Real estate can be a complicated affair. Between property liens, title insurance and the process of finding the right buyer at the right time, there’s a whole host of documents and notices that many homeowners are entirely unfamiliar with—and can seem both confusing and intimidating including a notice of interest.
Property Interest Notice
Perhaps you’ve received one. Perhaps you’ve heard of it and simply haven’t the foggiest notion of what it is. Perhaps it’s the first time you’ve heard the phrase and are frightened of receiving one. What is it? How does it affect you? What does it mean? And what steps can you take to avoid receiving one?
If you received a property interest notice and simply felt it was too insignificant or obscure to respond to… think again. A notice of interest can mean serious business for you. It can play a decisive role in whether or not you keep your property. And it’s something that should be an unquestionable cause of concern for you. But there are ways to fight it. But first? Let’s take a look at what a notice of interest actually is.
What Is A Notice Of Interest?
A notice of interest (or memorandum of contract) is sent out when a potential buyer or investor has a shared and equitable interest in a property as a result of a signed purchase and sale contract. Equitable interest can be a bit tricky to explain, since it’s a broad term that doesn’t solely apply to legal ownership. Instead, it’s assigned to public interest in a property which could potentially be allocated to a prospective buyer. It doesn’t indicate the prospective buyer is the legal owner; but it does indicate that a lien either has been or could potentially be placed on your property which would allow them ownership.
In Utah, a notice of interest is actually a fairly common procedure, and sometimes for beneficial reasons. Tenants in a rent-to-own contract may sometimes file a notice of interest along with property owners to ensure title searches reveal shared interest in a home. In cases of foreclosure resulting from a homeowner’s default on a loan, this can actually provide insurance for a tenant against legal liabilities.
But a notice of interest more often than not presents an obstacle for homeowners. Most frequently, it’s received as notification of a property encumbrance indicating a claim against a property; and that claim isn’t always necessarily a monetary claim. An encumbrance can also include property use restrictions and easements. Public utility providers, for example, can place an easement against your home for necessary repair and construction work which can impact its value—even if you’re the legal owner.
How Does A Notice Of Interest Affect My Property?
Filing a fraudulent notice of interest is considered both a state and federal felony. They’re typically filed in conjunction with a lien to establish ownership or potential ownership. And just like liens, a notice of interest is a matter of public record, both in Utah and the rest of the U.S.
But is a notice of interest the same as a property lien? Not necessarily. While a notice of interest is the first step towards filing a property lien, it does not indicate a lien has necessarily been filed. But it can mean an interested party can move forward with both a lien and potential foreclosure if you have not discharged the lien with a warranty deed. In Utah, a person is liable for $10,000 or three times the actual damages if they record a wrongful lien in the office of the county recorder against your property.
Stopping a property lien in Utah requires filing a written petition in court detailing the allegations and why you suspect the lien was wrongfully filed. If deemed valid by the court after hearing both parties’ arguments, the court will then issue a temporary ex parte order nullifying the lien. If the party who filed the lien does not file a request for hearing within 10 days, the ex parte civil wrongful lien injunction automatically becomes a civil wrongful lien Injunction which doesn’t expire for 3 years after it’s served.
While the fees for filing petition against a wrongful lien are relatively moderate in Utah (and can be anywhere from $155 upwards), it’s also a time consuming process; and one in which the outcome is never guaranteed.
How Can I Remove A Notice Of Interest?
If a notice of interest is filed in conjunction with a property lien which hasn’t been wrongfully filed, you’re not left with much recourse. You can either pay off the lien in full(which can sometimes involve accruing additional penalties and interest fees) or face potential foreclosure. Which is never a pleasant financial reality for many homeowners. But it is a reality. And even relying on a costly attorney during a wrongful lien injunction won’t always ensure a ruling in your favor; and in many cases, can prove far more expensive than it might actually be worth.
But at Gary Buys Houses, we provide a unique solution. Our Sell Now, Move Later program is designed to help homeowners like you use the proceeds from the sale of your property to pay off your lien in full while still living in your residence—sometimes rent free in certain short term cases.
We know just how frustrating it can be to face a notice of interest. And we know how frustrating it is to deal with a property encumbrance like a lien, especially if you’re looking to purchase an additional property or simply find you need to access your home equity. That’s why we’ll work with you each step of the way to ensure the purchase process is a seamless one, with all the professionalism and courtesy hundreds of Utah homeowners have come to expect from us.
Don’t let a notice of interest stand between you and your home. Call us today at (801) 382-9199.