Title issues
Judgment lien against the seller
A docketed money judgment attaches to New York real property the seller owns in that county. Here is how it surfaces, how it clears, and who pays it.
What happens if there is a judgment against the seller?
Quick Answer
Lien · Blocks the closing until it is resolved
How is it found?
- The judgment search returns a docketed judgment against a name matching the seller in that county
- The search returns a name that only resembles the seller, which is the common false positive
- A federal tax lien or a state warrant appears alongside the docketed judgments
- An unpaid OATH or ECB penalty has been entered as a judgment and shows in the municipal search
How is it cured?
- Confirm identity first, because a same-name hit is more common than a real lien; an affidavit of identity resolves most of them
- Where the judgment is the seller’s, obtain a payoff figure from the judgment creditor and pay it from the seller’s proceeds at closing
- Record the satisfaction of judgment promptly so the docket clears rather than merely going quiet
- Where the judgment is contested, move to vacate it or bond it so title can pass while the dispute continues
- Where the judgment is stale, check whether the lien period has run before treating it as live
What does clearing it cost?
A same-name false positive costs an affidavit and the time to prepare it. A real judgment costs its full payoff, including post-judgment interest, which accrues and is why the figure is pulled close to the closing date rather than at contract. Vacating or bonding a contested judgment is motion practice.
Who pays for it?
The seller. A judgment against the seller is the seller’s debt, and the standard New York contract obligation to convey marketable title puts the cost of clearing it on the seller, ordinarily out of the closing proceeds.
Does a judgment against the seller stop the sale?
It stops a sale free of the lien, which is what the contract requires. In practice most sales still close on time because the payoff comes out of the seller’s proceeds at the table. The sale stalls when the payoff exceeds the equity, or when the seller disputes the judgment.
What if the judgment belongs to someone with the same name?
That is the frequent outcome, not the rare one. Judgment searches run by name, so a common name returns strangers. The fix is an affidavit of identity from the seller, supported by identifying detail, confirming the seller is not the judgment debtor. It is routine and it is not a defect.
Do unpaid OATH penalties become judgments?
Yes. An OATH or ECB penalty that goes unpaid, or a hearing that is defaulted, can be entered as a judgment the City enforces. It then surfaces in the municipal search like any other lien, and it is commonly satisfied or escrowed before a transfer closes.
What else should you read before closing?
In the glossary
- Judgment lienA lien created by docketing a money judgment against the owner. It reaches real property in the county of docketing and is a routine payoff item at...
- LienA claim against property securing payment of a debt. Liens rank by priority, and closing normally means paying or releasing every one ahead of the ...
- ECB judgmentThe judgment entered on an unpaid or defaulted summons heard at OATH (formerly ECB). It is a collectible City debt tied to the respondent and to th...
- Marketable titleTitle a reasonable buyer would accept, free of defects that would expose that buyer to litigation. Most New York contracts require the seller to co...
- Title searchThe records examination behind a title report, covering the chain of title, encumbrances and court filings against the owners. It precedes the comm...
- Escrow (at closing)Funds or documents held by a neutral party until stated conditions are satisfied. At a New York closing it usually means a holdback from proceeds u...
Questions this raises
- What happens if the title search finds a problem before closing?Schedule B-I requirements are the punch list, not a dead deal. How New York closings clear old liens, missing satisfactions and name hits before th...
- What does title insurance cover?Old liens, recording errors, forged deeds, undisclosed heirs, easements: what a New York title policy covers, what Schedule B excludes, and how cla...
- What is curative title work?Curative work clears Schedule B-I before closing: payoffs, missing satisfactions, heirship affidavits, ACRIS indexing fixes and escrow holdbacks in...
Title issues
- Unsatisfied mortgage of recordA paid-off mortgage with no recorded satisfaction still reads as a live lien in ACRIS. Here is how it is found, how it is cleared, and who pays for...
- Open permitAn open DOB permit is work the City still shows as unfinished. It rarely kills a NYC deal outright, but it moves the date and it follows the buyer.
The statute itself
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Legal Disclaimer: This page is general information about New York practice. It is not legal advice, it does not account for the terms of any particular contract, building or transaction, and reading it does not create an attorney-client relationship. This is attorney advertising. Prior results do not guarantee similar outcomes.