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Title defects and what to do about them

While you hope that your real estate transaction goes smoothly, sometimes unexpected issues arise that can cause delays. In many cases, these are minor wrinkles that are easy to iron out. However, sometimes they are big problems that require litigation to resolve.

The title gives you ownership rights over a piece of property. Title defects are issues that prevent the transfer of property.

What are the different types of title defects?

According to RISMedia, sometimes a title defect is just a clerical error, such as the omission of a required signature. Sometimes there is an outstanding lien against the property or someone still owns an interest in it. If the property was someone’s inheritance, there may have been a problem closing the estate that raises issues. Sometimes there is a deliberate attempt to defraud you.

Inspection of legal documents sometimes reveals a title defect early in your real estate transaction, giving you more time to resolve it. However, some defects go undetected until closing, tripping you up at the last minute and delaying the process just as it is about to be over.

How do you resolve title defects?

The remedy for a title defect depends on the jurisdiction and the type of defect. A serious defect may require litigation to resolve. On the other hand, if the defect is a clerical error, the resolution may be as simple as correcting the error by recording a new document. If the defect is a lien, it may be possible for you to allocate escrow funds to satisfy it.

Whether you are a buyer or a seller, a title defect affects your ability to complete the transaction. Fortunately, while it is not always easy to resolve a title defect, it is usually possible.

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