One of the most important parts of any New York real estate transaction is ensuring that the property has a clear title. When the buyers and sellers fail to resolve a title issue before they close on the property, it can be difficult for the buyer to sell the property down the road. Title issues that remain unresolved can cause other undesirable outcomes, including expensive and stressful litigation. 

Conducting a thorough title search during the property purchasing process is incredibly important and helps prevent title issues from arising When a serious title issue becomes apparent, the buyer may opt out of purchasing the property, and the seller can take steps needed to make sure the title defect becomes cured. Below we have listed some of the most common title issues in New York. 

1) Encumbrances

Encumbrances happen when there are legal barriers placed on the title. The category of encumbrances is rather broad, and it includes deed restrictions, licenses, and encroachments. Essentially, any issue that prevents the property’s title from being classified as free and clear falls into an encumbrance category.

2) Easements

 Easements are one type of an encumbrance that result in a title not being considered free and clear. An easement is a legal right to use the property you do not own for a specific purpose. For example, if your neighbor’s house has access to a river, you might have an easement from your neighbor to walk through your neighbor’s property to access the river. The easement would be placed on your neighbor’s deed. If your neighbor wanted to sell the property, the easement would transfer with the new owner’s title. Discovering an unknown easement has caused many property deals not to go through in New York. Unknown easements create title issues for a property. In some cases, the seller may be able to negotiate and remove the easement. In other cases, the only option is to sell the property with the easement.

3) Disputes

Legal disputes regarding the title can hold up property sales. There are many different kinds of legal disputes that can arise, but some of the most common include boundary or survey disputes. These types of disputes happen when one survey shows one set of boundaries for the property in question, and another survey shows different boundaries. In boundary disputes, a neighbor or other third-party could be able to claim ownership of a portion of the property.

4) Missing Heirs

When the owner of a property passes away without any will in place, or heirs, New York state may sell his or her assets, including real property such as commercial property or his or her home. When you purchase a deceased person’s home through an estate sale, you assume that you own the title free and clear. Unfortunately, there have been cases in which years later, the deceased individual’s heir will come forward and make a legal claim for the property you purchased.

5) Impersonation

Scam artists have become savvier and savvier over the years, and in some cases, they will pretend to be a previous owner. It is possible for someone to impersonate a property owner. If a false property owner sells the property you purchase, you risk losing your legal right to the property. These situations are often devastating. One of the best ways to prevent this situation from happening is to purchase title insurance to protect your investment should any title issue arise. Hiring a real estate lawyer to assist you in the purchase can also help you avoid costly and ruinous title issues down the line.

6) Deeds

One of the most important aspects of title research is making sure that your property’s chain of title is legally sound. In some cases, the title search reveals that a previous deed was made by a minor, a person of unsound mind, or undocumented immigrants who did not have the right to sign the deed, making it legally unenforceable. These situations will affect the deed’s enforceability, possibly affecting your own ownership of the property.

7) Liens

Title searches can also reveal previously unknown liens on the property. Even though you did not take out the former mortgage on the property, banks or other financial companies may have the power to put a lien on your property for another person’s unpaid debts, even after you purchase the home or close the sale.

8) Forgery

Forged or fabricated legal documents can negatively affect property ownership. When a forgery or fraudulent document is involved, your right to own the property could be in question. Should any forgeries come to light during the title search, it is crucial to resolve them with your lawyer’s help or back out of the property sale.

9) Errors

In some cases, fraud or misrepresentation hasn not taken place, but regular negligence and errors occur. Human errors can cause a serious title problem. For example, if someone wrongly enters the address number or misspells a name, issues related to the title’s legal chain could arise. It often costs a lot of money to remedy these problems. 

10) An Undiscovered Will

As with an undiscovered heir, and undiscovered will can create major problems with property ownership. Years later, the deceased property owner’s last will and testament may come to light and may affect your property rights. For example, a loved one could discover the will in an old dresser and attempt to enforce her rights as a beneficiary. 

Contact Our Experienced Real Estate Lawyers

If you were purchasing a commercial or residential property, the title search process is incredibly important. Do not leave this critical step to title insurance companies when you can hire an experienced lawyer with the legal knowledge to discover and help you navigate any potential title issues. Contact Thomas Weiss & Associates today to schedule your initial consultation.