When people look to purchase a home, their first concern is often about the physical state of the property: whether it needs repairs or maintenance, whether it has modern appliances or an up-to-date HVAC system, and so on. However, it is just as important to know if your property has a clear title, or if there is a title defect that might negatively impact your transaction. But what exactly is a title defect, and what happens if your property has one?
What is a Title Defect?
In simple terms, a title defect is a problem with a property’s legal status that brings into question the full property rights of its current owner. This is a problem because, in order for real estate to be legally sold, it must typically have “clear title,” meaning a title without defects. So long as any defects remain unresolved, the transaction cannot normally go forward.
What Kinds of Issues Are Considered Title Defects?
There are a wide variety of issues that may be considered title defects. These include, but are not limited to:
- Boundary disputes
- Disputed survey results
- Unpaid mortgages or liens
- Unpaid property taxes
- Erroneous or fraudulent paperwork
- Mistakes in public records
- Undisclosed easements or covenants
- Undisclosed heirs
What Happens if You Have a Title Defect?
What exactly happens when you discover your property has a title defect depends on when you discover it. Provided you uncover the defect prior to closing the sale, you can potentially take steps to cure the defect so the transaction can go forward, or cancel the transaction if curing it proves too difficult or costly. However, if you do not catch the defect until after closing, you could find yourself facing serious legal liability, which could cost you an enormous amount of time and money to resolve.
What Should You Do?
The best way to avoid a worst case scenario when it comes to title defects is to speak to a lawyer with experience handling real estate matters. They can advise you on your best course of action and help you fix any problems that arise. That way, you can enjoy the benefits of your real estate transaction without fear of undue litigation.
The New Jersey real estate lawyers at Riley and Gutman, LLC, are ready to assist you with your real estate transaction. We are committed to providing prompt, experienced and personal service to our clients, and will provide you with the legal support you need throughout your transaction and beyond. Give us a call at 731-431-0300, or visit our contact page for more information.