When purchasing a property, it is important to consider title defects in advance. These are issues with the title that could complicate the transaction or derail the sale entirely.
There are steps people can take to address these, such as purchasing title insurance or paying to have a home title search carried out. But what are some of the potential defects that buyers and sellers need to consider?
Property liens
One of the most common title defects is a lien on the property. This could be a mechanic’s lien, for example. Someone was hired to work on the property and was never paid, so they have a lien and the debt needs to be paid off before the property can be sold.
Unpaid taxes
A similar issue is when real estate taxes have not been paid. The same could be true for HOA assessments, as fees and dues need to be paid to the homeowners association. If these are outstanding, the debt often has to be addressed first.
Other owners
In some situations, it may turn out that multiple people own the same property. Say that a person passed away and left real estate to multiple siblings, who are now joint owners. If one of those siblings is trying to sell the property, they may not actually have the legal authority to do so without the involvement of the other owners.
Invalid documents
Finally, there can be issues with documents that are invalid or that have not been signed properly. If there are invalid signatures or questions of incompetency, this can further complicate the transfer.
Addressing common legal issues
Title defects can make the transaction more complex, but there are legal steps that can be taken to rectify them. Buyers and sellers need to know exactly what options they have at this crucial time.
