The Statewide Title Newsletter and Legal Memorandum

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Issue  121  Article  207
Published:  8/1/2005

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Lien Waivers (Reminder)
Bonnie Windom, Eastern Operations Director

The procurement of Affidavits Regarding Liens (lien waivers) has been incorporated into the real estate closing procedures by most attorneys. This practice is increasingly important for the protection of the attorney, lender, owner and the title insurer.

Unfortunately, in today’s society, we are experiencing more cases of dishonesty and fraud. Title insurance companies are experiencing an inflated number of claims due to disputes arising from the performance of unsatisfactory work by building contractors and subcontractors or for work performed and not paid for by the responsible parties. These lien claims can alter the position or intended priority of a lien of a deed of trust and can render it junior to a Claim of Lien.

It has been the practice of most, if not all, title insurers to take the underwriting position that a lien waiver must accompany the final title opinion or, in the alternative, that the certifying attorney state that the lien period has expired and that there are no liens of record.

Statewide Title, Inc. has verified that all of our underwriters require a properly executed lien waiver before the issuance of a policy. If a lien waiver or certification from the attorney is not received with the final title opinion, an exception for liens will be included in the policy. It is extremely important that these lien waivers (affidavits regarding liens) be properly executed, dated and notarized.

We strongly urge every real estate closing attorney to adopt the practice of protecting all parties to the transaction against lien claims by obtaining properly executed, dated and notarized affidavits regarding liens (lien waivers) in every real estate transaction.

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