Top 10 lists have been around for years and include different topics. From the best restaurants in the DMV to the worst candy bars ever created, a top 10 list is a great way to digest information quickly.
Today, Highland Title + Escrow brings you the 10 most common title problems. Our goal is to always avoid problems and correct errors for our clients while we work through each transaction, but something could surface even after closing. That is why you should always buy owner’s title insurance at closing. Check out these problems that could arise.
- Unreleased Mortgage: The most common title problem is a prior mortgage or deed of trust that was paid off but was never released from the courthouse records. Although this problem may be common, it can be difficult to resolve if the mortgage company is no longer in business. An owner’s title insurance policy covers such issues and often permits closing to occur without delay.
- Incorrect Property descriptions: These errors range from simple clerical errors or transposed numbers to descriptions that reference the wrong property. These errors in a deed of trust or mortgage could lead to the lender having an unenforceable lien. In a deed, these errors could lead to an inability to convey clear title.
- Judgments against Prior Owners: Judgments are indexed at the courthouse by the person’s name, not by the property. Thus, a judgment against a ‘James Smith’ would attach to any properties he owned in the county where the judgment was recorded. To make things more difficult, the judgment may not be against ‘our’ James Smith. Common names often lead to confusion regarding the applicability of a judgment to the property.
- Boundary and Survey Disputes: Fences or a line of trees aren’t valid markings of property lines. You may also share a driveway with a neighbor, but who actually owns the land underneath? It is important to secure a current, valid survey, or neighbors could dispute property lines. A survey done at the time of settlement is a good way to ensure the location of the property lines.
- Errors in Public Records Mis-indexing: Human error can occur through public record filing or clerical tasks. It could be an inaccurate property description or an unintentional misspelling. Problems can arise when these errors are discovered and eliminating the mistake cannot be done with an eraser. Once again, it costs time, effort and money.
- Fraudulent Deeds: These occur concerning vacant, neglected properties…usually in areas lightly populated. Scammers do their research to see if the property remains undisturbed for extended periods of time. These properties might be seen as fixer-upper opportunities, but no one, except the fraudsters, are keeping an eye on the home. They can create false documents, forge signatures, and sell the property as their own, and the settlement can be done before the rightful owners even know what happened.
- Missing Heirs: Every effort is made to clear a title in the case of death, but missing or unknown heirs could show up anytime…even after your settlement…staking claim to what you thought you owned. These heirs may be valid, or they could be fraudulent which can add another layer to the problem.
- Unknown Easements: According to Webster’s Dictionary, an easement is an interest in land owned by another that entitles its holder to a specific limited use or enjoyment. Choosing to build a deck or shed on an unknown easement could bring a lot of heartache down the line. An easement doesn’t mean the company owns that part of your property, but it does limit how you choose to use it.
- Forgeries: These happen when someone intends to commit fraud. They knowingly sign another’s name or alter a valid title. Because purchasing a home is a multi-step process through many entities, each step is an opportunity for a fraudster to step in when no one is paying attention. Referred to as “clouding title”, these fabrications affect who rightly owns the property. Some title insurance policies can protect you even if a forgery occurs after you purchase your property.
- Invalid Deeds: Real estate is conveyed by a certain contract between parties called a Deed. Common law requires that certain language is contained in a Deed in order for a property to be effectively conveyed. If this language is missing or if the deed is not signed properly, a transfer can be invalidated.
At Highland Title + Escrow, our experienced and seasoned professionals…some who have been with us for over a decade…are on the lookout for all of these problems from title order to closing. We are transparent and keep you informed throughout the entire settlement process. You aren’t just a file number here; you are the reason we are diligent and dedicated through every stage of the title search. Please contact us to get started today!