5 Common Property Title Issues You May Run Into

Buying or selling a home can be an exciting and rewarding experience, but it can also come with some challenges. One of the most important aspects of any real estate transaction is the title, which is the legal document that proves who owns the property. A clear and valid title is essential for transferring ownership rights and avoiding future disputes. However, sometimes there may be problems with the title that can cause delays, costs, or even lawsuits. Here are five common property title issues you may run into and how to avoid or resolve them. 1. Existing liensA lien is a claim on the property by a creditor or other party who is owed money by the current or previous owner. For example, if the owner failed to pay their taxes, mortgage, utilities, or contractors, the lienholder may have the right to seize the property or demand payment before the title can be transferred. Liens can affect the value and marketability of the property, as well as the ability of the buyer to obtain financing. To avoid this issue, you should always conduct a title search before buying or selling a property. A title search is a process of checking the public records for any liens or other encumbrances on the property. A title search can be done by a lawyer, a title company, or a title insurance provider. If there are any liens on the property, they should be cleared by the seller before closing the deal. Alternatively, the buyer may negotiate with the seller to pay off the liens or reduce the purchase price accordingly. 2. Survey errorsA survey is a map or diagram that shows the legal boundaries and dimensions of the property, as well as the location of any structures, easements, or encroachments on it. A survey is important for verifying the accuracy and completeness of the title, as well as for planning any improvements or renovations on the property. However, sometimes a survey may be outdated, inaccurate, or missing, which can lead to disputes over the property lines, ownership rights, or zoning regulations. To avoid this issue, you should always obtain a current and accurate survey of the property before buying or selling it. A survey can be done by a licensed surveyor, who will measure the property and prepare a report and a drawing. A survey can take up to three months to be completed, so you should plan ahead and factor in the cost and time involved. Alternatively, you may opt for title insurance, which is a type of insurance that protects you from any losses or damages caused by defects or errors in the title, including survey issues. 3. Encroachment issuesAn encroachment is a situation where a part of the property or a structure on it extends beyond the legal boundaries and intrudes on another property or a public space. For example, a fence, a shed, a pool, or a driveway may encroach on a neighbor's land or a sidewalk. Encroachment issues can affect the value and usability of the property, as well as the relationship with the neighbors or the authorities. Encroachment issues can also result in legal action, such as a lawsuit, an injunction, or a forced removal of the encroaching element. To avoid this issue, you should always check the survey and the title of the property for any encroachments before buying or selling it. If there are any encroachments on the property, you should try to resolve them amicably with the affected parties, or seek legal advice if necessary. You may also consider title insurance, which may cover some of the costs or liabilities associated with encroachment issues. 4. Title fraudTitle fraud is a type of fraud that involves the illegal transfer of the title of a property without the knowledge or consent of the rightful owner. Title fraud can be done by using forged documents, stolen identities, or impersonation. Title fraud can cause serious financial and emotional harm to the victim, who may lose their property or face a mortgage debt that they did not incur. Title fraud can also affect the buyer, who may end up with a worthless title or a legal dispute with the true owner. To avoid this issue, you should always verify the identity and the authority of the seller before buying a property. You should also check the title history and the public records for any signs of fraud or irregularities. You should also protect your personal and financial information from identity theft, and report any suspicious activity to the authorities. Moreover, you should consider title insurance, which may protect you from any losses or damages caused by title fraud. 5. Legal use and zoning issuesLegal use and zoning issues are issues that relate to the permitted use and development of the property according to the municipal bylaws and regulations. For example, a property may be zoned for residential, commercial, industrial, or mixed use, and may have specific rules and restrictions on the type, size, height, or design of the buildings or structures on it. Legal use and zoning issues can affect the value and potential of the property, as well as the compliance with the law and the community standards. To avoid this issue, you should always research the legal use and zoning of the property before buying or selling it. You should check the municipal records or consult with the planning department for any information or guidance on the zoning bylaws and the permitted uses and developments on the property. You should also inspect the property and ensure that it conforms to the current zoning and use requirements. If you want to change the use or the zoning of the property, you may need to apply for a variance or a rezoning, which may involve a public hearing and a council approval. You may also consult with a lawyer or a title insurer for any advice or assistance on legal use and zoning issues.