Your Guide to Common Issues, Red Flags, and How to Avoid Closing Delays
Potential homebuyers looking to enter or re-enter the housing market have a lot to look forward to, including an ideal place to call home, tax advantages, and the potential to build wealth through equity. However, before planning on a bright future in your new home, it’s essential to investigate its past.
As we discussed in our last blog article, a property’s past could include defects in the home’s title, such as liens and judgements. Now, we continue our series on “Title Troubles” by looking at additional problems that may be uncovered by your title company prior to closing.
Land and Boundary Disputes
Common issues we discover during a title search include boundary and survey problems, which can significantly impact a home’s title and lead to disputes with neighbors over property lines. If left unresolved, this can lead to costly legal battles over ownership rights. Such disputes can stem from:
- Encroachment issues– This happens when a property owner intentionally or unintentionally violates the property rights of his or her neighbor by building on or extending a structure to the neighbor’s land or property. Examples of encroachments include a neighbor’s fence installed over your property line or a garage built partially on your property or a neighbor’s property.
- Easement disputes – An easement is a written or verbal agreement between the owner of a piece of land and another entity, where the owner grants the entity rights or use of their property in one way or another. It’s easements that allow utility companies to bury pipes underground or electric companies to install equipment on private property.
The single best way to avoid encroachment and easement issues is to understand where your property starts and ends, so obtaining a professional land survey is instrumental. Buyers should obtain an accurate and up-to-date survey before closing to map out the land’s shape and boundaries and verify property lines.
Chain of Title Problems
Among the roles of the title company is to establish a “chain of title” for a property, which is a chronological record of all documents affecting ownership. A clear chain of title is necessary for a property to be sold or transferred, and title insurance should not be issued without it. Typically, a title search covers at least 30 years of history — so defects in the chain of title are sometimes revealed. These include:
- Missing heirs – When a property owner dies, the home’s ownership may be granted to their heirs or those named in their will. However, there are instances when the heirs are missing or unknown at the time of death. There are also cases where family members might contest the will for their own property rights.
- Undisclosed owners – Legal and financial complications can arise when a previous owner was never formally removed from the deed.
- Forged documents – Forged or fabricated documents, such as deeds or transfers, are sometimes filed within public records, concealing the rightful ownership of the property and putting your rights to the home in jeopardy.
Since defects in the chain of title can impede the closing process, Vanguard Title Company continually invests in new tools, processes, and education for our employees and clients to stay ahead of defects and fraud and ensure ownership rights. For instance, upon first contact with a potential seller, we use sophisticated technology to handle identity verification of the vested owner in the transaction.
Title Experts
The importance of relying on a proven title company to conduct a thorough title search cannot be overstated. Fortunately, Vanguard’s skilled staff has the expertise and experience to help resolve title defects and make sure your transaction is closed accurately and on time. Keep watching our blog for more information on “Title Troubles,” and be sure to reach out with any questions you may have.