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Common types of title defects

On Behalf of | Apr 17, 2024 | REAL ESTATE LAW - Real Estate Law

Purchasing a piece of real estate is a significant investment that requires careful consideration and due diligence, especially when it comes to ensuring a clear and marketable title. A defective title could lead to unforeseen legal and financial consequences for a buyer.

If you are considering buying real estate, the following are types of title defects that you should watch out for.

Unreleased liens

If a title still carries unreleased liens from previous owners or creditors, it means there are outstanding debts attached to the property. These debts could include unpaid mortgages, taxes or contractor’s liens. If not properly addressed before the sale, these liens can result in legal claims against the property or even foreclosure leaving the buyer responsible for resolving the debts or facing the loss of their investment.

Undiscovered easements

Undiscovered easements pose another risk to buyers as they could restrict the intended use of the property or require the buyer to grant access to third parties. Easements grant someone other than the property owner the right to use a portion of the property for a specific purpose such as access to utilities or a right of way. If these easements are not properly disclosed or discovered during the due diligence process, it could lead to disputes with neighbors or utility companies affecting the property’s value and marketability.

Errors in public records

Public records such as county land records and property tax assessments are relied upon to establish and verify ownership rights to a property. However, these records are not immune to errors which can range from simple clerical mistakes to more significant inaccuracies in property descriptions or ownership information. These errors can lead to disputes over property boundaries, ownership or legal rights associated with the property.

Remember, when considering purchasing real estate, never underestimate the importance of ensuring a clear and marketable title. If you have any doubts or concerns about a property’s title, seek legal guidance promptly to address any issues before finalizing the transaction in question.