Your home may be new to you, but every property has a history. And although a thorough title search can help uncover any title defects tied to your property, some things may be undiscoverable. And, subject to the terms of the policy, your title insurance provides protection for you from title problems that may become known after you close your transaction. Common title issues may include:
ERRORS IN PUBLIC RECORDS
To err is to human but when it affects your home ownership rights, those mistakes can be devastating. Clerical or filing errors could affect the deed or survey of your property and cause undue financial strain to solve them.
Prior owners of your property may not have been meticulous bookkeepers – or bill payers. And even though the former debt is not your own, banks or other financing companies can place liens on your property for unpaid debts even after you have closed on the sale. This is an especially worrisome issue with distressed properties.
While the chain of title on your property may appear perfectly sound, it’s possible that a prior deed was made by an undocumented immigrant, a minor, a person of unsound mind, or one who is reported single but is actually married, these instances may affect the enforceability of prior deeds, affecting prior (and possibly present) ownership.
When a person dies, the ownership of the home may fall to their heirs, or those named within their will. However, those heirs are sometimes missing or unknown at the time of death. Other times, family members may contest the will for their own property rights. These scenarios – which can happen long after you’ve purchased the property – may affect your rights to the property.
You may have seen several surveys of your property prior to purchasing, however, other surveys may exist that show differing boundaries. Therefore, a neighbor or other party may be able to claim ownership to a portion of your property.
Unfortunately, we don’t live in a completely honest world. Sometimes forged or fabricated documents that affect property ownership are filed with public records, obscuring the rightful ownership of the property. Once these forgeries come to light, your rights to the home may be in jeopardy.
When it comes to owning a home, three can be a crowd. At the time of purchase, you may not know that a third party holds a claim to all or part of your property – due to a former mortgage or lien, non-financial claims, like restrictions or covenants limiting the use of your property.
You may own your new home and its surrounding land, but an unknown easement may prohibit you from using it as you’d like, or could allow governmental agencies, businesses, or other parties, access to all or portions of your property. While usually non-financial issues, easements can still affect your right to enjoy the property.
When a property owner dies with no apparent will or heir, the state may sell his or her assets, including the home. When you purchase a home with such a history, you assume your rights as owner. However, even years later, the deceased owner’s will may come to light and your rights to the property may be seriously jeopardized.
FALSE IMPERSONATION OF PREVIOUS OWNER
Common and similar names can make it possible to falsely impersonate a property owner. If you purchase a home that was once sold by a false owner, you can risk losing your legal claim to the property.
PLAY IT SAFE
These and other issues are often covered by an Owner’s Title Insurance Policy. When you buy a home, make sure you’re protecting your investment with title insurance.