Top 5 Common Title Issues and How to Resolve Them
Some of the more frustrating aspects of many real estate transactions revolve around hidden title issues that can quickly turn the process into a legal headache. A property's title is its legal record of ownership, and any unresolved claims, errors, or disputes can delay—or even prevent—a smooth transaction. From unpaid liens to boundary disputes, these issues can be complex, but they’re not insurmountable. In this article, we’ll explore five common title problems buyers and sellers may encounter and explain how they can be resolved to ensure a smooth and secure real estate transaction.
1. Unknown Liens on the Property
One of the most common and annoying title issues is the discovery of an unknown lien on the property. A lien is a legal claim placed on a property due to unpaid debts like taxes, contractor fees, or utility bills. Even if the debt belongs to a prior owner, it can still affect the property's title and prevent a clean transfer of ownership.
How to Resolve It:
Before closing on a property, a thorough title search should be conducted to uncover any existing liens. If a lien is found, a title service company or real estate attorney can help determine who is responsible for the debt and ensure it’s paid off before finalizing the sale.
2. Errors in Public Records
Small clerical mistakes in public records like misspelled names, incorrect property descriptions, or improperly recorded legal documents can cause significant title issues. While some of these errors may seem minor, they can be enough to cause confusion and delay the closing process.
How to Resolve It:
Again, a detailed title search should be conducted before purchasing a property. If errors are found, they can be corrected by filing the necessary documentation with the appropriate government office or, if necessary, through a legal process called a "quiet title action". Working with an experienced title service company ensures that any discrepancies are identified early and corrected before they become major obstacles in closing the transaction.
3. Undisclosed or Missing Heirs
This is something that is not often considered, but when a property owner passes away, their estate may be passed down to heirs through a will or intestate succession (if no will exists). However, complications can arise when unknown heirs come forward to claim ownership or when inheritance disputes create legal uncertainty over the title. In some cases, an heir may have been omitted from records, or a previous sale may not have been properly executed.
How to Resolve It:
A thorough title search can help identify potential heirship claims before a sale is finalized. In rare cases, if an undisclosed heir surfaces after the purchase, legal action may be necessary to resolve ownership disputes. Ensuring all past ownership transfers were legally documented is crucial for a clear and undisputed title.
4. Forged or Fraudulent Documents
Unfortunately, real estate fraud is a real issue with a real impact on property transactions. Forged signatures, fraudulent deeds, or falsified documents can create ownership disputes. A previous sale may have been conducted using fake documents, or someone may have illegally transferred the title without the rightful owner's knowledge. These fraudulent activities can lead to unexpected legal battles and financial losses.
How to Resolve It:
As with any potential title problem, the best way to protect against forged or fraudulent documents is by conducting a comprehensive title search early in the process. If fraud is suspected, legal action may be required to challenge the false claim and restore rightful ownership. Working with a reputable title service company ensures that all documents are verified and that the transaction is secure.
5. Boundary or Survey Disputes
Property boundary lines may seem straightforward, but a dispute over boundaries or surveys is one of the many things that can postpone or derail a real estate transaction. If an existing survey differs from recorded property lines or if a neighbor claims ownership over part of the land, buyers may face unexpected legal challenges, as well as frustrating and costly delays.
How to Resolve It:
It's essential to review the most recent land survey and compare it with the official property records. If a dispute arises, a new survey may be needed to clarify boundary lines. In some cases, legal agreements such as easements or boundary line adjustments can help resolve conflicts. Consulting with a title company or real estate attorney ensures that any boundary issues are addressed before closing, preventing costly legal disputes in the future.
The truth is that title issues can be complex and aggravating, but they don’t have to derail your real estate transactions. Issues like these and many others can be solved with the right expertise and preparation. Working with a trusted title service company to conduct a thorough title search and help resolve these situations is key to ensuring a smooth and secure property transaction and avoiding costly surprises down the road.