When buying or selling a home, there’s no shortage of paperwork, processes, and fine details that can impact your transaction. One often-overlooked yet crucial document is the 45-Day Notice of Intent to Sell. While it may not be legally required in every transaction, failing to file this document could lead to significant delays, added risks, or even derail your sale altogether.
Let’s break down what this document is, why it’s important, and how it can save both buyers and sellers from unnecessary headaches.
What Is a 45-Day Notice of Intent to Sell?
A 45-Day Notice of Intent to Sell is a simple document that:
- Is filed with the recorder of deeds office for the county in which the property is located.
- Must be posted prominently on the property (e.g., in a visible spot inside the home).
This document serves an important purpose: It alerts contractors, suppliers, and anyone else who has worked on the property that the owner intends to sell the home. It also provides these parties with a specific time frame — 45 days — to file a mechanic’s lien if they have not been paid for their work or materials.
Why Does It Matter?
While this step is not legally required for all transactions, it may be a requirement from your title company. If the document is not filed, the title company may:
- Delay the closing until extensive documentation is provided, showing all contractor bills have been paid.
- Require affidavits from all contractors who worked on the property.
In some cases, this additional documentation can be time-consuming and difficult to gather, particularly if the property was remodeled or underwent repairs recently.
For buyers, especially those purchasing new construction or a recently remodeled home, it’s wise to ask for verification that a Notice of Intent to Sell has been filed. This ensures there are no lingering financial claims on the property that could complicate the transaction or create risks post-purchase.
A Real-Life Example
To illustrate why this document is so critical, let me share a recent experience with a transaction involving a novation property—a type of deal similar to a foreclosure or wholesale transaction.
In this case:
- The seller and their agent were unfamiliar with the 45-Day Notice of Intent to Sell, so the document was never recorded.
- Financial records for the partially completed flip were not available, raising concerns about unpaid contractors or suppliers.
- Materials and appliances were left in the home, but the work remained unfinished, further increasing the risk of unpaid claims.
This situation led to several complications:
- Impact on the Purchase Price: With the added risks, the buyer adjusted their offer to reflect the potential for unpaid liens.
- Delays in Closing: The absence of the notice caused delays as the buyer conducted additional due diligence.
- Choice of Title Company: The buyer had to select a title company that could close the transaction despite the missing notice, impacting the quality of services and title insurance coverage provided.
- Additional Due Diligence: The buyer and their agent had to spend extra time verifying contractor payments and negotiating terms to reduce risk.
Advice for Sellers and Agents
To avoid similar pitfalls, here’s what sellers and agents need to know:
- File the Notice Before Listing: Filing the 45-Day Notice of Intent to Sell before listing the property can save time and avoid delays.
- Work with Your Title Company: Check with your title company early in the process to determine if this document is required.
- Keep Records Organized: Maintain clear records of all payments to contractors, suppliers, or anyone else who worked on the property.
Advice for Buyers
Buyers should:
- Ask for Verification: If you’re purchasing a new build, a recently remodeled property, or a novation property, verify with the seller or their agent that the notice was filed.
- Choose the Right Title Company: Work with a title company experienced in handling transactions where this document is missing.
- Understand the Risks: Discuss with your agent how the absence of a 45-Day Notice of Intent to Sell might affect your purchase price, closing timeline, or title insurance.
The Bottom Line
The 45-Day Notice of Intent to Sell might seem like a small detail, but it plays a big role in ensuring a smooth and secure real estate transaction. For sellers, it can prevent unnecessary delays. For buyers, it provides peace of mind by reducing the risk of unpaid liens.
If you’re buying or selling a property and have questions about this process—or if you’re navigating a unique transaction like a novation property—I’m here to help. Let’s work together to ensure a seamless experience for everyone involved.