When purchasing or selling real estate, ensuring a “clear” title is essential. Title issues can delay or even derail a closing if not properly addressed. Common title problems can range from simple document errors to complex legal issues, like gaps in the chain of title or outstanding liens. At our company, we specialize in identifying and resolving these title issues efficiently to help buyers and sellers achieve a smooth closing.
Common Title Problems
1. Errors in Documentation: Errors are among the most common title problems encountered at closing. These can include incorrect legal descriptions, mistakes in names or property details, and improperly executed documents. Such mistakes can cause confusion over property boundaries, ownership rights, or responsibilities. Fortunately, most errors can be corrected by amending the document with the assistance of an attorney.
2. Gaps in the Chain of Title: Gaps in the chain of title occur when there are missing links in the historical record of ownership. For instance, a property may still list a deceased person as an owner or show an invalid transfer. These “clouds” on the title can prevent a new owner from obtaining a clear title. We address this by conducting a thorough title search and, when needed, initiating corrective legal actions to establish a complete and valid chain of title. For example, completing a succession to place a deceased persons heirs in possession of the property.
3. Outstanding Mortgages and Liens: One of the most pressing title issues at closing is the discovery of unresolved mortgages or liens. These can include unpaid property taxes, contractor liens, or other debts tied to the property. If not cleared, they transfer to the new owner, making it crucial to address them before closing. We help clear these title issues by securing lien releases to ensure a clean title transfer.
4. Encroachments and Easements: Encroachment and easement issues can cause uncertainty about property lines and usage rights. For example, a neighboring property might extend a fence or driveway onto the property in question. Title insurance often addresses encroachment and easement problems, but if discovered at closing, our team works to resolve these matters through boundary agreements or easement clarifications.
How Our Title Services Help
To protect against these and other potential title issues, our company provides clients with a range of title services, including title searches, title insurance policies, and closing protection letters. Here’s how these solutions work:
1. ALTA Owner’s Policy: The ALTA Owner’s Policy of Title Insurance is a comprehensive policy that protects buyers against a range of title risks, including those that may not be apparent during a title search. This policy covers issues like unknown heirs, forgery, fraud, errors in indexing and errors in tax records that could affect ownership.
2. Closing Protection Letters: A Closing Protection Letter (CPL) is issued by the title insurer to protect both the buyer and lender from potential errors or fraud in the closing process. This is particularly valuable in cases of commercial real estate transactions or when handling complex title transfers. An insured closing protection letter assures all parties that the title company will cover any financial losses resulting from errors or mishandling at closing.
3. Title Insurance for Liens and Encumbrances: Title insurance covers outstanding liens or undisclosed encumbrances that may come up after purchase. For instance, a title policy protects against any financial burdens from missed liens that surface later. Title insurance can also cover property title issues like boundary disputes or unrecorded easements, so buyers are not surprised by unknown claims if such coverage is requested.
5. Leasehold Policy of Title Insurance: For clients who are leasing commercial property, we also offer leasehold policies of title insurance. This specialized policy ensures that both the tenant and the landlord have defined rights and protections over the property, addressing potential lease-related title issues that could affect property usage or lease validity.
Resolving Title Problems for a Smooth Closing:
Our team specializes in addressing and assisting with clearing title issues to ensure a smooth and timely closing. From addressing simple documentation errors to clearing outstanding liens, we handle all title-related matters professionally and efficiently. By providing closing protection and ALTA closing protection letters, we safeguard our clients from unexpected title problems at closing, giving peace of mind throughout the process.
With a focus on early detection and resolution of title issues, we conduct rigorous title searches and provide tailored title insurance policies to address common title problems. By doing so, we help clients navigate even the most complex title issues when buying or selling a house. Let us handle the title process so you can focus on making your new property dreams a reality.