These are 10 most common title issues that could cost you money down the road and possibly put your ownership rights at risk. They could also blow up your current real estate transaction. Make sure your agent reviews and explains your title report with you.
- Errors in Public Records
Mistakes happen every day, but when errors affect your homeownership rights, it can be devastating. Something as simple as a filing error or a mistake in a former deed or survey could create financial hurdles down the line.
- Unknown Liens
Prior owners of your property may not have been meticulous bookkeepers – or bill payers. And even though the former debt is not your own, banks or other financing companies can place liens on your property for unpaid debts even after you have closed on the sale. This is an especially worrisome issue with distressed properties.
- Illegal Deeds
While the chain of title on your property may appear perfectly sound, it’s possible that a prior deed was made by a minor, a person of unsound mind, or one who is reported single but in actuality married. These instances may affect the enforceability of prior deeds, affecting prior (and possibly present) ownership.
- Missing Heirs
When a person dies, the ownership of their home may fall to their heirs, or those named within their will. However, those heirs are sometimes missing or unknown at the time of death. Other times, family members may contest the will for their own property rights. These scenarios, which can arise long after you’ve purchased the property, could affect your rights to the property.
- Forgeries
Unfortunately, we don’t live in a completely honest world. Sometimes forged or fabricated documents that affect property ownership are filed within public records, obscuring the rightful ownership of the property. Once these forgeries come to light, your rights to your home could be jeopardized.
- Undiscovered Encumbrances
When it comes to owning a home, three can be a crowd. At the time of purchase, you may not know that a third party holds a claim to all or part of your property due to a former mortgage or lien. Or non-financial claims by another party could exist such as restrictions or covenants limiting the use of your property.
Con’t.
- Unknown Easements
You may own your new home and its surrounding land, but an unknown easement could prohibit you from using it as you’d like, or could allow government agencies, business, or other parties to access all or portions of your property. While usually non0financial=, easements can still affect your right to enjoy your property.
- Boundary Disputes
You may have seen several survey of your property prior to purchasing, however, other surveys that show differing boundaries may exist. That means a neighbor or other party may be able to claim ownership to a portion of your property that you thought was yours.
- Undiscovered Will
When a property owner dies with no apparent will or heir, the state may sell his or her assets, including the home. When you purchase such a home, you assume your rights as owner. However, the deceased owner’s will could come to light, even years later, and your rights to the property could be seriously jeopardized.
- Impersonation of a Previous Owner
Common and similar names can make it easier for someone to impersonate a property owner. If you purchase a home that was once sold by a false owner, you risk losing your legal claim to the property.
So how do you protect your investment? That’s where and why title insurance comes in. Title insurance policy is a one-time cost that can give you priceless peace of mind.
