Several obstacles can stand in the way of a clear title transfer. Companies like Premier Closing Services can help identify and resolve these issues during the closing process to help protect the new ownership and ensure a smooth closing process.
Here are some of the most common issues we see:
If the seller has unpaid debts or taxes, the company or entity they owe can place a lien on the property, meaning that whoever is owed the money puts a legal claim of ownership on the title of the home. Usually, the lien can’t be removed until the debt is repaid. The most common types are liens are Real Estate Taxes, Mortgages, Home Equity Lines of Credit, Judgments, and Federal or State Tax Liens.
2. Unclear boundaries
Adjacent properties can have unclear boundary lines, leading to a dispute. A neighbor or public entity may be able to claim part of the property if it looks like it encroaches on other lands. If either party is aware of any issues, they should share the information with their closing agent. These matters are not always shown in public records but could be a threat. A Survey could be ordered to provide more details as part of the closing process.
3. Illegal deeds, forgery, and fraud
A previous owner or fraudster may have documented their title illegally so they could sell the property, which could lead to paying off someone you’re not supposed to.
4. Estate problems or missing heirs
When a piece of property is part of a deceased person’s estate, conflict may arise over which heirs have an ownership right and if one trumps another. Family members who were missing at the time of death might eventually step forward to claim their inheritance or contest the owner’s will for ownership.
5. Public Record Errors
Problems can arise when there are mistakes in the property’s deed. If there is a clerical error or missing information, the deed must be fixed and re-filed before the closing.