Possible Residential Property Title Defects

Title defects to a residential property you plan to buy can block your transaction from going through. Such defects can consist of anything from delinquent taxes or liens against a previous owner to fraud of some kind.

 

Many commercial real estate transactions go through without a hitch – at least without issues from title defects. But title defects are a fact of life, and when they do occur, they can come in many forms. For a real estate transaction, whether residential or commercial, to close, the title search company has to report what is called a clean title. That means the title must have no encumbrances, or defects, that would hinder a seamless transfer to the new owner. Without a clean title, your mortgage lender won’t go through with the transaction. No loan, no purchase. But that’s where a North Charleston real estate attorney comes in. We can identify possible title defects and work to resolve the matter and preserve your transaction whenever possible.

 What Are Some Common Title Defects?

Title to a property conveys ownership of that property to the purchaser. However, that ownership might not be absolute. Title defects can create such a problem. Usually, the seller is responsible for clearing any defects in the title, and then title insurance protects your lender and you from undiscovered defects that might appear later. Such defects can take many forms, including:

 

  • Liens, including mechanic’s liens, liens for child or spousal support, or for other judgments on debts. If these are existing liens prior to closing, the seller is responsible, but has to pay them before you can close. If they arise later, you might have to pay them and pursue repayment from the seller. That’s why you buy title insurance.
  • Bankruptcies, which could place the home in the bankruptcy estate and complicate a sale.
  • Delinquent taxes.
  • Easements, which normally don’t require money to resolve, but depending upon the extent of the easement, it is possible it could interfere sufficiently with your use of the property to render it unlivable.
  • Boundary disputes or inaccurate public records, which should usually be addressed through a pre-closing survey of the property.

 

There are other, less common title defects that can crop up, as well. These include missing heirs, undiscovered wills, illegal deeds, forgeries, and even false impersonations of a previous owner. 

 

Each of these defects presents different challenges. Most of them are likely to evade detection during the initial title search because they are generally based on information not available at the time. They still can present a risk to your ownership of your property – or your ability to purchase it if they surface prior to closing – and make it worth your time to consult a real estate attorney.

Consult with Our North Charleston Real Estate Attorneys about Your Title

If you are preparing to enter a residential real estate purchase, you need to make sure your title is rock-solid, and have experienced advice if it isn’t. You should contact the attorneys of Weeks & Irvine. We know South Carolina real estate law and can help you successfully conclude your transaction.