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What Problems Can Make A Title Defective?

On Behalf of | Jul 5, 2023 | Real Estate Law

Owning property could be complicated. Multiple parties could have a hand in facilitating transactions when buying property. However, development issues could happen even before finalizing the purchase. These problems could go undetected until later, causing stress for the buyer. These issues include title defects.

These are problems concerning the title, including legal ownership or claims made by other people on the property. Owners could detect these issues in a title search. However, these problems might go undetected for various reasons, including lack of documentation. Still, a title report could provide valuable information that could signify red flags of a defective title.

The following problems found in title searches could indicate defects:

  • False documents: The title report could show fake or fraudulent records, complicating the purchase process. This issue could also make it challenging to trace the actual property owner.
  • Various disputes: Conflicts concerning boundaries and lines have documentation. These disputes could affect the property’s value, making them vital for buyers and owners.
  • Estate affairs: Sometimes, an heir beneficiary might make an ownership claim. This issue is crucial because it could impact current and future ownership.
  • Record errors: Clerical mistakes could have severe repercussions, affecting the title or deed’s validity.
  • Encumbrances: These issues might not affect ownership but could reduce the property’s value.
  • Outstanding liens: If this problem is present, an entity might have used the property as collateral for one of the previous owners’ debts.
  • Fraudulent identity or impersonation: Someone might make legal claims on the property if an impersonator sold it at some point.
  • Building code violations: A title might be defective if the property has recorded unresolved violations.

Additionally, local laws could apply regarding legal concerns involving property titles.

Protection against title defects

Unfortunately, these title problems could lead to legal costs, depending on the circumstances. Some matters involve the developers and require more work. These situations could necessitate sound legal advice, specifically on real estate law. Buyers could also obtain title insurance to receive protection if they face title-related claims later.