Except that the title insurance company should have asked for affidavits / representations/ warranties from the developer/ contractors to 'take off' that exception. If the developer's representative lied that often - then there's a fraud and possibly a racketeering charge waiting to happen here = fines and jail for the individuals involved. So we'll see about that.Not so simple. There is a standard exception in owners title policies for unfiled mechanics liens. People rarely proceed with the necessary steps eliminate that risk. There is still an opportunity to challenge the lien itself and hopefully the site work was done in connection with an improvements agreement otherwise the Township will not be involved. Stipulations and Waivers Against Liens should be something EVERY new homeowner inquires about. Why should contractors get stiffed? The home purchasers benefited from the work. Their quarrel is with the DEVELOPER. Good luck with that. And by the way this is why you should pay for an attorney to do your real estate closing. If he or she screws up at least you would have someone else to blame (and sue).
Besides - if that wasn't done, the first mortgage lender bank then would be exposed to being 'primed' by the Mechanic's Lien, so that its mortage would no longer be first but would be second [or deeper]. No bank should accept that - they should be insisting on that exception being removed before the bank accepts the title insurance policy. If they didn't, then they're in the soup as well, and with far more at stake than the homeowner. So I don't see the homeowners really at risk here - but a lot of other people - supposed 'professionals' in this business - are.