Once you decide to make an offer on a piece of real estate, the next step is to have a title company or your attorney perform a title search. This process, which delves into the history of the property, uses public records and legal documentation to identify the current owner and uncover any issues that can impair its value or prevent you from taking clear title.
Below is a list of 4 complications that may show up in a title search, along with the best way to handle each one so the transaction can go forward.
A lien is an official claim against the property by someone other than the listed owner. This claim typically involves a collateral situation or debts that the owner has not paid. Examples include:
– A lien placed by the IRS for unpaid income taxes
– An unsatisfied mortgage, which is especially common with foreclosures
– A mechanic’s lien placed by professionals who have provided goods or services to build or enhance the home and not been paid.
If your title search uncovers a lien, it means that another party has a right to the property and the lien must be released before you can buy it.
- Easement Issues
An easement is a legal right of way. You may have paid for a home and the land it sits on, but an easement can restrict your ability to enjoy and utilize them. Some easements even allow businesses, government agencies, and other parties to access the property. For example:
– An adjacent landowner may be allowed to use your driveway to access their own property
– A utilities easement may give the city or county the right to access and perform work on your land
If you decide to buy a property subject to an easement that you find disruptive, your attorney can advise you on how to remove it or limit the way the easement holder exercises their right.
- Inheritance Complications
If the seller is someone who inherited the property, a title search could reveal the presence of other heirs who have not agreed to sell or even an undiscovered will leaving the home to heirs who remain unaware of their claim. Inheritance issues can present serious roadblocks to your ability to buy the property, so consult with your real estate attorney about the potential time and expense of untangling the problem before going forward or walking away.
- Boundary and survey problems
Although you may have reviewed several surveys of the property, a title search can uncover a survey with different and unexpected boundaries. If the document suggests that a neighbor or other landowner may be able to claim ownership of a portion of your land, you may be buying a future problem. Talk to your attorney before making an offer.
These title issues are frustrating for homebuyers and investors, but it is far better to discover them before buying a property rather than after. If you are considering a real estate purchase in New York or Florida, please contact Rosen Law LLC. Our real estate transaction attorneys have the skills and experience to conduct thorough title searches and allow you to buy with confidence. To schedule a consultation, please call (516) 437-3400.