When you're in the process of buying a home, you should do a title search to make sure that the owner will be giving you a marketable title. A marketable title has no liens or other encumbrances that could cause you legal problems. However, even with a title search and other due diligence, title problems still can come up after you finalize the sale. Here are six title issues that could cause you legal problems in the future.
1. Errors in the Records
The property's records must be precise and accurate to avoid issues down the road. Even a small error or two on a document could make things difficult. Also, filing issues and missing paperwork can lead to problems with determining the ownership or finding liens against the property.
2. Hidden Agreements to Use the Property
Another property owner or entity may have made an undocumented agreement with one of the previous owners about the use of the land. Many times, these agreements are done casually and without much thought.
Such agreements may include such things like allowing an adjacent owner to have an easement or access to one part of the property or allowing a building or other structure placed on the land. However, such easements or uses may directly interfere with your quality of life down the road.
3. Liens and Other Claims
A title search should uncover any possible liens or claims on the property. The current owner should resolve, or satisfy, all liens on the property before the sale unless you arrange another agreement. However, some liens may have been forgotten about, not recorded, or are so new that they don't appear.
An example of this is a lien for recent work done on the home in which the contractor did not get around to placing a lien on the property until after it was sold.
4. Multiple Conflicting Boundary Surveys
While you may have done your due diligence and checked your property's survey and boundary lines, you still could have issues. Other hidden surveys on that same property could affect your use of the land. These surveys could show up later to cause legal issues if one of your neighbors want to use or build a structure on what they think is their property.
5. Previous Owner Did Not Own the Property
The person selling you the property may have no right to sell it. Sometimes, it's a case of outright impersonation by someone with a similar name.
However, sometimes someone might think they had a legal right to sell but weren't the actual owner. This may be the case with family members or between divorced couples. In cases like these, the owner may make a claim on the property after it has been sold.
6. Forged or Falsified Paperwork and Illegal Deeds
You may find forged paperwork or illegal deeds that could affect whether or not the current owner actually owns the property. If a previous deed was created by someone who was not legally able to draw it up, then subsequent ownership could be invalid.
Even if the forgery or illegal deed was from several owners ago and the current owner bought the land in what he or she considered good faith, these problems could still haunt you in the future.
Generally, many of these types of title problems can be taken care of through your title insurance. However, work with an attorney that is familiar with real estate title issues for the best results.
Cofield Law Firm can help you with your real estate contract and closing issues. We can assist you with searching for your property's documents