During the review of the search documents, ATG member attorneys will encounter name searches known as Judgment and Lien Searches. The ATG Search Department runs each seller’s and buyer’s names. A judgment or lien can attach to any real property a person owns in the county in which it is recorded. Trustees of living trusts must also have a name search performed, as well as any entity such as a corporation or an LLC. A thorough review of these searches will help a closing go more smoothly. Below is a basic review on how to examine a Judgment and Lien search.

1. Check the search for the name searches. If any buyers or sellers did not have a name search performed, contact ATG’s Search Department at 800.252.0402 to request an additional name search.
2. Review each name search carefully. If the name search is several pages long, it may be necessary to obtain Personal Information Affidavits from either buyer or seller in order to rule out any possible “hits.”  In this situation, raise an exception on Schedule B regarding the possible judgments against a particular name.
3. Name searches often have abbreviations, such as “J” for Judgment or “D” for divorce. Many of these are self-explanatory, but if you have questions on any particular abbreviation, the ATG Underwriting Department attorneys can help you with this.
4. For sellers, check the Judgment and Lien search for any entries containing an address that matches the property address. In addition, if you have an executed Personal Information Affidavit, check for any matches on the last four (4) digits of the Social Security Number, as well as any match on any former address of the seller.
5. For buyers, if the name search shows any Judgments or Liens, a Personal Information Affidavit will likely need to be obtained. Once executed, review the addresses listed on this with the Judgment and Lien search, as well as the Social Security Numbers (SSNs).
6. For any direct hits (where the address or SSN matches), request ATG to pull the document if it is not already contained in the search. Some entries might list a zero (0) for the judgment amount, but judgments are never zero; you must obtain a copy of the document itself to find the judgment amount.
7. If the lien or judgment against a seller is still valid, raise it as a specific exception on Schedule B. The lien or judgment may have to be paid off at closing in order to give the buyer clear title. If needed, obtain a payoff letter from the judgment creditor.
8. If the lien or judgment is against a buyer raise it as an exception on Schedule B. If it is a cash deal, a buyer has the option of taking subject to the lien. If the buyer has a lender, the lien may or may not have to be paid off depending on whether or not the loan is a purchase money mortgage. Often, a buyer’s lender will require that it be paid off, in which case you will need a payoff letter.
9. Keep in mind that different judgments and liens have different expiration times. For instance, the statute of limitations on a Memorandum of Judgment is seven (7) years, whereas an Illinois Tax Lien is valid for 20 years.

Careful review of your Judgment and Lien Searches can help prevent many delays at the closing table. Always try and obtain Personal Information Affidavits in advance of the closing so that you have time to review them.

Questions? Contact an Underwriter.