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10 Common Legal Issues On Real Estate That Title Insurance Covers

April 26, 2024

Navigating property title issues is a crucial challenge in the ever-changing real estate industry that can obstruct the smooth closing process.

This post will discuss common property title issues in real estate transactions and explain why title insurance is required to ensure the smooth and secured transfer of home ownership.

The 10 Property Title Issues

The following are some examples of typical issues with property titles:

1. Public Records With Errors

Errors happen to everyone but can have disastrous consequences if they interfere with your homeownership rights. Errors in filing or clerical work could impact your property's deed or survey and make fixing them expensive.

2. The Unknown Liens

It's possible that the previous owners of your property weren't meticulous bill payers or bookkeepers. Even after the sale, you can still have liens on your property for outstanding obligations from banks or other financing organizations. This is problematic for distressed properties.

3. Illegal Deeds

While your property's chain of title may appear intact, an undocumented immigrant, minor, or married person may have done an earlier deed. These occurrences may alter earlier deed enforceability and ownership.

4. Missing Or Unknown Heirs

After someone passes away, their heirs or those specified in their will may inherit the house. Sometimes, those heirs are unknown or missing at death. Sometimes, family members argue the will for their property rights. These events may affect your property rights long after you bought it.

signing a documents

5. Fabricated Documents

Unfortunately, the world isn't honest. Public records may contain false or fabricated documents that obscure property ownership. You can lose your right to your house if these forgeries are discovered.

6. Unidentified Obstacles

When you bought your property, you might not be aware that there was a prior mortgage, lien, or other non-financial claim against all or part of it or that covenants or restrictions were limiting how you might use it.

7. The Unknown Easements

An unknown easement may prevent you from using your new property and its surrounding land or allowing government agencies, business organizations, or others to access it. Even while easements are usually non-financial, they might impair your property enjoyment.

8. Disputes Over Boundaries And Surveys

Before purchasing, you might have seen multiple surveys of your land, yet there might be further surveys with different borders. As a result, someone else or your neighbor might be able to claim ownership of a piece of your property.

9. The Unknown Will

When a property owner dies, the state can sell a home without a will. You acquire ownership rights to such a home when you buy it. Your rights to the property may be jeopardized years later if the deceased owner's will is revealed.

10. Using A False Identity To Pose As The Prior Owner

It is possible to fraudulently "impersonate" a property owner using common or similar names. If you buy a house from a fake owner, you can lose your legal title to it.

Why Title Insurance Is Required To Prevent Some Property Title Issues?

Your house may be new to you, but every property has a tale to tell about its past. A title search might uncover title defects associated with your property. Furthermore, your title insurance policy may offer protection against title issues identified after the transaction has been finalized, provided that the policy's provisions are met.

Take Note

These property title issues, including boundary disputes and concealed liens, highlight the need for solid security. This is why title insurance is required to emerge as an indispensable safeguard, offering comprehensive coverage against unforeseen defects or discrepancies in property titles. Purchase title insurance to protect your house investment.

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8315 W. 10th Street
Indianapolis IN 46234

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