In Colorado, what must a buyer know about liens on title?

• A. Existing liens are shown on the title commitment; buyer should understand what is encumbering the property and how it will be paid at closing
• B. Liens are not disclosed until after closing
• C. Liens cannot affect closing
• D. The title commitment omits lien information

Answer: (A)

In Colorado, liens on title are shown in the title commitment you receive during escrow. This document outlines what currently encumbers the property—mortgages, tax liens, HOA charges, judgments, and other encumbrances—and the conditions for insuring the title. The buyer should understand what encumbers the property and, crucially, how those liens will be paid at closing. Typically, the seller provides payoff amounts or funds are allocated from the closing proceeds so that those liens are satisfied as a condition of the transfer. If a lien isn’t cleared, it can cloud the title or prevent the transfer of clear title, which is why the title commitment serves as the roadmap for addressing liens before closing.