Ever wonder why you need title insurance? Your home may be new for you, but every property has a history or prior ownership. Even New Construction. A thorough title search will help uncover title defects tied to you property. Subject to the terms of the policy, your title insurance can provide protection for you from title problems that may show up after you close. Listed below are 10 common title problems.
1. ERRORS IN PUBLIC RECORDS:
Human errors are common, but when it affects your ownership rights, these mistakes can be devastating. Clerical and/or filing errors can affect the deed or survey of your property. This can cause unwanted financial strain in order to be resolved.
2. UNKNOWN LIENS:
Previous owners of the property may not have paid off their debts. Even though this former debt is not yours, banks and other financing companies can place liens on your new property for unpaid debts even after you have closed on the sale. This is more common issue with distressed properties.
3. ILLEGAL DEEDS:
While the chain of title on your property may appear to be perfectly sound, it is possible that a prior deed was made by a person of unsound mind, or one who is reported their marital status incorrectly. These examples may affect the enforce-ability of previous deeds, affecting previous ownership. This can consequently affect your ownership rights.
4. MISSING HEIRS:
When someone dies, the owner rights to their home might be transferred to their heirs, or someone named in their will; however, the heirs are sometimes missing or unknown at the time of death. Many other times, family members contest the will for their own rights to the property. Scenarios like these can happen long after you purchase a property. They also may affect your rights to the property. Title insurance does a lot of work to make sure this doesn't happen.
Unfortunately, we don’t live in an honest world. Sometimes someone forges or fabricates documents that affect property ownership and they get filed in public records. This obscures the rightful ownership of the property. If a forgery has happened and comes to light, your rights to your home may be in jeopardy.
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6. UNDISCOVERED ENCUMBRANCES:
When it comes to owning real estate, threes a crowd. At the time of purchase, it's possible a third party holds a claim to all or part of the property. Due to former mortgages or liens, or non-financial claims, like Covenants, Conditions, and Restrictions (CC&R's) this can limit the use of your property. A third party claim can also jeopardize your right to ownership.
7. UNKNOWN EASEMENTS:
You might own your new home along with surrounding land, but an unknown easement may prohibit you from using it as you would like. An easement could allow businesses, government agencies, or other parties access to all or some portions of your property. These are usually non-financial issues, but easements can still affect your right to enjoy your property.
8. BOUNDARY | SURVEY DISPUTES:
You might have seen several surveys of your property during the purchasing process, however, other surveys may exist that show different boundary lines. This can cause a property line dispute, where a neighbor or other party may be able to claim ownership to a portion of your property.
9. UNDISCOVERED WILL:
Similar to problem #4 above, when a property owner dies, there ma be no apparent will or heirs at the time. The estate may sell his or her assets, including the home. When you purchase a home, especially through an estate sale, you assume your rights as owner; however, even years later, the previous owner’s will may be found and your rights to the property may be seriously jeopardized.
10. FALSE IMPERSONATION OF PREVIOUS OWNER:
Common and similar names, like John Smith, can make it possible to impersonate a property owner. If you purchase a home that was sold by a false owner in the past, you can risk losing your legal claim to the property.
The Adair Real Estate Team is a team of real estate agents in Coeur d'Alene ID, brokered by Coldwell Banker Schneidmiller Realty. We are full service Realtors for buying and selling real estate in Coeur d'Alene and all of North Idaho.
Jordan Adair | 208-449-1813 | Jordan@adairteam.com