The title is one of the key documents you need when selling your house. Title problems you encounter at closing can be a significant obstacle when attempting to buy or sell the property.
Unpaid debts, divorce settlements, boundary disputes, missing heirs, foreclosure, probate, family members, and even an oversight in the records can make determining who has the legal right to a home difficult. The only way forward is to ensure that all of these matters are handled before you transfer your ownership to a new owner- otherwise, it could lead to costly legal action.
Property title encompasses all its rights, which transfer from one person to another when the home is sold. Unaddressed common issues with titles can hinder closing on the house and even prevent it since problems may arise unexpectedly near completion.
Any potential title disputes should be handled beforehand to ensure a successful sale and conclusion of your real estate transaction. This article covers the most common title defects so you’ll know what to look for when selling your home.
Got Title Problems at Closing? Here’s What You Need to Know
Two common title problems frequently arise when transferring the title from seller to buyer: fraud and mistakes. While both can be difficult hurdles to overcome, they need not stand in the way of a successful transaction with due diligence and proper legal representation.
A title insurance policy or title policy may be a helpful tool for buyers in the closing process.
Common Title Issues You Need To Watch Out For
Every real estate has a story, and a title search can help reveal surprising details about the past. Depending on your policy’s conditions, your title insurance may protect you from any post-closing surprises regarding the property. In addition, here are some of the common problems you should look out for:
Chain of Title Document Errors
Before a buyer buys a house or property, inspecting the chain of title is necessary. Title businesses typically oversee this task for buyers and ensure that there are no liens present, all tax matters have been settled, and any judgments have been addressed before finishing the purchase. If some of these procedures still need to be completed or clarified, the title may have flaws that hamper your new property’s marketability.
Vesting Deed Errors
Vesting deed is the legal term used to denote the transfer of rights and ownership of real estate from the previous owner to the next. This process is essential in formalizing the title and possession of a property.
Despite the drafter’s due diligence, mistakes in real estate documents such as deeds are too common. A party’s name may be misspelled, or an address could contain wrong digits – even lengthy property legal descriptions can include typos of incorrect numbers and characters.
Mistakes in a deed can often be quickly remedied by getting the drafter to file an Affidavit of Scrivener’s Error. Such affidavits are sworn statements from the person who wrote the document, confirming and clarifying any errors they have made.
Scrivener’s Affidavits, Corrective Deeds, and Curative Notices are restricted in their legal implications: they can only adapt minor shifts with little consequences to the language of a transfer.
When it comes to altering the original intent of a legal document, like removing someone’s name from a deed, court intervention is necessary to reform or modify the instrument. Thus requiring a court decision for any changes that may need to be made.
Typo and spelling corrections can be trivial matters. Still, an error in a deed may have infinitely more severe legal consequences – such as when title to property is wrongly vested upon one or multiple parties.
Missing Mortgage Assignments
An assignment of mortgage is a legal expression that constitutes the transfer of your home’s security instrument, which corresponds to your loan. Once lenders decide to sell off a mortgage, investors can pick up on it and acquire the note for themselves; at this stage, the loan will be assigned to them.
Recorded Liens
If an individual has overdue property taxes, the entity they owe money can levy a tax lien on their property. This puts forth a legal claim of possession over the title deed; thus, whoever is owed any payment gains rightful ownership of the property.
Typically, a lien can only be removed once the debt has been paid off. If a seller’s name matched someone else who had unpaid debts, then it is possible that a judge could accidentally file a lien against their property.
Boundary Discrepancies
Conflicts between adjacent landowners are prevalent, and their causes can be myriad. These disputes have the potential to arise in any given situation.
If you feel your property rights are being violated or someone claims that you have infringed upon their rights, it would be wise to seek professional legal advice. Doing so will help ensure the situation’s outcome is favorable for yourself and all parties involved.
Generally speaking, these encroachment matters are categorizable into four types:
Access Disputes
If one requires access to a road or additional parking arises, their neighbor’s property may have to be crossed. This kind of boundary dispute can take place in rural areas and with businesses alike that require more room to expand.
Adverse Possession
Through adverse possession law, one neighbor can assume ownership of another’s real property if they have used it without interruption and in open sight for a specified time. If this is done without the owner’s consent or knowledge during that period, the user may lawfully claim title to the property.
Fences and Landscaping
When a neighbor alleges that another’s fence, landscaping design, or structures have overstepped the boundary line, it creates an even more complicated dispute. Not only must disagreements be settled related to the location of boundaries but also regarding what should come next with any items found on the improper ground.
When confronted with fences, grounds, and outbuildings that cross the boundary line onto a neighbor’s property, various solutions are available to neighbor property owners.
One solution to fix the improper placement of an improvement is to eliminate the offending structure. A second potential option is granting a license or easement from the property owner on whose land it was installed – allowing them to keep their installation in place. If all else fails, selling off that portion of land may also be feasible – permitting its rightful owner access and freedom with their development.
Lot lines
Amid real estate sales, lot line disputes are all too common. To avoid such disagreements in the future, obtaining a survey is necessary – though this can often result in surprising findings as to where exactly the boundary lies. Often these discoveries will cause understandable conflict over the correct placements of property lines.
When neighboring property owners disagree over where their lot line lies, they can proactively determine the exact boundaries. By obtaining original property records from the correct official office and utilizing those documents to acquire an accurate survey, they can identify where each neighbor’s property starts and ends. Once that is established, all related proceedings may progress as initially intended.
What To Do If You Come Across a Title Error
Depending on the state you live in and any mistakes made on a deed, it may be possible to rectify the problem. Instruments are available that can help address this issue; each will be lodged publicly alongside the original erroneous title document.
Instead of replacing or nullifying the incorrect deed, these documents are documented in public records concerning the faulty title. A real estate lawyer or qualified title agent can assess the proper instrument for resolving a mistake.
Corrective Deed
A corrective deed is an official document registered in the public record, removing undiscovered flaws in a previously filed deed. This instrument confirms and perfects the title without conveying it on its merit.
Affidavit of correction or scrivener’s affidavit
An affidavit can, in some instances, be an alternative to a corrective deed for curing defects. This document notifies of any mistakes found in the recorded deed. It is typically used for minor errors such as misspelling a subdivision or failing to include marital status within the legal description.
Making changes to a document is possible with the proper measures in place, even if you are not one of the original parties. As long as an explanation for why it needs correcting and evidence of notification reaches those involved or their successors, this can be done via affidavit, which must have been signed off by the lawyer who initially prepared said deed.
Warranty or quitclaim deed
A property buyer will get the utmost assurance with a warranty deed. The seller of this deed pledges not to hold anyone responsible for any title disputes that may arise in the future, making it an invaluable tool worth having.
A quitclaim deed is a sought-after document when transferring real estate without exchanging money; however, it does not provide any guarantees to the person receiving the property. By signing a quitclaim deed, an owner of the property transfers any personal interests, they have in the respective property to another individual.
Conclusion
Before you can sell your home, all title issues must be addressed. Though the following list highlights some of the most common problems, it isn’t exhaustive.
While other issues may arise, all must be attended to. Mastering the process of rectifying title problems is an uphill task and often necessitates expensive procedures; it may even require hiring an attorney.
Many homeowners need to be made aware of the potential for title issues. A prudent place to start is with a title search. If an issue arises, you may need to contact a reputable title company or even a real estate attorney depending on the severity of the problem.
If taking on the hassle of securing a clear title seems time-consuming and the costly task feels overwhelming, then We Buy Houses For Cash may be the perfect solution. We can purchase houses with title complications to save you from any future headaches. An additional benefit is that you won’t have to wait long for an extended real estate closing or Realtor commissions.
In most cases, we’ll pay off closing costs too!
We Buy Houses For Cash offers a risk-free solution to those wanting to sell their home quickly and reasonably. Save on title company or attorney fees, get a fair cash offer immediately, and have peace of mind that any potential title problems will be avoided.
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