket before the sale. The title company pays them off at closing, in a specific order, and you receive whatever is left. If the liens and mortgage are bigger than what the house will sell for, that is a different conversation (a short sale), and it is still worth having early rather than letting the property go to auction.

**Your three options.**

- **Cure and list.** Fix the violations, clear small liens, and sell traditionally. Best when the fixes are cheap and you have time. - **Sell as-is with the problems disclosed.** The buyer takes on the violations and the title company clears the liens from the proceeds. This is where cash buyers do their cleanest work — no buyer financing to trip over city inspection requirements. - **Do nothing.** The worst option. Fines compound, liens grow, and the sale gets harder every month.

If you tell me what is on the record, I will tell you what it means for your net — in writing, before you decide anything. Call or text me at (720) 897-5219. Free, plain, no pressure.

- Rashawn