It is always essential for home buyers to conduct a lien search before the closing process. A lien can be described as a claim held by a third party against your property. Lien search companies specialize in lien searches and verification.
However, the search does not always show some of the hidden fees. One of those fees you could miss is the special assessments tax liens. The assessment levies are hardly ever on the public record, and new buyers must make a request. Here is a look at what special assessments are and how to request them.
Municipal Special Assessment
When the municipal authority carries out public works that benefit the property, they may charge levies. The fees are known as special assessment tax liens. The projects may include an upgrade of infrastructure, which may involve repairing street lights and sidewalks. The tax may also cover waste management and storm drain development projects.
Since it is a service charge that is not based on the value of the property, you will not find it in the ad valorem part of the bill. Most jurisdictions will have it on the non-ad valorem section instead, but there is no guarantee your county will list it in that section.
HOA Fees and Special Assessments
It is also worth noting your Home Owners Association may charge similar fees to fund upgrades within the community. The renovations may include a new roof, repair of a heating system, or renovate parts of the pavement.
The levies charged by your association can be unpredictable. However, the rules on charges are on the administrative documentation. You can review if any special assessments may impact the closing process.
Challenges in Finding Special Assessments
One challenge is that lien searches may miss listing special assessments in their reports. The levies are absent because the search does not recognize that the title has changed ownership. If the buyer is only aware of the last owner, they may fail to find assessments from a previous owner.
Interests and Adjustments
It is also possible that you may fail to find the most recent special assessment. The county may not include the most recent levies in anticipation that there will be changes in the amount. These changes are often due to adjustments prompted by interest rates.
You can make a payoff request before the closing process. It is only through the payoff request that you can establish you have the most recent amount. Lien search companies have property analysts that can request in one or two business days.
Florida Lien Searches and Assessments
The first step is to find out if the property has a special assessment. It is essential to ensure the levies have been settled and are in the public record. Some of the documentation you’ll need before the closing process includes payoff letters, transaction activity reports, and the payment schedule.
Get the Right Lien Search Partner
In 2019, 68% of home sellers said they were very comfortable with the closing process. A thorough lien search can give you the information and confidence you need to complete the transaction. It is crucial that you establish if there are other fees like special assessments. A property analyst can assist you with the search. If you are looking for lien search companies in Florida, kindly contact Florida Lien Search, a family-owned business with more than 20 years of experience in this area.