Legal Question in Real Estate Law in Maryland

I entered into a contract October 3rd to purchase a house with the stipulation that I sell my home first. I sold my house in 36 days and was supposed to close on the new house December 3rd. I wasn't told until the day before closing that the house I was to purchase had liens on it. The sellers never disclosed this information at any time and the title company never informed me there were issues when they were hired October 3rd. Instead of signing settlement papers I signed an addendum that would allow me to stay in the house for the month of December rent free. The concept was they would clear this up at the end of the month. That hasn't happened and now I have to either move or pay a high rent to stay in the house with no marketable title in sight. I've lost out on the low interest rate I locked in early December. Is it legal for the seller not to disclose the liens? I should note that the sellers are a company with a lawyer who has been involved from the beginning. Didn't the lawyer have an ethical obligation to inform me of the lien? I should also mention this is a family company and the lawyer is the son in law.


Asked on 1/01/11, 6:37 pm

1 Answer from Attorneys
Phillip M. Cook Cook Legal Services, LLC

You've got a mess on your hands. It sounds like you did not use a real estate attorney to help you through the process of selling your home and buying the new home (had you, you would not be in this situation). It also sounds like you didn't use a real estate agent either. Good lesson for the future -- pay a little bit of money now to prevent having to pay much more later to clean up the mess.

It's also not clear to me whether you currently live in the house you intend to purchase (with the lien issues) or in the home you were selling. I guess my question would be -- did you actually close on the prior home and move out? If that's the case, you've made an even bigger mistake -- you had a contingency for exactly this type of situation. If you sold the old house before you closed on the new house, you have only yourself to blame.

Whether the seller of the house is required to remove the liens depends entirely on the language of your purchase and sale agreement with the seller. Since the seller/family lawyer was not acting on your behalf, he likely had no duty what-so-ever to disclose problems with the property. It was up to you to hire your own title company (or real estate lawyer) to perform title on the property. For a couple hundred dollars, you would have seen the liens and known not to get involved with the property. If the liens make the property unmarketable, the seller likely has an obligation to fix or has the obligation to walk away from the deal -- depends entirely on the documents.

A Maryland real estate attorney can review your purchase and sale agreement with the seller (and if you are not already out of your old house, with your buyer), the liens, the addendum, and any other correspondence between you and seller, and advise you on your rights and options. Your rights and options may not be pretty, but at least you will know where you stand. The problem with asking these types of questions through LawGuru of course is that we have no access to these documents.

Feel free to contact me at [email protected] if you would like assistance. Best of luck.******The above is for informational purposes only and does not create an attorney-client privilege.*******

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Answered on 1/07/11, 3:20 am


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