Common Title Issues and How to Avoid Them

When it comes to buying or selling a home, one of the most important aspects of the transaction
is ensuring the title is clear. The title to a property proves ownership, and a “clear title” means
that the property is free from any legal encumbrances that could affect the new owner’s rights.
However, there are common title issues that can arise during a real estate transaction, and
understanding these issues is critical to avoid delays, complications, or even the loss of a sale.
In this blog, we will explore the most common title issues and provide tips on how to avoid them
to ensure a smooth, successful real estate transaction.

1. Unpaid Liens
A lien is a legal claim on a property due to unpaid debts, typically from a previous owner. There
are several types of liens, including mortgage liens, tax liens, and mechanic’s liens (from
contractors who were not paid for work performed on the property). If liens are not cleared
before the closing of the sale, they will be passed onto the new owner, which can result in
financial headaches.

How to Avoid: Before closing on a property, the title company will conduct a title search to
uncover any unpaid liens. To avoid this issue, sellers should ensure that all debts related to the
property are paid off before listing the home. Buyers should work with a trusted title company to
ensure that any existing liens are resolved before the sale is finalized.

2. Ownership Disputes
Ownership disputes can arise if there are conflicting claims to the property’s title. This may
occur when multiple parties claim ownership of the same property, such as when a will is
contested or when one party believes they still hold ownership rights due to past agreements.
How to Avoid: Clear documentation of ownership and legal transactions is critical in preventing
ownership disputes. Before selling or purchasing a property, ensure that all ownership history is
clear and well-documented. Both buyers and sellers should work with a real estate attorney if
there is any uncertainty surrounding the ownership chain.

3. Errors in Public Records
Sometimes, mistakes can occur in public records, such as clerical errors in the names of
property owners, incorrect property descriptions, or a property boundary dispute. These errors
can delay the process of clearing title or even result in the transaction being halted.

How to Avoid: Title companies typically perform a title search to verify public records, but buyers
should double-check property descriptions and legal documents. If any errors are found, they
should be addressed immediately before proceeding with the closing process.

4. Undisclosed Heirs or Family Disputes
In some cases, a seller may not be the sole legal owner of a property. If someone passes away
without a valid will or if heirs are not disclosed, they may come forward during or after the sale,
claiming their right to the property.

How to Avoid: Sellers should ensure that all heirs are identified and that the estate is settled
before putting a property on the market. Buyers should insist on a full title search and work with
a qualified title company to identify any potential heirs or claims to the property.

5. Fraudulent Activity or Forged Documents
Fraudulent activity, such as forged signatures or false claims of ownership, can lead to serious
title issues. This can be particularly problematic for buyers who unknowingly purchase a
property with fraudulent title claims.

How to Avoid: Working with a reputable title company and conducting a thorough title search is
the best way to avoid this type of issue. Title insurance can also protect the buyer if fraud is
discovered after the transaction is complete. Always ensure that all documents are legitimate
and verified before signing.

6. Boundary Disputes
Boundary disputes happen when neighbors disagree about the location of property lines. This
can lead to complications in the title, particularly if there are encroachments (such as fences or
structures that cross property lines).

How to Avoid: To prevent boundary disputes, sellers should provide clear property surveys, and
buyers should request a survey before finalizing the sale. This will ensure that all parties
understand the exact boundaries of the property and prevent any misunderstandings.

7. Unpaid Property Taxes
One of the most common title issues that can arise is unpaid property taxes. If property taxes
are not paid, they can result in a tax lien, which could affect the sale of the property.

How to Avoid: Before listing a property for sale, sellers should make sure that all property taxes
are up to date. Buyers should work with a title company to verify that all taxes have been paid
and ensure that there are no outstanding tax liens.

8. Zoning Violations or Restrictions
Zoning violations occur when property use does not align with local zoning regulations. A buyer
may encounter issues if the property is not zoned for the intended use or if there are unresolved
zoning violations.

How to Avoid: Before purchasing property, buyers should confirm that the zoning requirements
align with their intended use of the property. Working with local authorities and a knowledgeable
real estate agent can help avoid surprises in this area.

How Hub City Title Can Help
At Hub City Title, we specialize in providing clients with a seamless title process. Our team
conducts thorough title searches to identify and resolve any potential issues before they
become a problem. We also offer title insurance to protect buyers and sellers from unexpected
title claims. By partnering with us, you can be confident that your real estate transaction will
move forward without unnecessary delays or complications.
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In Conclusion:
Title issues can seem daunting, but with careful preparation and the right team in place, most
problems can be avoided. By working with a trusted title company, such as Hub City Title, you
can ensure that your real estate transaction is smooth, secure, and free from unexpected
surprises. Don’t let title issues derail your dream of buying or selling a home—take the
necessary steps to protect yourself today.