The process of buying or selling a property is not always easy. A problem with the title of the property is one of the biggest hurdles in a real estate deal. Title defects are legal issues that cloud ownership. Closing cannot take place until the issue is resolved.
Buyers and sellers often assume that the deal will be completed smoothly after the contract has been signed. But that is not always true. Title issues can delay a deal or, worse, completely derail it.
Take a look at the most common defects in title that can cause delays with real estate closings. Also, learn how to resolve these problems.
1. Liens on Property
A lien is the legal claim of a creditor on property. The property may be encumbered by a debt owed to a current or former owner, such as unpaid taxes, contractor bills, or mortgages.
All liens must be removed before a sale is closed so that the buyer has what’s called “clear title.”
Liens may appear unexpectedly, particularly if the previous owner failed to pay or incomplete records. A real estate attorney can assist by researching lien records and negotiating payoffs. They can also ensure that lien releases are filed properly to clear the title.
2. Missing Heirs and Unresolved Issues with Inheritance
A common title defect is inheritance. When a property owner dies without a will or an heir is overlooked during probate, there may be questions about who owns the real property.
Some cases may involve long-lost or unidentified heirs claiming ownership, causing a dispute which must be settled before the sale can proceed.
Real estate lawyers work with courts and probate records to confirm ownership, clarify heirship and resolve competing claims.
3. Boundary or Survey Disputes
Sometimes the problem is not ownership, but the exact location of the boundaries. When surveys are in conflict, or when fences, driveways or other structures encroach on neighboring land, it can cause a cloud to appear over the title.
A boundary dispute can cause disagreements, which may prevent a smooth close. Solving these disputes can require commissioning of a new survey or negotiating with neighbors. It may even be necessary to go to court in order to determine the property lines.
4. Public Records Errors
Even minor clerical errors in public records can cause delays. Misspelled names, inaccurate legal descriptions of property or filing errors can all be examples.
These issues may seem minor but they can create uncertainty regarding ownership rights. They must be corrected prior to closing. A real estate attorney can identify these mistakes and work with government offices to correct them.
5. Undiscovered Easements and Restrictions
A easement is a legal agreement that gives a third party the right to access a certain portion of a property. For example, utilities often have easements to allow them to install power lines and pipes.
Often, deed restrictions or easements are hidden in old records. They only become apparent during a title check. These restrictions or easements can delay or even prevent a closing if a buyer does not know about them or they have an impact on the intended use of he property.
A real estate attorney will review the title report and explain the impact of easements or restrictions on the property. They can also help resolve any issues which might interfere with a buyer’s plans.
It is important to address title defects early.
It’s not unusual to find title defects. It’s important to identify them early, usually by using a professional title check. Then work proactively before the closing date.
These problems can be solved, whether it is paying off an old lien or settling a boundary dispute. The earlier a defect is detected, the less likely major delays will occur.
It is important to ensure that the title is clear in order to protect your property rights and facilitate a smooth transfer. Understanding these common defects can help you prepare for a real estate transaction, and keep it on track.
This post was written by a professional at Bonardi & Uzdavinis, LLP. Bonardi & Uzdavinis, LLP is a boutique, full service law firm providing its clients with a wide range of representation. Our primary areas of practice include foreclosure lawyer Brandon FL, probate, personal injury, construction, and commercial litigation. If you are looking for a real estate attorney or personal injury attorney in Tampa Bay contact us today for a case evaluation today!
