On closing day, the buyer's lawyer discovers an unexpected lien against the property title. What is the most appropriate immediate action?
Correct Answer
D) Delay closing until the lien is resolved or title insurance covers it
An unexpected lien creates a title defect that must be resolved before closing or covered by title insurance. The buyer should not complete the purchase until they receive clear title or adequate insurance protection, as proceeding could result in the buyer acquiring property subject to the lien.
Why This Is the Correct Answer
Option D is correct because an unexpected lien represents a title defect that must be resolved before closing. The buyer has the right to receive clear and marketable title as agreed in the purchase contract. Proceeding with closing while a lien exists would mean the buyer acquires the property subject to that encumbrance, potentially creating financial liability. The proper course is to delay closing until the seller clears the lien or until title insurance provides adequate coverage for the issue.
Why the Other Options Are Wrong
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