LA County Tax Lien for previous owner's tax obligation

[ZentRose]

I am in the process of selling my airplane to make room for a Mooney. In the process of selling my airplane, the escrow service discovered a tax lien on it from LA county. I purchased this airplane in August of last year and there were no liens when I purchased it. The tax lien was applied in January of this year under the previous owners name.

I cannot get ahold of the previous owner and LA county will not give me a release of lien if I pay the tax bill (needs to be previous owner). The escrow service, aero space reports, was not helpful. I am thinking my best option is to go in to the tax assessor's office with cash and the title search paperwork and just claim that I am the previous owner so that I can obtain the lien release to move forward with the sale. 

I am wondering if there is a better way to deal with this type of situation?

Thanks! 

[midlifeflyer]

The best way to deal with this situation is to consult with a California attorney. Even though this is a persona property lien, the ones who do real estate work, where they deal with tax liens all the time., would probably be a good choice, even if not aviation-savvy. (If you are a subscribe to AOPA PPS, your benefit might take care of the legal costs.) They can consult with the escrow company about whether anything and if so what needs to be filed with the FAA Registry.

 

[Marc_B]

@ZentRose Are you sure that the tax bill is even valid?  I purchased my aircraft from an owner in California and received a tax bill for the next two years that I had to call each year and send then information confirming that I live in another state, pay hangar fees in another state and haven't been back to California.  There's a chance that it was just California continuing to expect money from the old owner.  You may be able to call the tax assessor's office and track down what information would be needed to confirm the tax bill is invalid, if so.

[EricJ]

On 5/22/2023 at 6:49 PM, ZentRose said:

I am thinking my best option is to go in to the tax assessor's office with cash and the title search paperwork and just claim that I am the previous owner so that I can obtain the lien release to move forward with the sale. 

That sounds like it could be interpreted as fraud.   You probably don't want to go there.

[ZentRose]

On 5/23/2023 at 5:36 AM, midlifeflyer said:

The best way to deal with this situation is to consult with a California attorney. Even though this is a persona property lien, the ones who do real estate work, where they deal with tax liens all the time., would probably be a good choice, even if not aviation-savvy. (If you are a subscribe to AOPA PPS, your benefit might take care of the legal costs.) They can consult with the escrow company about whether anything and if so what needs to be filed with the FAA Registry.

 

I went through an attorney and sent a demand letter. They won't be able to resolve the lien until July.

On 5/23/2023 at 6:21 AM, Marc_B said:

@ZentRose Are you sure that the tax bill is even valid?  I purchased my aircraft from an owner in California and received a tax bill for the next two years that I had to call each year and send then information confirming that I live in another state, pay hangar fees in another state and haven't been back to California.  There's a chance that it was just California continuing to expect money from the old owner.  You may be able to call the tax assessor's office and track down what information would be needed to confirm the tax bill is invalid, if so.

It is not valid, I sent in all the required documentation to fix this but the timeline isn't going to work for the pending sale. Glad you were able to get your situation resolved. 

On 5/24/2023 at 12:54 PM, EricJ said:

That sounds like it could be interpreted as fraud.   You probably don't want to go there.

Paying cash was the suggestion from the tax assessor.

 

 

 

[Justin Schmidt]

6 minutes ago, ZentRose said:

Paying cash was the suggestion from the tax assessor.

 

 

 

Bet it was so they could pocket it

[PeteMc]

On 5/22/2023 at 6:49 PM, ZentRose said:

The escrow service, aero space

 

On 5/22/2023 at 6:49 PM, ZentRose said:

title search paperwork

Call Aero Space and tell them they can supply an Attorney at their cost to deal with this lien or you'll get one and anything you pay for the lien and the Attorney's fees will come back to them.  This is exactly why you pay for the Title Search in the first place.

[ZentRose]

I ended up driving to LA on Friday and paying off the lien in cash. The lien release was sent off to aerospace and they will clear the title. The attorney route was going to cost more than just paying the bill. 

[jetdriven]

On 5/26/2023 at 2:59 PM, PeteMc said:

 

Call Aero Space and tell them they can supply an Attorney at their cost to deal with this lien or you'll get one and anything you pay for the lien and the Attorney's fees will come back to them.  This is exactly why you pay for the Title Search in the first place.

You'll find that the warranty the title company offers is the same warranty the Carfax offers for vehicles. If the lien was recorded at the time they did the search they will warrant it but if it comes in later, they won't.  And right  now, FAA liens  are taking several months to record, so there's probably gonna be a lot more of this. 

[exM20K]

12 hours ago, jetdriven said:

You'll find that the warranty the title company offers is the same warranty the Carfax offers for vehicles. If the lien was recorded at the time they did the search they will warrant it but if it comes in later, they won't.  And right  now, FAA liens  are taking several months to record, so there's probably gonna be a lot more of this. 

This is the problem, right here.  It’s tough for the buyer, impossible for the title company, and not the fault of the entity filing the lien.  This sort of bureaucratically induced latency raises costs and risk for all parties and is entirely at the feet of OKC.

-dan

[midlifeflyer]

16 hours ago, ZentRose said:

I ended up driving to LA on Friday and paying off the lien in cash. The lien release was sent off to aerospace and they will clear the title. The attorney route was going to cost more than just paying the bill. 

That makes sense. I got the impression from your earlier post that the problem was, they would not accept the payment. Of course paying it is often the least expensive alternative.

[midlifeflyer]

14 hours ago, jetdriven said:

You'll find that the warranty the title company offers is the same warranty the Carfax offers for vehicles. If the lien was recorded at the time they did the search they will warrant it but if it comes in later, they won't.  And right  now, FAA liens  are taking several months to record, so there's probably gonna be a lot more of this. 

The typical title exam by a aviation title/escrow  company is just that, a title examination. It's not title insurance. You can buy title insurance but it's an additional charge.