I am purchasing a real estate property. But we found the seller has a judgment of more than 800K against it. The purchase price of the property is 460K. We received a letter stated "I am providing you an unsigned copy of warranty of Satisfaction of judgment against xxxx (seller), which we will file with the superior court of new jersey upon confirmation that funds in the amount of $50,000 have been received by Bank ABC from the sale proceeds of xxxx's (seller) property which you are handling"
Can we proceed with our closing with this unsigned warrant of satisfaction ? What else can protect us if the seller did not pay the $50,000 he receive at closing to Bank ABC ? Will we liable for that amount if this ever happen ?

Who is handling the closing for you? An attorney? A title company?

Here's how it should work: the person handling the closing for you should arrange with the judgment holder that a SIGNED warrant of satisfaction shall be sent to the closer immediately and is to be held by the closer in escrow until closing. At the closing, the closer will deduct the $50,000 from the seller's proceeds and send it to the judgment holder. Once the money is sent then the closer can have the warrant of satisfaction filed.

Yes, my attorney handling the closing. My attorney told me he can't hold the escrow that's why it make me feel very uncomfortable. He is telling me he trust seller's attorney will send the proceed to the bank. I am wondering if there is any law prevent my attorney to escrow that money.

My attorney told us they can not SIGN warrant of satisfaction unless they received the money, first. Does it make sense ?

I don't know of any law that would prevent your attorney from holding the warrant of satisfaction in escrow until the money is sent to the judgment holder. However if the judgment holder is a bank, and the bank has sent something in writing stating that they will issue the signed warrant upon receipt of the money, then you are fairly well protected. That type of procedure (seller's attorney sending the payoff, bank then sending signed document after receipt of payoff) is standard practice when a developer is paying off a construction loan on a lot-by-lot basis at closings. Your situation sounds very similar.

The content of the letter we received from bank's attorney as below :

WARRANT TO SATISFY JUDGMENT to the clerk of the above named court:

WHEREAS, judgment from New Jersey was registered in the avove entitled action in the Superior Court of New Jersey on mmdd, ccyy in favor of ABC Bank, plaintiff, against (seller), defendant, in the amount of 850,000.00 under judgment number xxxxxxxx.

NOW THEREFORE, this is your warrant and authority to entr on the aforesald record, this satisfaction of judgment.

f
Xxxxxxxxxxxx
Attorneys for Plaintiff

The above letter do not have any signature. Can we count on this document to proceed with our closing (even is not been signed) ?

Yes, everything should be OK. Once the bank receives the payment from the seller's attorney they will send the signed warrant of satisfaction to either your attorney or the seller's attorney and then it will be filed. Since you have those instructions in writing from the bank they are bound by them.

I really appreciate your answers.

My pleasure. That's what we're here for. :)