A title search is a necessary step when purchasing a property. It not only reviews public records to verify legal ownership rights, but also uncovers claims, liens, or any other issues that may affect ownership transfer. A title search generally occurs before the transaction closes to ensure the new buyer receives a clear title for the property.
Fixing the problem depends on the issue at hand. Consulting with a trusted title agency in NJ can assist in resolving specific issues. More complex issues may require you to take legal action. To safeguard against undiscovered common title search problems, title insurance provides an added layer of protection for buyers.
What Are the Most Common Problems Found During Title Searches?
When purchasing a home, the sale can only close upon completion of a title search. Sometimes, this property ownership search unveils problems that can delay the transfer of title.
Liens
Liens are common issues that can affect a property’s title. They can originate from a range of unpaid accounts, such as loans and tax arrears. The values are linked to the property, not the owner who defaulted on these payments. Liens on property often create complications for new owners if left unresolved before the title transfers into the purchaser’s name.
How to Fix Liens
The first step is identifying the lien and its cause. You can clear it by paying the debt, negotiating a settlement fee, or using legal action. Once resolved, the lienholder files a release document, which goes on public record.
Deed Errors
A title deed is the official document stating the legal ownership of the premises. Inaccuracies can arise in the form of incorrect or missing information. A deed is also deemed invalid if it’s not signed correctly. These mistakes go unnoticed when filed, as the clerks often do not verify their accuracy.
How to Fix Deed Errors
For simple mistakes, filing a corrective deed can rectify the issue. For more complex problems, the new owner proceeds with court action through judicial reformation. A real estate attorney can guide you through the process and advise you on the correct legal steps to take.
Public Records Errors
Deeds are usually recorded at your local county government offices. Occasionally, the employees responsible for filing these documents can record incorrect information when entering data into the deed index. These could be spelling errors or a mistake in the address of the property.
How to Fix Public Records Errors
A corrective deed is a new document that formally corrects any mistakes on the paperwork. The new owner can file this deed, reflecting all the corrections, and register it at the same office as the previous, incorrect deed. In more complex errors, a quiet title action is a court proceeding that clarifies ownership.
Missing Owners
Beneficiaries with rights to the property may not present themselves until the closing of the transaction. This may occur when the owner of a property dies and the heirs are not notified about their inheritance.
How to Fix Missing Owners
To rectify a missing title heir after closing, the new owner must notify their title insurance company immediately. The agency requires all relevant documentation, including the title policy and deed. The insurance then investigates and handles the claim, and may take legal action to protect the ownership rights.
Unknown Encumbrances
An encumbrance is a claim from an external person that can limit the usage of a property. It can be monetary or legal, like a zoning law. An encumbrance similarly comes in the form of an easement, which could allow access to the property for some individuals.
How to Fix Unknown Encumbrances
Contacting a real estate attorney can help in understanding the problem and identifying available legal tools. Corrective measures could include a quiet title action, releasing the lien, or filing a corrective deed.
Boundary Disputes
Land surveying methods constantly change, and original legal borders may now contradict boundary laws. If property borders intervene with a natural element such as a water source, this may create disputes over property access.
How to Fix Boundary Disputes
Correcting a boundary dispute involves gathering the property’s documents as well as hiring a surveyor to obtain a definitive, professional boundary line. Negotiating with neighboring property owners can reach a mutually agreeable solution without the need for legal action. As a last resort, filing a quiet title action will allow the court to determine the correct boundaries.
Fraud
Fraud and forgery are significant problems in the real estate market. Criminals illegally transfer a deed through falsified documents in an attempt to steal money. The perpetrators often use fake identity documents to impersonate the legal owner of the property.
How to Correct Fraud
Immediately seeking legal counsel will initiate a court claim for forgery. Gather all property paperwork and file a police report. A legal professional is essential to guide you through the court process to restore your legal title.
The Importance of Title Insurance
While title issues may be uncovered during the title search process, some problems can go unnoticed. There are measures in place to allow property owners to fix title issues, although these may prove costly.
This is why title insurance is crucial when purchasing a property. It protects you from financial loss if unknown title issues arise, while providing peace of mind and ownership security. To protect your investment and ensure a seamless property transaction, contact Cortes and Hay, your reputable title agency in NJ.