Oregon 30-Hour Real Estate Law Practice Test

What action is crucial for buyers to take in relation to existing liens on a property?

1. Ignore them

2. Get them cleared before closing

3. Transfer them to a new owner

4. Increase property insurance

The correct answer is: Get them cleared before closing

The action that is crucial for buyers to take in relation to existing liens on a property is to get them cleared before closing. Liens are legal claims against a property due to unpaid debts, and they can significantly affect the buyer's ownership rights. If a property has existing liens, the seller may not be able to convey clear title to the buyer. By ensuring that these liens are cleared before the closing of the sale, the buyer protects themselves from potential financial obligations that could arise from those liens—meaning they would not be responsible for past debts associated with the property. This diligence helps in preventing complications in property ownership and ensures that the buyer has the right to the property free of encumbering claims. Other actions, such as ignoring the liens, could lead to serious issues for the buyer post-purchase. Transferring the liens to the new owner is not a practical solution as liens are typically tied to the property rather than the owner. Increasing property insurance, while important, does not address the legal implications of existing liens and does not resolve the issue of encumbrance on the title.