When you’re on the hunt for your dream property, the last thing on your mind might be: “What hidden defects could lurk in the title?” However, just like a plot twist in your favorite mystery novel, there are potential title defects that could turn your property purchase story on its head. Here are five types of title defects you might encounter:
Physical Defects
Ever dreamt of a sprawling backyard only to discover someone else might have a right to use a portion of it? This is where physical defects come in. An easement gives someone else the right to use a part of your property for a specific purpose, like a neighbor’s right of way or a utility company’s access. Furthermore, disputes or inaccuracies about where your property ends, and your neighbor’s begins – boundary lines – can lead to costly disputes. Ensuring clarity on these aspects is vital to enjoy your space without intrusion.
Judgments
Imagine purchasing a property and later finding out that the previous owner had a monetary judgment against them from a contractor. Now, the contractor is knocking on your door, expecting you to pay! Judgments can attach to a property and become the responsibility of the unsuspecting new owner. Before signing on the dotted line, make sure the title is free from any pending judgments.
Liens
Liens are claims that creditors have on a property to secure a debt. Common liens include tax liens, mechanic’s liens, or mortgage liens. If you purchase a property with a lien on it, you might find yourself in a situation where you’re liable for the unpaid debt. A thorough title search can help uncover any lurking liens before they become your problem.
Restrictive Covenant Violations
Restrictive covenants are rules or conditions imposed on a property by a developer or a homeowners’ association. These could range from the type of fence you can erect to the color of your home’s exterior. Buying a property that’s in violation of a restrictive covenant could mean you’re forced to make potentially expensive changes or face legal consequences.
Chain of Title Problems
A chain of title traces the historical sequence of all the owners of a property. Think of it as a property’s ancestry. If there’s a missing link, like a missing signature from an heir, it could spell trouble. Such inconsistencies can cast doubt on the legitimacy of your ownership. It’s essential to ensure that the chain of title is uninterrupted and without disputes.
Purchasing a property is one of the most significant investments you’ll make. While the allure of a cozy fireplace or a sunlit patio can be strong, it’s essential not to neglect the nitty-gritty. A clear title ensures that your dream property doesn’t come with unexpected surprises. By being aware of potential title defects and securing a comprehensive title search, you can ensure your story has a happy ending. Happy house hunting!
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