Sign In | Create an Account | Welcome, . My Account | Logout | Subscribe | Submit News | Staff Contacts | Home RSS

Not all foreclosure properties are ‘free and clear’ of liens

June 21, 2019
By ERIC FEICHTHALER - Real Estate Law , Cape Coral Daily Breeze

Mr. Feichthaler:

I am thinking about purchasing a foreclosure at auction. If I win at auction, will I own the property free and clear of all liens?

- Leanne C.

Dear Leanne:

There is a general presumption by many that foreclosures always result in properties held free and clear. This presumption is absolutely wrong, and can get the unprepared foreclosure in serious financial peril. The first step in any foreclosure purchase is to order a title search. In the case of a bank foreclosure, there could be a host of other liens against the property. Unless all of these lienholders are named in the foreclosure action, their interests may not be extinguished by the sale. In addition to items like certain junior liens, like home equity lines of credit, there could be liens that actually have priority over the mortgage. Certain county and city liens will survive the foreclosure sale, like Cape Coral utility assessments.

Also, if the home is part of a Homeowners' Association (HOA), the new purchaser could be responsible for the underlying debt owed to the HOA at the time of sale. This amount has the potential to be many thousands of dollars.

Many of my clients have purchased foreclosures and have done well with them. A few buyers have come to our firm, after the purchase, surprised that they didn't buy the property free and clear. Even though there is a small cost involved in obtaining a title search, knowing what you are buying is key to a successful foreclosure purchase.

Eric P. Feichthaler has lived in Cape Coral for over 30 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Historical Museum, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 18 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator.

Mr. Feichthaler can be reached at, or (239) 542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.



I am looking for:
News, Blogs & Events Web