Title Order Form
Amid the excitement of buying a new home, few people anticipate the curveballs that common title issues can create.
Title issues can be the source of significant headaches for both homebuyers and sellers.
These complications can delay or even derail property transactions, resulting in frustration and financial losses. To help you navigate the often-complex world of real estate, we have created the following article. You’ll find the primary reasons title problems occur, along with eight common title issues that could spell trouble.
Why do title issues occur?
Title issues are common in real estate transactions due to the complex nature of property ownership and the historical records associated with it. Several reasons contribute to their prevalence:
- Historical Records: Property ownership history can span decades or even centuries, with numerous changes in ownership, land use, and legal regulations. This historical complexity can lead to discrepancies, errors, and omissions in title records.
- Human Error: Title records are maintained by humans, and errors can occur when deeds, mortgages, or other documents are filed, recorded, or transcribed.
- Unresolved Disputes: Legal disputes over property boundaries, easements, or ownership can linger for years, causing issues that resurface during a sale.
- Forgery and Fraud: Unfortunately, not all transactions are honest, and forgeries or fraudulent documents can be used to alter property records.
- Overlooked Liens: Liens, such as unpaid taxes, judgments, or contractor fees, may not be discovered until a title search is conducted, causing complications for the buyer.
Home buyers should be vigilant about preventing title issues because they can have serious consequences, such as disputes over ownership. financing hurdles, property use limitations, and financial loss, among others. A clean title ensures peace of mind, knowing that you have a legally recognized right to the property without the risk of unforeseen claims.
Be On the Lookout for These Eight Common Title Issues
1. Unpaid Liens
When there are unpaid claims or debts against a property, such as outstanding taxes, judgments, or unpaid contractor fees, it’s cause for concern. Buyers can inherit these debts if they’re not addressed before the sale.
The resolution: The seller must clear these liens before the property can be sold.
2. Errors or Omissions in the Deed
Mistakes or missing information in the property’s deed, like incorrect names or descriptions, can lead to disputes over property ownership.
The resolution: The deed must be corrected through appropriate legal procedures.
3. Boundary Disputes
These conflicts over property lines often result in disagreements with neighbors. Legal battles can arise over who has the right to use or own specific portions of land.
The resolution: A surveyor may be needed to clarify the property boundaries and legal action might be required.
When non-owners are granted rights to use a property, such as for access or utility maintenance, it is known as an easement. They can limit the property’s use or development potential.
The resolution: Negotiate with the easement holder or seek legal advice to modify or terminate the easement.
5. Missing Heirs or Unknown Wills
When heirs are unaccounted for or wills are undiscovered, it can lead to legal complications and uncertainty regarding the property’s rightful owner. This ambiguity can result in delays, disputes, or even the possibility of a previous heir or beneficiary coming forward to claim the property. As a result, potential buyers may face difficulties in obtaining title insurance or securing a mortgage, and the entire purchase process may become prolonged and complicated.
The resolution: A thorough title search can help identify potential heirs and resolve any issues.
6. Forgery and Fraud
False documents or forged signatures in the chain of title can result in ownership disputes, potential lawsuits, and even criminal charges.
The resolution: Legal action may be required to clear the title and prosecute forgeries or fraud.
7. Unresolved Property Disputes, Such as Divorce
When a divorcing couple does not reach a clear agreement regarding the distribution of their marital property, including the family home, it can result in a clouded title. This means that the legal ownership of the property is unclear, as both spouses may retain a claim to it. Prospective buyers may encounter difficulties when trying to obtain title insurance or secure a mortgage.
The resolution: Seek legal counsel to resolve the disputes and obtain a clear title.
8. Undiscovered Encroachments
When a neighboring property or structure infringes onto the subject property, it creates a host of potential headaches. Property value can be affected, and legal action may be necessary to resolve the issue.
The resolution: A survey can identify encroachments and negotiation or legal remedies can address the problem.
To avoid these common title issues and the headaches they can cause, it’s essential to work with a reputable title company. They will conduct a thorough title search and can provide title insurance to protect both buyers and sellers from unforeseen problems. Understanding and addressing title issues early in the process can save you time, money, and frustration.
Don’t let title issues delay your closing or put your real estate transaction at risk. From identifying title defects and errors in public records to resolving boundary disputes and other legal issues, Certified Title will protect your investment now and into the future. Contact us today to get started.
About Certified Title Corporation: Since 1994, attorney-owned Certified Title Corporation has been furnishing residential and commercial real estate stakeholders across the nation with robust title insurance, settlement, and escrow services. Renowned for its industry-leading reliability and exemplary level of service and quality, the Maryland-based company helps clients from all walks of life achieve their asset goals. To learn more, call (888)486-5511 or visit https://www.certifiedtitlecorp.com/.