Real estate is the largest purchase most Delaware residents ever make. If you buy a retirement home, you may plan to leave it to family members as part of your estate. With significant funds tied up with the purchase, you want it to go as smoothly as possible.
A title defect, also called a cloud on title, can delay or prevent the purchase of tangible property. It describes anything that poses a threat to an owner’s right to sell. It can also cause problems for you after the fact, affecting your beneficiaries’ right to the property.
If the current homeowners owe money, a creditor may place a lien on the home. Owners cannot sell the property until they resolve the debt. Although claims are often uncovered before the sale, they may not become known until after the proceedings. You might lose the home due to a lien that belonged to someone else.
Occasionally, deeds signed by certain parties make them illegal. Examples include the following:
- An individual who says they are single but are actually married
- Someone of unsound mind
These issues can make a deed invalid and affect the chain of title.
It is not uncommon for a property to pass from one family member to another as part of an estate. However, sometimes an heir does not know a relative named them as a beneficiary to that asset. In some cases, a family member may contest the rights to a home or land. When the heir finds out about their inheritance, they might demand it back.
Additional title defects include errors in public records and deed forgeries. Researching the history of a property and understanding the ramifications of a cloud on title is critical. Ensuring it is clear can help you make your estate plan accordingly.