Notice of State Tax Lien in California

When purchasing a foreclosure in California that has a Notice of State Tax Lien filed by the California State Franchise Tax Board…against the owner, are we liable for that lien after we buy the property at a trustee’s sale at the courthouse steps.

Depends on whether it was filed before or after the loan that was foreclosing. If it is senior (before) the foreclosing loan you’ll have to pay it. If junior (after) you shouldn’t.

I am told by an attorney that since it was a personal tax lien that it will not need to be paid. I am told that it even if filed after the first lien (foreclosing lien) that it will be insurable title because the state doesn’t have rights to something unless they still own it. If they had sold the property with equity, they would have rights to the equity. But since it is a foreclosure, they do not. Not sure if you have different information or facts but this is what I am told.

Yes, if it was filed after the foreclosing loan it will be wiped out by the foreclosure, so you should have no problem insuring title.

Let me get this straight. There was only one mortgage on the property in first position. After the date of that mortgage, the California tax lien was filed against those owners of the property. They defaulted on the loan and we purchased the property at the trustee’s sale. So we have insurable title, correct?.. Since it was a personal tax lien, not a property tax lien filed by California…

That is correct.