Do mechanics liens get removed after the foreclosure sale?


#1

Do mechanics liens get removed after the foreclosure sale?


#2

Generally all liens that are junior to (dated after the loan in question? and no subordination) are wiped out at sale. Property taxes are always senior, and IRS liens have a 120 day right of redemption.
That said I’ve heard that there is some case law that says a mechancis lien may stand IF the work was necessary to protect the asset. I’d imagine this to mean repairs after a storm, or a water pipe breaking, and NOT something like new carpet.
USFN tends to be a great resource for keeping up to date on the latest legal issues around trustee sales. I’ve purchased some of the publications and guides and get their e-update which I find very useful on these topics.


#3

Interesting. What is tracking mechanism for the “mechanics lien qualified repairs” to be recorded and later tracked?


#4

They are recorded at the county recorders office. Right now there is no good source other than the county recorder or a title company to check for these. They are fairly rare - I’ve never had to pay one on my 150+ foreclosure purchases.