More About House 5

I was running short on time yesterday and forgot to mention something about House 5. While doing title research, I discovered the HOA placed a lien on the property. The lien is for about $700 plus $130 a month going forward from November. Now this is where it gets interesting. Follow me on this...

The owner, we'll call him John Doe, died. On 11/18/04, the personal representative of the estate of John Doe signed a Grant Deed In Lieu Of Foreclosure giving the property back to the bank rather than go through the foreclosure process. This deed was recorded on 11/30/04. On 11/19/04, the bank executed a substitution of trustee, changing the trustee from a title company to a loan servicing company. This was also recorded on 11/30/04. On 11/22/04, the loan servicing company granted full reconveyance to "the person or persons legally entitled to" all interest in the property. This was also recorded on 11/30/04. I take this to mean the bank has obtained the property in lieu of foreclosure and now the borrower (John Doe) is released from obligation. Finally, the bank then transferred title via grant deed to the Veteran's Administration. Interestingly, this document was recorded on 11/30/04 BUT... There are NO dates on the document as to when it was actually signed! There is no date when the bank representative signed and, even more amazing, there is no date of when the notary signed! Given that it was recorded on 11/30/04, I think it is safe to assume it was signed prior to that date. So at this point, the VA owns the home and, in fact, they are the ones currently selling it.

But.. on 11/23/04, the management company for the apartment complex where this property is located filed a lien against the property for about $700 plus $130 a month each month after November, 2004. The lien was made stating John Doe as the owner. This document was recorded on 12/6/04. So when the lien was recorded, John Doe was not the owner. There is no subsequent document recorded declaring this lien void or released.

Now if the property went to foreclosure, the lien would have been wiped off. But, title was transferred in lieu of foreclosure, so that doesn't apply. Additionally, the lien states the incorrect owner. So is it a valid lien?

The total amount of the lien is currently about $1,000 and I assumed in my offer price that the lien would have to be paid off, but I wonder if it really would. I suppose this is a classic case of a clouded title.