Minimize Your Risk

What are the most common title issues that lead to litigation?

On Behalf of | Jul 21, 2020 | Real Estate Law |

As a real estate professional, you want to help connect individuals with the best home possible. Unfortunately, sometimes, the people that you helped purchase the house later struggle to retain ownership of that property due to title issues.

When someone appears to have a legitimate claim to the title of a property now owned by someone you represented, that individual may need to hire an attorney to represent them in court and may have to defend their claim to the property.

Helping potential buyers often includes warning them that a property may be at risk for title issues in the future. What are some of the most common title problems that arise? 

Unrecorded liens can complicate ownership

Sometimes, there is a tax lien that isn’t on the public record. Other times, there may be a privately formed mortgage or even construction professionals who performed work on the property. Many times, these recorded liens require repayment in order for someone to maintain ownership of the property. It’s also possible that the title records didn’t show the current owner, which could lead to similar issues.

Improper estate administration can lead to claims

When there is real estate included in someone’s estate after they die, the executor may sell their property and then distribute the income from the sale. It’s also possible that one person might inherit the property after estate administration and decide to sell the property.

In either of these circumstances, if another heir who was not given proper consideration shows up later, they could potentially bring a claim against the property. There could also be a last will that wasn’t found at the time of estate administration that might later lead to challenges about how assets got distributed.

Forged documents or illegal deeds

When someone purchases a property, the kind of deed that the seller offers can influence how much security the new owner has. A quitclaim deed is the kind of deed most commonly associated with title fraud, as an individual can imply the sale of the property and take money from someone without ever having ownership interest in the property.

Proper title research and title insurance can protect your clients from these title issues by locating warning signs of future conflict and helping to resolve them before the transfer of ownership takes place.