Understanding Title Defects

Over the next few months, we’ll be breaking down some of the most common title defects, providing insight into the types of issues that can arise and how these conditions may be resolved. Before we dive into our upcoming series, let’s take a moment to review the basics of title defects.

What are title defects?

Title defects are irregularities in the ownership history of a piece of real estate that may prevent the free, clear, and proper transfer or sale of a property to another party.

Why should I be concerned with title defects?

Title defects can interfere with your ability to take full and proper ownership of a property. If title defects are discovered after closing (also referred to as settlement), another party may have some ownership stake in your property.

What does “clouds on title” mean?

Clouds on title is another term referencing discrepancies associated with the chain of ownership on a given property.

How are title defects identified?

In most cases, title defects are identified through a title search. There are instances, however, when evidence of a title defect will arise after settlement has occurred.  

What is a title search?

A title search is a thorough investigation of the ownership history of a property. It is accomplished by reviewing legal documents recorded with the clerk of courts in the municipality in which the property is located.

Who conducts a title search?

Title searches are generally performed by a title agent or an attorney.

What happens when a title defect is found?

When a title defect is discovered during a title search, the title agent or attorney will take steps to have it resolved. The method of resolution, however, will vary according to the type of title defect that has been identified. While some title defects, like recording errors, are resolved by submitting corrective documentation, others may involve court proceedings and additional processes.

How can I protect my property against title defects?

Owner’s title insurance is a type of indemnity insurance policy that can help to protect home buyers against financial loss should another party successfully claim an ownership stake in their property. 

 For more on title defects, contact the team at Linear Title & Escrow today!

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