Anthony A. Nozzolillo, Esq.
A Contract of Sale is executed, a mortgage commitment issues, a Closing date is proposed, and then weeks pass with nothing accomplished. For the most part the cause has little to do with the transaction the parties negotiated; it is something recorded against the premises years earlier, by someone who has long since moved on, which no one examined until the Title Report was issued.
A title insurance company searches the public records for every instrument affecting the subject premises and sets forth what it locates as "exceptions" to the policy it proposes to issue. Until each exception is resolved, waived, or insured over, the lender will decline to fund. Four categories account for the overwhelming majority of delay, and in each instance the encumbrance has been of record long enough that the Seller has genuinely forgotten its existence.
The Satisfaction of Mortgage That Was Never Recorded:
A mortgage remains an encumbrance upon the premises until a Satisfaction is recorded. Payment of the underlying loan accomplishes nothing of record on its own; the mortgagee must execute the certificate of discharge and arrange to have it presented for recording in the county where the mortgage is recorded.
New York affords the mortgagee thirty (30) days from payoff in which to do so, and imposes a penalty where it does not: five hundred dollars ($500.00) where the certificate is not presented within thirty (30) days, one thousand dollars ($1,000.00) within sixty (60) days, and one thousand five hundred dollars ($1,500.00) within ninety (90) days. The obligation is set forth at Real Property Law §275 and at RPAPL §1921, both of which were amended in June of 2026. Where the premises consist of a one (1) to six (6) family owner occupied residential structure or a residential condominium unit, a mortgagee which fails for ninety (90) days following payment and request is liable for five hundred dollars ($500.00) or the actual economic loss sustained, whichever is greater.
Of greater practical value is a remedy which few invoke. Upon that same class of premises, where the mortgagee has failed to deliver the Satisfaction ninety (90) days after payment and request, an attorney at law may file an affidavit with the county recording officer upon payment of an additional fifty dollar ($50.00) filing fee, and the mortgagee thereafter has thirty-five (35) days within which to file a verified objection. That affidavit affords a route around an institution which has simply ceased responding, and it runs upon a clock which a Seller may set in motion well in advance of a Closing date rather than in the week preceding it.
The Judgment Against a Stranger Sharing the Seller's Name:
A money judgment is docketed by surname. Pursuant to CPLR §5018 the clerk's entry carries the name and last known address of the judgment debtor, the sum, the dates of filing and docketing, the court and county, and the debtor's trade or profession where the judgment so states.
A search conducted against a common surname accordingly returns every such judgment, the majority of which belong to other persons entirely; each must nevertheless be disposed of before the lender will fund, and the address, the stated profession, and the dates are the three items the record furnishes with which to distinguish them.
The lien is a durable one. Under CPLR §5203 a docketed money judgment binds the debtor's real property in that county until ten (10) years after the judgment roll was filed, and the court retains authority to extend it upon the creditor's motion. Ten (10) years is a sufficient interval that a Seller may have forgotten a judgment which is in fact his own, and clearing such a judgment is a negotiation concerning who satisfies it and when; that conversation proceeds far more comfortably before a Closing date has been fixed.
The Mechanic's Lien Arising From Work Long Since Completed:
Work performed upon the premises may ripen into a lien against it. Under Lien Law §10 the contractor files a notice of lien with the clerk of the county in which the property is situated, at any time during the progress of the work or within eight (8) months after completion of the contract or final furnishing of materials; where the improvement relates to a single family dwelling, that period is four (4) months rather than eight (8).
A filed lien endures for one (1) year under Lien Law §17, and the lienor preserves it either by commencing a foreclosure action and filing a notice of pendency, or by filing an extension with the same county clerk within the year. Single family dwellings are treated differently here as well, and it is the distinction most often overlooked: such a lien cannot be extended by filing at all, and may be continued only by order of the court.
A renovation completed in the spring is therefore capable of producing a lien in the following winter, and a Seller who paid his general contractor in full may nonetheless confront a lien filed by a subcontractor who was not.
The Notice of Pendency:
Where a pending action would affect the title to, or the possession, use, or enjoyment of real property, the plaintiff may file a notice of pendency under CPLR §6501; from the moment of filing it constitutes constructive notice to the world, and any person who thereafter purchases or lends is bound by whatever the action ultimately determines.
It is effective for three (3) years under CPLR §6513, and the court may grant an extension for a like additional period upon motion made before expiration and for good cause shown. A notice of pendency of record will halt a sale, as no title company will insure around litigation which has yet to be concluded.
The Estate Left Open in the Chain of Title:
Where a record owner died and the premises passed through an Estate, the search must demonstrate that whoever conveyed possessed the authority to convey.
New York confers that authority by default. Under EPTL §11-1.1, absent a contrary or limiting provision in the Will, the deed, the instrument, or the decree appointing him, a fiduciary is authorized to sell property of the Estate at public or private sale upon such terms as in his opinion will be most advantageous to those interested; the power does not extend to property which the Will specifically disposes of to a named beneficiary. Where that power is limited or absent, the Surrogate's Court may authorize a disposition under SCPA §1902, for the payment of administration expenses, funeral expenses, the decedent's debts (including judgments and other liens existing at the time of death, excepting mortgage liens), death taxes, or for any other purpose the court deems necessary.
What delays a Closing here is almost invariably paperwork rather than law: Letters which were never issued, an Estate which was never opened, or a deed executed by one (1) of several distributees.
In Summation:
Every one of the foregoing is discoverable well before the parties are bound, and every one of them requires longer to resolve than the Contract of Sale allows once the clock has commenced.
A Seller who has held title for twenty (20) years and refinanced twice has at least one Satisfaction worth confirming of record; a Seller bearing a common surname has judgments to distinguish; a Seller who renovated has a lien period which may yet be open; and a Seller who inherited has an Estate file which somebody must locate. It is several hours spent with a public record, undertaken at a point in the transaction at which there remains time to act upon what is found.
Be sure to consult a seasoned attorney at the earliest stage of any contemplated purchase or sale, and well before a Contract of Sale is executed.
DISCLAIMER: THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TO BE RELIED UPON AS LEGAL ADVICE. NO ATTORNEY CLIENT RELATIONSHIP IS CREATED BY THIS PUBLICATION. AN INDEPENDENT LEGAL OPINION SHOULD BE OBTAINED BY THE READER.