Real Estate Title Issues

Mark thought he found and purchased his dream home in Long Island. After settling his family and belongings, he went about setting the home up just the way he and his wife wanted it to be. He was happy and relieved because the move-in process had gone smoothly, until…. he received a notice in the mail from the county. The new driveway he so admired when he moved in wasn’t properly permitted. Worse yet, the city had notified the previous owner months ago, levied fines, and placed a lien on the house. Now the county demanded that Mark remove the driveway. He immediately contacted the title insurance company. A contractor’s bid for removal and replacement of the
driveway was $15,000. The title company said the driveway didn’t concern them and refused to cover the expense.

Prevent Real Estate Title Issues with This Simple Step

This situation illustrates one of the many potential problems with the title during a real estate
transaction. When you purchase a property, you may be buying existing problems from previous
owners and lenders. Liens, forged documents, unknown wills – these are just a few of the problems
that arise at the last minute during a real estate transaction. The following title problems could keep
you from closing on your property:
• Unknown liens.
• Illegal deeds.
• Boundary disputes.
• Unknown owners or claimants to the property.
• Missing heirs.
• Incorrect government documents.
• Unrecorded deeds.
Title problems are a serious issue in real estate transactions. According to a study by the American
Land Title Association, close to 36% of all real estate transactions in the United States have a title
problem. The number one reason is undisclosed liens on the property, followed by problems with
releasing deeds and recording errors. While the seller is usually responsible for taking care of title
issues, you want the error resolved well before the closing date. Once a problem is discovered, it’s a
good idea to keep on top of it and ensure it’s resolved in your best interests.
About ten years ago, the United States was in the midst of a real estate boom, and thousands of
properties changed multiple hands during that time. Old deeds, levies, liens, and misfiled paperwork
pops up on title searches as you move closer to occupying your home. This is especially problematic if
you are purchasing a distressed property.
Real Estate Title IssuesIn another case that involved a problematic title, a man in Nevada died, leaving behind a piece of
residential property he bought with another adult son. The son was on the deed and sold the
property without telling the deceased man’s widow. She found out after the sale had closed and a
family had moved into the new property. The son had forged his stepmother’s signature on multiple
documents, and the title company had no idea the widow wasn’t aware of the pending sale. She was
out of her portion of the proceeds for the sale of the property. This created a nightmare for both the
widow and the family that now lived on the property.

Consult a qualified real estate attorney during the purchase process. An attorney double checks each
step of the business deal and oversees the title search. It’s absolutely necessary to complete a
thorough title search and resolve any discrepancies or errors by the date of closure.

Consider title insurance: you might be required to purchase it as part of the transaction. While this is
a good idea, and you might believe it’s a surefire way to prevent title problems, there are other issues
that may arise with the title insurance company. For instance, the title insurance company may
refuse to pay, citing the problem falls outside the scope of their insurance. This is when you need a
qualified real estate attorney by your side.
Mark hired a real estate attorney and was able to get the title insurance company to pay for a new and
properly permitted driveway. In the case of the Nevada widow who found out her stepson had sold
their property, a team of real estate attorneys were able to obtain her portion of the sales proceeds.
Consider other issues that occur, like unrecorded deeds or incorrect government documents. These
problems occur frequently and are best handled by a real estate attorney. A consultation with a real
estate attorney prior to closing a real estate transaction is a simple but practical step to protect your
assets..

What To Do Next:

Just As Every Property Is Unique,
Every Property Transaction Is Unique
– And Not Every Lawyer Has Experience Handling Them.
Using the legal process strategically is much more than just handling filings, it’s understanding how the
transaction fits into long term plans for the assets and the businesses that hold them.
Thomas Weiss & Associates, P.C. provides a Real Estate Strategy Session before every representation
to ensure every client understands how the legal process can make a big difference in their ultimate
financial outcome.
If I’m not the right attorney for your transaction, you have my commitment that I’ll point you in the
right direction. Just call my office at (516) 746-7452 to schedule