Which Judgment Liens Create A Cloud On Title?
In rem versus In personam. Do all judgment liens matter to your deal? Not necessarily. Judgment liens are monetary awards in favor of a wronged person or entity and against the ‘guilty’ party. You would think that any lien against your borrower, seller or buyer would be an issue in your transaction and require payment in full to clear. But it depends on whether the judgment is ‘in rem’ or ‘in personam’. Fancy Latin terms which simply translate to “against the property (rem)” or “against the person (personam)”. An easy way to remember which is which? Pretend that the word ‘rem’ stands for “real estate matters”.
In rem judgment liens strictly affect the property against which the lien was awarded. If the judgment doesn’t concern your property, then it need not concern you or the PA Title Insurance company you are working with. Mortgage foreclosures, municipal liens, code enforcement liens for property maintenance are all examples of in rem judgment liens. They may be filed in the prothonotary, common pleas court or municipal court. They could be in favor of a bank, an individual, a city or a municipal authority. In Philadelphia County some in rem liens begin with a case number of ‘CE’, but don’t get too cozy with labels as not all CE liens are in rem liens. Some CE judgments are in personam judgments and stick to the person who had the lien filed against them. Yes, I said stick because all in personam judgments follow the person and must be paid regardless of what property they currently own. And don’t forget the granddaddy of all in personam judgments – the USA Federal Tax Lien. That judgment will stick like Super Glue! So trust your reputable and qualified Pennsylvania Title Insurance Company to search the databases, review any and all judgment liens that appear against the name of your borrower, seller or buyer and determine which, if any, will be dealt with at settlement. Even if your owners are John and Mary Smith with 500 possible matches! We are a PA Title Company and well figure it out for you.