
Common Title Problems and How to Resolve Them
A property title proves legal ownership, but defects in the title can jeopardize a real estate transaction. Understanding common title problems and how to address them can help you avoid delays and legal issues down the road.
Liens
Liens are legal claims against a property, usually resulting from unpaid debts like mortgages, taxes, unpaid HOA dues or contractor fees. If unresolved, liens can prevent a clean transfer of ownership. To avoid lien defects, conduct a title search early in the home-buying process. The seller needs to clear liens, either by paying the debt in full or negotiating an alternative with creditors.
Public Record Errors
Clerical errors or inaccurate documentation in public records, such as incorrect property descriptions or misspelled names, can create legal challenges. Work with your title company to identify and correct the errors by filing a corrective document.
Disputes Over Ownership
If the previous owners passed away without a clear will or if an unknown heir surfaces, disputes can arise regarding rightful ownership. A thorough title search can uncover potential issues. In some cases, legal action may be required to resolve disputes before the sale can proceed.
Boundary Disputes
Conflicting property surveys or unclear boundaries can lead to disputes with neighbors over land ownership. To resolve this, hire a professional surveyor to clarify property lines. If necessary, you may be able to negotiate boundary agreements with your new neighbors.
One of the best ways to safeguard against title problems is by purchasing title insurance. This protects buyers and lenders from unforeseen title defects, ensuring peace of mind during and after the transaction.