Legal Issues Buyers Encounter When the Property Has No Clean Title

A clean title is essential in all real estate transactions. Dealing with legal issues is the last thing you want to worry about since it can be lengthy and costly. What are some issues that may arise when there is no clean title? This post will explore these issues and what buyers need to know.

Common Legal Issues When a Property Has No Clean Title

Boundary Issues

The title shows the metes and bounds of the property. Situations such as mistakes from land surveying or encroachment issues of a neighbor can be stressful. If there are boundary disputes, having a clean title can help resolve them. However, there may be more questions if the title isn’t clean.

Heirship and Last Will Issues

Family drama is itself a messy problem. There are situations where a missing heir appears after the sale of the property. It is also possible someone might discover a will the owner made after a transaction. These two scenarios can pose a question about property ownership. You can avoid these situations if you do a thorough title search.

Liens and Debts

One of the common legal issues of having unclean title is liens. A lien is a claim against the property for an outstanding debt. Types of liens may include tax liens, mechanic’s liens, judgment liens, and mortgages. Liens typically transfer with properties. Buying a property with an unknown lien may result in the buyer taking responsibility for the debt.

Divorce or Separation Issues

Joint ownership of property among married couples may also lead to issues. For example, a couple might separate but haven’t finalized their divorce. One party to the couple might try to sell the property without the other’s knowledge. That could result in the purchaser facing claims from the spouse.

Fraud Issues

Buyers may encounter several fraud issues in real estate transactions. If there was ever a title transfer with forged documents or signatures, that could be an issue. In these cases, the seller might not have the legal right to transfer the title. If the legitimate owner comes forward, it could cause problems.

Public Records Issues

Issues with public records are possible due to human error. A clerk may wrongly spell a name or miss an essential detail in the title. These are just minor legal issues, but they can still cause delays in your real estate transactions.

You should never buy a property if the title is in question. However, a title search can detect most issues. The title company may even be able to help you resolve title issues.

Do you need a title search before buying real estate? Click here to contact First National Title & Escrow. Our title experts can perform a thorough examination to protect buyers. Reach out now to learn more about our services.

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