Colorado Springs, CO asked in Estate Planning and Real Estate Law for Colorado

Q: A family trust gave us funds to assist in the purchase of a home. After the purchase they filed a lien on the property?

The trust demanded a promissory note and deed be signed after the purchase of the home. They said to ignore the promissory note and not to worry about the details of the deed (which incorporated the note and referenced it)! We declined / refused as the details were not anything discussed, nor agreed to prior to the purchase!

The trust became angry and threatened to place lien, if we did not comply with their demands. We tried to reason with them, however, they refused to discuss the issue and subsequently placed the lien. Is this lien even valid? How can we have it removed?

2 Lawyer Answers

Donald C Eby

  • Castle Rock, CO
  • Licensed in Colorado

A: Based on your facts this is likely a spurious lien. You have no obligation to agree to new terms after the gift or loan was delivered. You should contact an attorney to assist you in removing the lien.

James Alan Greer

  • Boulder, CO
  • Licensed in Colorado

A: Dear Trust Borrower For Purchase of Real Estate: While I don't have the full understanding of you/Borrower understanding of the loan and the details therein, I have to offer this generalized advice: it is "usual" that a Lender of money for purchase of real property would want to be "secured" in the repayment of the loan and thereby would reasonably expect that their Deed of Trust, securing a Promissory Note, would be placed on title. The best example of this arrangement is an arms' length loan from a Banking Institution to buyers/borrowers of property - it is a routine practice that the Lender is on title (or, a "lien" as you describe it). I hope this assists; perhaps you should ask an attorney to check over the paperwork to make sure it is properly recorded, but the "lien" situation in a loan is not unusual.

JIM GREER is an attorney licensed to practice in CO and CA and has specialized in real estate transactions for the past 30 years; nothing herein shall be construed as the offering of legal advice insofar as Mr. Greer is not in an attorney-client capacity with the inquiring party.

Timothy Canty agrees with this answer

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