Understanding Title Defects: What They Are and Why They Matter in Real Estate
Frequently Asked Questions
What are common examples of title defects?
Common title defects include recording errors, incorrect or incomplete deeds, unresolved liens or judgments, undisclosed heirs, ownership disputes, fraudulent conveyances, forged signatures, missed mortgage releases, and tax issues.
When are title defects usually discovered?
Title defects usually come to light during due diligence, when a title company or attorney performs a title search before closing.
How can a title defect affect a buyer or seller?
A title defect can delay or derail a transaction. Sellers may face reduced marketability, delayed sales, or legal disputes, while buyers may face ownership challenges or financial liabilities. Lenders may also refuse to finance the transaction until the defect is resolved.
How are title defects resolved?
The solution depends on the source and severity of the defect. Some issues may be corrected by recording a corrected deed or filing a lien release, while disputed or unclear ownership may require a quiet title action to establish ownership rights and eliminate competing claims.
